Development Theory: The Product Space
Professor Ricardo Hausmann
March 19, 2009 - Boston International members came together to learn about cutting-edge development research from Ricardo Hausmann, Director of Harvard’s Center for International Development and a Professor at Harvard Kennedy School. Professor Hausmann previously served as the first Chief Economist of the Inter-American Development Bank, the Minister of Planning of Venezuela, and Chair of the IMF-World Bank Development Committee.
Professor Hausmann discussed his “product space” theory, which argues that nations develop by moving from production of low-value goods to production of high-value goods. Some transitions are relatively easy (from making steel to making cars) but some are hard (from fishing to building software). Unless an exogenous event occurs (a targeted large-scale investment in business infrastructure), countries will behave like monkeys, jumping only small distances from branch to branch or tree to tree within the product space “jungle.” Professor Hausmann also discussed how he has applied this theory to developing countries across the globe, guiding their governments to focus on migrating to the highest-value production options available given their current positions and infrastructure.
We enjoyed having Professor Hausmann stay around for the cocktail reception following his presentation, giving members a chance to learn more about his research.
For more in-depth information on product space theory — including source data and country maps — visit The Product Space and The Wealth of Nations (hosted by the Center for Complex Network Research at the University of Notre Dame).
A big “thank you” to our marketing co-sponsors:
- Fletcher International Development Club
- HBS Globalization Club
- HBS International Business & Development Club
- HKS International Development Conference
About our Speaker
Ricardo Hausmann is Director of Harvard’s Center for International Development and Professor of the Practice of Economic Development at the Kennedy School of Government. Previously, he served as the first Chief Economist of the Inter-American Development Bank (1994-2000), where he created the Research Department. He has served as Minister of Planning of Venezuela (1992-1993) and as a member of the Board of the Central Bank of Venezuela. He also served as Chair of the IMF-World Bank Development Committee. He was Professor of Economics at the Instituto de Estudios Superiores de Administracion (IESA) (1985-1991) in Caracas, where he founded the Center for Public Policy. His research interests include issues of growth, macroeconomic stability, international finance, and the social dimensions of development. He holds a PhD in economics from Cornell University.
View Professor Hausmann’s detailed biography on the Harvard Kennedy School website.