Dario Diodato (p), Ricardo Hausmann, Ulrich Schetter

Francesco De Cunzo

We revisit the well-known fact that richer countries tend to produce a larger variety of goods and analyze economic development through (export) diversification. We show that countries are more likely to enter ‘nearby’ industries, i.e., industries that require fewer new occupations. To rationalize this finding, we develop a small open economy (SOE) model of economic development at the extensive industry margin. In our model, industries differ in their input requirements of non-tradeable occupations or tasks. The SOE grows if profit maximizing firms decide to enter new, more advanced industries, which requires training workers in all occupations that are new to the economy. As a consequence, the SOE is more likely to enter nearby industries in line with our motivating fact. We provide indirect evidence in support of our main mechanism and then discuss implications: We show that there may be multiple equilibria along the development path, with some equilibria leading on a pathway to prosperity while others resulting in an income trap, and discuss implications for industrial policy. We finally show that the rise of China has a non-monotonic effect on the growth prospects of other developing countries, and provide suggestive evidence for this theoretical prediction.

Lorenzo Napolitano (p), Nicolò Barbieri, Davide Consoli, François Perruchas, Angelica Sbardella

Dario Diodato

The goal of the paper is to elaborate an empirical overview of green technological development in European regions. This is a timely pursuit considering the ambitious commitments
stipulated in the recent European Green Deal to achieve climate neutrality by 2050. Our
analysis is organised in three steps. First, we map the geographical distribution of innovative activities in Europe and profile regions in terms of technological capabilities. Second, we elaborate a metric to identify regions’ green innovation potential. Third, we check
whether possessing a comparative advantage in specific, green and non-green, technological domains is associated with a region’s capacity to develop green technologies.

Francesco De Cunzo (p), Davide Consoli, François Perruchas, Angelica Sbardella

Lorenzo Napolitano

This paper provides a comprehensive descriptive empirical analysis of the presence of critical minerals (CM) in green technologies. Using a keyword analysis in patent descriptions, we assess the penetration of CM in climate change adaptation and mitigation technologies (CCMT). This allows us to address a number of research questions. First, which green technologies are most dependent on critical minerals, and how has dependence changed over time? Second, which countries rely more on CM via inventive activities in this domain? Further, using annual production data we compute a Herfindahl–Hirschman Index (HHI) for each CM to identify the degree of geographical concentration and, therefore, potential criticalities associated with the demand of CM (via green technology) whose global production is limited to few countries. Knowing where these criticalities are is a crucial step to detect potential bottlenecks, which may carry far reaching consequences in terms of the viability of environmental policies, as well as of social and geopolitical instability.