Tag Archives: growth

Income inequality linked to export “complexity”

The mix of products that countries export is a good predictor of income distribution, study finds.

By Larry Hardesty


CAMBRIDGE, Mass. – In a series of papers over the past 10 years, MIT Professor César Hidalgo and his collaborators have argued that the complexity of a country’s exports — not just their diversity but the expertise and technological infrastructure required to produce them — is a better predictor of future economic growth than factors economists have historically focused on, such as capital and education.

Now, a new paper by Hidalgo and his colleagues, appearing in the journal World Development, argues that everything else being equal, the complexity of a country’s exports also correlates with its degree of economic equality: The more complex a country’s products, the greater equality it enjoys relative to similar-sized countries with similar-sized economies.

“When people talk about the role of policy in inequality, there is an implicit assumption that you can always reduce inequality using only redistributive policies,” says Hidalgo, the Asahi Broadcasting Corporation Associate Professor of Media Arts and Sciences at the MIT Media Lab. “What these new results are telling us is that the effectiveness of policy is limited because inequality lives within a range of values that are determined by your underlying industrial structure.

“So if you’re a country like Venezuela, no matter how much money Chavez or Maduro gives out, you’re not going to be able to reduce inequality, because, well, all the money is coming in from one industry, and the 30,000 people involved in that industry of course are going to have an advantage in the economy. While if you’re in a country like Germany or Switzerland, where the economy is very diversified, and there are many people who are generating money in many different industries, firms are going to be under much more pressure to be more inclusive and redistributive.”

Joining Hidalgo on the paper are first author Dominik Hartmann, who was a postdoc in Hidalgo’s group when the work was done and is now a research fellow at the Fraunhofer Center for International Management and Knowledge Economy in Leipzig, Germany; Cristian Jara-Figueroa and Manuel Aristarán, MIT graduate students in media arts and sciences; and Miguel Guevara, a professor of computer science at Playa Ancha University in Valparaíso, Chile, who earned his PhD at the MIT Media Lab.

Quantifying complexity

For Hidalgo and his colleagues, the complexity of a product is related to the breadth of knowledge required to produce it. The PhDs who operate a billion-dollar chip-fabrication facility are repositories of knowledge, and the facility of itself is the embodiment of knowledge. But complexity also factors in the infrastructure and institutions that facilitate the aggregation of knowledge, such as reliable transportation and communication systems, and a culture of trust that enables productive collaboration.

In the new study, rather than try to itemize and quantify all such factors — probably an impossible task — the researchers made a simplifying assumption: Complex products are rare products exported by countries with diverse export portfolios. For instance, both chromium ore and nonoptical microscopes are rare exports, but the Czech Republic, which is the second-leading exporter of nonoptical microscopes, has a more diverse export portfolio than South Africa, the leading exporter of chromium ore.

The researchers compared each country’s complexity measure to its Gini coefficient, the most widely used measure of income inequality. They also compared Gini coefficients to countries’ per-capita gross domestic products (GDPs) and to standard measures of institutional development and education.

Predictive power

According to the researchers’ analysis of economic data from 1996 to 2008, per-capita GDP predicts only 36 percent of the variation in Gini coefficients, but product complexity predicts 58 percent. Combining per-capita GDP, export complexity, education levels, and population predicts 69 percent of variation. However, whereas leaving out any of the other three factors lowers that figure to about 68 percent, leaving out complexity lowers it to 61 percent, indicating that the complexity measure captures something crucial that the other factors leave out.

Using trade data from 1963 to 2008, the researchers also showed that countries whose economic complexity increased, such as South Korea, saw reductions in income inequality, while countries whose economic complexity decreased, such as Norway, saw income inequality increase.

Source: MIT News Office

Click on the image to know more about Prime Consulting

Engineering new bone growth

Coated tissue scaffolds help the body grow new bone to repair injuries or congenital defects.

By Anne Trafton


CAMBRIDGE, MA — MIT chemical engineers have devised a new implantable tissue scaffold coated with bone growth factors that are released slowly over a few weeks. When applied to bone injuries or defects, this coated scaffold induces the body to rapidly form new bone that looks and behaves just like the original tissue.

