Exploring Comparative Advantages of National Industries

A public decision-maker seeking to stimulate innovation at national scale requires tools to identify comparative advantages that may serve as a foundation for targeted efforts, like subsidies. Building upon the Atlas of Economic Complexity of Hidalgo and Hausmann, our contribution relies instead on the Lantner model of economic dominance to design an alternative map of products, where substitutabilities are now heard in terms of resource allocations. Whereas the former emphasizes complementarities revealed by co-exportation, our framework highlights interactions in the production process catalyzed through circularities of trade. This approach makes it possible to visualize proximities not only from industrial co-location but from amplification in short circuits of mutual exchanges. The resulting “atlas of substitutability” provides decision-makers with a landscape of opportunities for restructuring and innovation, that is in a position to reveal comparative advantages within and beyond the Ricardian paradigm.