Toward Better Growth Policies In A Modern Economy: The Comparison Of Three Complexity Indices

in modem economies transiting to innovation-driven systems, the evaluation of competitive advantages and growth potentials is increasingly measured using complexity. Two recent complexity measures-the Economic Complexity index (ECI) and the Fitness and Complexity index (FCI)-assume bipartite country-product network data. We provide the Modified Ecosystem Complexity Index (MECI) as a possible refinement to be considered in national economic growth policies. MECI is based on Lotka-Volterra equations, implying an ecosystem's approach to measuring complexity. We compare the three complexity measures using empirical data for 41 countries and shifting from the Revealed Comparative Advantage index to the Revealed Effectiveness Advantage index. The regression analysis shows that with respect to GDP per capita growth, the predictive power of the three measures improves when changing from RCA to REA index, while at the same time the difference among correlations of the three measures with initial diversity score and GDP per capita is reduced. MECI exceeds ECI and FCI with respect to growth prediction and correlation with GDP per capita Furthermore, MECI can be elaborated further by incorporating the technological complexity data as a third dimension.