  Economies grow by upgrading the type of products they produce and export. The
technology, capital, institutions and skills needed to make such new products
are more easily adapted from some products than others. We study the network of
relatedness between products, or product space, finding that most upscale
products are located in a densely connected core while lower income products
occupy a less connected periphery. We show that countries tend to move to goods
close to those they are currently specialized in, allowing nations located in
more connected parts of the product space to upgrade their exports basket more
quickly. Most countries can reach the core only if they jump over empirically
infrequent distances in the product space. This may help explain why poor
countries have trouble developing more competitive exports, failing to converge
to the income levels of rich countries.
