Growing is all about not being stuck in the middle of nowhere and all about being in the dense part of the forest. This is how I understood Ricardo Hausman's presentation today. In his words, capabilities are like monkeys that can jump from tree to tree, or from products to products, and that produce babies along the way. But it is only possible to jump to close trees, unless your monkeys are on steroids. Hence he has no choice but to suggest poor countries should make strategic development bets.
However, jumping from tree to tree is not about concentrating vertically and adding value to your product, its about spreading horizontally. He warns against the case of Chile, which would be in trouble if its salmon export markets collapsed. He gives the example of Nokia to explain how it came from the horizontal spreading of capabilities. Funny thing is that these are the two examples of Ha-Joon Chang. He must have read that book! He also gave the example of aspargus in Peru...he must have been reading False Economy...he also gave the example of MYC4...he must have been reading Rigotnomics...
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