Dimension: Resilient and sustainable nation
The Atlas of Economic Complexity’s Economic Complexity Index
Why does this matter
Over the past few years, the Australian economy has been subject to multiple international shocks which have impacted on our capacity to improve the living standards of Australians.
In a global economy, Australia cannot avoid the effects of these shocks, but boosting the diversity and adaptability of our economy improves our resilience.
More productive, dynamic, and competitive economies with strong institutions are better able to withstand and adapt to such shocks.
Governments can contribute to an economic environment that supports informed and well functioning markets that adjust to structural changes. Australia’s strong economic institutions and economic frameworks, for example its flexible exchange rate, independent monetary policy and responsible fiscal management, provide important buffers against future shocks.
While many of these factors are important for economic resilience, one metric that can be readily measured, is the extent to which a country has diversified sources of economic activity. Greater economic diversification can strengthen resilience to shocks and better enable countries to manage and take advantage of big structural shifts. The Economic Complexity Index (ECI) ranking, attempts to measure this, based on the diversity of exports a country produces and their abundance, or the number of other countries able to produce them.
Has there been progress
In 2020, Australia ranks as the 91st most complex country of the 133 countries considered in the ECI ranking. Compared to a decade prior, Australia's economy has become less complex, worsening 8 positions in the ECI ranking.