Intro

This document explores answers on how to think about development from now on, mostly focusing on theese questions:
1. How to diversify into activities that provide good jobs and are feasible to you now (short-term strategy)?
2. How to diversify into activities that are connected to other good jobs providers and are feasible to you (long-term strategy)?

For these and other questions that migth appear down the road, we’ll use our data about:
1. Good jobs BA (or sub BA) by city-industry.
2. Ratings on expected growth/vulnerabiliry.
3. Economic complexity statistics at the city-industry level.
4. Industries similarity matrices.

Short-term strategy

The big question here is How to diversify into activities that provide good jobs and are feasible to you now?.
Here we present two typical feasibility scatters that show the feasibility of industries against (1) ICI and (2) Share of good jobs.
The idea is to lead the economic developer a set of industries that are: Feasible, Have Good Jobs and are Complex (?). Typically, theese industries are those in the upper rigth quadrant.


“ICI vs Feasibility”

“Share of good jobs vs Feasibility”

Long-term strategy

The big question here is How to diversify into activities that drive me towards a more complex, high wages and good benefits economy?.
To answer, we present diferent versions of our Strategic Gain (SG) metric. SG is a representation of how much a location could benefit in terms future diversification opportunities by developing a particular industry (Hausmann. R., Hidalgo. C. et al. 2011). The classic version of the SG, values potential diversification oportunities derived from developing P by their ICI and their closeness to P, so it looks towards building a more complex economy. This time, we tweak the SG to value potential diversification oportunities by ICI times Average Share of good jobs or just Average Share of good jobs.


Adjusting strategicness

Next, we introduce the metrics mentioned above:
1. Strategic Gain [insert formula].
\[\begin{eqnarray} SG_{c,i} = \left[ \sum_{i'} \frac{\phi_{i,i'}}{\sum_{i''}\phi_{i'',i'}} (1-M_{c,i'})ICI_{i'} \right] \end{eqnarray}\] 2. Strategic Gain weigthed by Share of good jobs [insert formula].
\[\begin{eqnarray} GJPCISG_{c,i} = \left[ \sum_{i'} \frac{\phi_{i,i'}}{\sum_{i''}\phi_{i'',i'}} (1-M_{c,i'})(goodjobs_{i'})(ICI_{i'}) \right] \end{eqnarray}\] 3. Strategic Gain purely weigthed by Share of good jobs [insert formula].
\[\begin{eqnarray} GJSG_{c,i} = \left[ \sum_{i'} \frac{\phi_{i,i'}}{\sum_{i''}\phi_{i'',i'}} (1-M_{c,i'})(goodjobs_{i'}) \right] \end{eqnarray}\] 4. Suggestions? Maybe a variable that accounts for the expected performance given our ratings?



Long-term strategy charts

“Strategic Gain vs Feasibility”

“Strategic Gain weigthed by Share of Good jobs vs Feasibility”

“Good jobs Strategic Gain vs Feasibility”

References:

Hausmann, Ricardo, César Hidalgo, Sebastián Bustos, Michele Coscia, Alexander Simoes, and Muhammed Yildirim. 2014. The Atlas of Economic Complexity: Mapping Paths to Prosperity. MIT Press. https://doi.org/10.7551/mitpress/9647.001.0001.