  Recent studies have found evidence of a negative association between economic
complexity and inequality at the country level. Moreover, evidence suggests
that sophisticated economies tend to outsource products that are less desirable
(e.g. in terms of wage and inequality effects), and instead focus on complex
products requiring networks of skilled labor and more inclusive institutions.
Yet the negative association between economic complexity and inequality on a
coarse scale could hide important dynamics at a fine-grained level. Complex
economic activities are difficult to develop and tend to concentrate spatially,
leading to 'winner-take-most' effects that spur regional inequality in
countries. Large, complex cities tend to attract both high- and low-skills
activities and workers, and are also associated with higher levels of
hierarchies, competition, and skill premiums. As a result, the association
between complexity and inequality reverses at regional scales; in other words,
more complex regions tend to be more unequal. Ideas from polarization theories,
institutional changes, and urban scaling literature can help to understand this
paradox, while new methods from economic complexity and relatedness can help
identify inclusive growth constraints and opportunities.