This type of coated scaffold could offer a dramatic improvement over the current standard for treating bone injuries, which involves transplanting bone from another part of the patient’s body — a painful process that does not always supply enough bone. Patients with severe bone injuries, such as soldiers wounded in battle; people who suffer from congenital bone defects, such as craniomaxillofacial disorders; and patients in need of bone augmentation prior to insertion of dental implants could benefit from the new tissue scaffold, the researchers say.

“It’s been a truly challenging medical problem, and we have tried to provide one way to address that problem,” says Nisarg Shah, a recent PhD recipient and lead author of the paper, which appears in the Proceedings of the National Academy of Sciences this week.

Paula Hammond, the David H. Koch Professor in Engineering and a member of MIT’s Koch Institute for Integrative Cancer Research and Department of Chemical Engineering, is the paper’s senior author. Other authors are postdocs M. Nasim Hyder and Mohiuddin Quadir, graduate student Noémie-Manuelle Dorval Courchesne, Howard Seeherman of Restituo, Myron Nevins of the Harvard School of Dental Medicine, and Myron Spector of Brigham and Women’s Hospital.

Stimulating bone growth

Two of the most important bone growth factors are platelet-derived growth factor (PDGF) and bone morphogenetic protein 2 (BMP-2). As part of the natural wound-healing cascade, PDGF is one of the first factors released immediately following a bone injury, such as a fracture. After PDGF appears, other factors, including BMP-2, help to create the right environment for bone regeneration by recruiting cells that can produce bone and forming a supportive structure, including blood vessels.

Efforts to treat bone injury with these growth factors have been hindered by the inability to effectively deliver them in a controlled manner. When very large quantities of growth factors are delivered too quickly, they are rapidly cleared from the treatment site — so they have reduced impact on tissue repair, and can also induce unwanted side effects.

“You want the growth factor to be released very slowly and with nanogram or microgram quantities, not milligram quantities,” Hammond says. “You want to recruit these native adult stem cells we have in our bone marrow to go to the site of injury and then generate bone around the scaffold, and you want to generate a vascular system to go with it.”

This process takes time, so ideally the growth factors would be released slowly over several days or weeks. To achieve this, the MIT team created a very thin, porous scaffold sheet coated with layers of PDGF and BMP. Using a technique called layer-by-layer assembly, they first coated the sheet with about 40 layers of BMP-2; on top of that are another 40 layers of PDGF. This allowed PDGF to be released more quickly, along with a more sustained BMP-2 release, mimicking aspects of natural healing.

The scaffold sheet is about 0.1 millimeter thick; once the growth-factor coatings are applied, scaffolds can be cut from the sheet on demand, and in the appropriate size for implantation into a bone injury or defect.

Effective repair

The researchers tested the scaffold in rats with a skull defect large enough — 8 millimeters in diameter — that it could not heal on its own. After the scaffold was implanted, growth factors were released at different rates. PDGF, released during the first few days after implantation, helped initiate the wound-healing cascade and mobilize different precursor cells to the site of the wound. These cells are responsible for forming new tissue, including blood vessels, supportive vascular structures, and bone.

BMP, released more slowly, then induced some of these immature cells to become osteoblasts, which produce bone. When both growth factors were used together, these cells generated a layer of bone, as soon as two weeks after surgery, that was indistinguishable from natural bone in its appearance and mechanical properties, the researchers say.

“Using this combination allows us to not only have accelerated proliferation first, but also facilitates laying down some vascular tissue, which provides a route for both the stem cells and the precursor osteoblasts and other players to get in and do their jobs. You end up with a very uniform healed system,” Hammond says.

Another advantage of this approach is that the scaffold is biodegradable and breaks down inside the body within a few weeks. The scaffold material, a polymer called PLGA, is widely used in medical treatment and can be tuned to disintegrate at a specific rate so the researchers can design it to last only as long as needed.

Hammond’s team has filed a patent based on this work and now aims to begin testing the system in larger animals in hopes of eventually moving it into clinical trials.

This study was funded by the National Institutes of Health.

Source: MIT News Office