Viewing the economic Product Space as a network
The global economy can be thought of as a vast series of networks that represent the international exchange of goods and services between nations, organizations and other parties. The networks that make up the global economy are some of the largest, complex, and most precisely studied networks in the world. These networks are constantly being monitored because even a small change in the network structure could have major social, economic, and political impacts on a specific group or even an entire nation.
An example of one network that makes up the global economy is The Product Space. The Product Space is a network representation of the relatedness between products traded in the global market. The Product Space network consists of nodes connected by edges, much like we have seen in class. The nodes represent different market products, for example washing machines and the edges connect products that are related, for example there may be an edge between washing machines and televisions because they are both consumer household appliances. Additionally, the nodes have colors based on the industry which the product belongs to, for example agricultural, textile,etc., and relative sizes that represent the market value of the product.
The Observatory of Economic complexity website has an interactive visualization that lets you examine the Product Space of economic exports for different nations relative to the global Product Space. By analyzing the trends that appear in the Product Space networks of different nations, you can gain insight into the infrastructure, climate and natural resources that exist within these nations even if you were to know little about them.
Looking at the export Product Space network of Qatar, it is dominated by large nodes of oil and mineral products with very little other exports. From this information we can infer that the infrastructure of Qatar is predominantly based on the extraction of oils and metals. Looking at the export Product Space network of the United States, you would see that there is a large concentration of nodes representing machine products, chemical products and medical instruments but overall is very well rounded in terms of product categories compared to Qatar, which is almost exclusively oil and mineral products.
By having the Product Space in the form of a network, we are able to more easily visualize and analyze the trends that give us insight into important information about how certain products and their markets are related. It is also interesting to see how you can follow a path in the network to relate two very different items such as relating sauses/seasonings to electrical furnaces.
https://atlas.media.mit.edu/en/explore/network/hs/export/usa/all/show/2012/