  Economic growth is often associated with diversification of economic
activities. Making a product in a country is dependent on having, and
acquiring, the capabilities needed to make the product, making the process
path-dependent. We derive a probabilistic model to describe the directed
dynamic process of capability accumulation and product diversification of
countries. Using international trade data, the model enables us to empirically
identify the set of pre-existing products that enables a product to be exported
competitively. We refer to this set as the ecosystem of the product. We
construct a directed network of products, the Eco Space, where the edge weight
is an estimate of capability overlap. Analysis of this network enables us to
identify transition products and a core-periphery structure. Low and
middle-income countries move out of transition products and into the core of
the network over time. Finally, we show that the model is predictive of product
appearances.
