Export Quality & Upgrading

The capacity to climb the value ladder: moving the export basket toward more complex, higher-value and harder-to-imitate products, deliberately and continuously.
Economic Power / Trade & Investment / Export Capability & Sophistication

The capacity to climb the value ladder: moving the export basket toward more complex, higher-value and harder-to-imitate products, deliberately and continuously.

Indicators

  • High-tech export share
  • Knowledge-intensive export share
  • Export unit value growth
  • Export quality ladder position
Capability Developments

Major milestones and key developments of the capability

The Capability Development Index tracks the events that move a capability — operational use, technical breakthroughs, procurement decisions and the industrial base behind them — and places each on the record with the date it happened.

Recent developments cover the current period. Historical developments are the inflection points that produced Export Quality & Upgrading as it stands today.

GeopoliticalGovernanceTechnologyEconomy

Historical Developments

1337Edward III banned the export of raw English wool 689 years ago

The policy pushed weavers and merchants to build a domestic cloth-making industry, and English exports shifted over the following two centuries from raw wool to finished and dyed cloth, one of the earliest recorded cases of deliberate export upgrading.

1651England passed the Navigation Acts to control colonial trade 375 years ago

Requiring goods to move on English ships and through English ports pushed processing, shipping and re-export earnings toward the home economy rather than foreign carriers, an early instance of a state capturing value-added activity through trade law.

1868Japan began the Meiji industrial modernisation drive 158 years ago

The new government imported foreign technology and expertise wholesale, built state-owned model factories and shipyards, and deliberately shifted the country's exports from raw silk and tea toward manufactured textiles, ships and machinery within a generation.

1935Kaname Akamatsu outlined the flying geese pattern of industrial development 91 years ago

The model described how manufacturing capacity and export sophistication migrate in sequence from a lead economy to followers, a pattern later used to explain Japan, then Korea and Taiwan, then China and Vietnam climbing the same ladder.

1949Raul Prebisch set out the terms-of-trade thesis for commodity exporters 77 years ago

His work for the United Nations Economic Commission for Latin America argued that countries exporting raw materials faced structurally worsening terms of trade against manufactured goods, giving intellectual grounding to decades of import-substitution and export-upgrading policy.

1973South Korea launched its Heavy and Chemical Industry Drive 53 years ago

State-directed credit and investment shifted the economy from light manufacturing such as textiles and wigs toward steel, shipbuilding, machinery and petrochemicals, laying the industrial base for the country's later move into electronics and automobiles.

1980Taiwan opened the Hsinchu Science-based Industrial Park 46 years ago

Tax breaks and proximity to research institutes drew electronics and semiconductor firms into a single cluster, giving Taiwan a template for moving from low-cost manufacturing into higher-value, technology-intensive production and exports.

1993The World Bank published The East Asian Miracle report 33 years ago

The study distilled how Japan, South Korea, Taiwan, Singapore and Hong Kong had deliberately climbed from light manufacturing to capital and technology-intensive exports, shaping development orthodoxy on state-guided industrial upgrading for a generation of policymakers.

2007Ricardo Hausmann and Cesar Hidalgo introduced the product space model of economic complexity 19 years ago

Their research mapped which products countries could feasibly move into based on existing capabilities, giving policymakers and economists a rigorous way to measure and predict export basket upgrading rather than relying on case studies alone.

2009Hidalgo and Hausmann published the original formulation of the Economic Complexity Index in PNAS 17 years ago

The first formulation of the Economic Complexity Index appeared in the Proceedings of the National Academy of Sciences. It measured the productive capabilities of economies by treating the knowledge available in a location as the average knowledge of the activities present there, with a product-side counterpart in the Product Complexity Index. This gave analysts a quantitative basis for judging whether a country's export basket was upgrading toward more complex goods.

2015China launched the Made in China 2025 strategy 11 years ago

The programme set targets for shifting the country's manufacturing and export base from low-cost assembly toward advanced sectors including robotics, aerospace, semiconductors and electric vehicles, formalising an explicit state strategy for climbing the value chain.

Recent Developments

January 2026Bangladesh pressed export diversification beyond ready-made garments 7 months ago

A government seminar backed by the World Bank-funded Export Competitiveness for Jobs project set out support for leather, footwear, light engineering and plastics, part of a drive toward a $100 billion export target by 2030 and away from over-reliance on the garment sector.

Early 2026Morocco's aerospace sector graduated from subcontracting to high-value manufacturing 6 months ago

Exports rose 12.6% to nearly $871 million in the first quarter as 155 companies clustered around the Midparc zone near Casablanca shifted into complex components, engineering services and electronics, generating $3 billion in annual revenue and employing 27,000 people.

2026Vietnam and China were projected to lead global growth on export complexity this year

Harvard's Growth Lab found both economies more complex than their income level would predict, driven by sophisticated and diversified manufacturing, and forecast them to post the fastest per capita growth of any nations over the coming decade.

2026Indonesia ratified new trade pacts to diversify export markets this year

Agreements with the European Union, Peru and Canada came alongside a push into Central Asia and Africa, part of an effort to broaden destinations beyond traditional partners as the country's total exports rose to $282.91 billion in 2025 from $266.52 billion in 2024.

2026 to dateChile tied new lithium contracts to local processing requirements this year

Lithium exports reached $2.137 billion between January and April 2026, roughly triple the year-earlier value, as new state lithium contracts mandated domestic refining and technology transfer, with cathode material production targeted to eventually earn far more than raw lithium carbonate exports alone.

2026Morocco pushed its automotive industry from assembly toward higher-value work this year

Policy signals in May 2026 pointed toward process design, local engineering and electrification capabilities, with capacity plans targeting 1.5 million vehicles a year and 80% local integration, backed by a new LFP cathode plant built with South Korean and Chinese partners.

Automotive exports reached $4.57 billion
2026Vietnam moved up the semiconductor value chain into advanced packaging this year

FPT opened an advanced testing and packaging plant in Bac Ninh province and Amkor committed more than $1.6 billion to a nearby facility expected to produce 3.6 billion packaged units a year, extending the country's reach across all six stages of the chip value chain.

Hana Micron invested about $930 million in Vietnamese chip packaging
2025Smartphones became India's top export product by value last year

Shipments worth around Rs 2.62 lakh crore were led by Apple's iPhone suppliers, including Foxconn, Tata Electronics and Pegatron, as domestic value addition in electronics manufacturing climbed to around 20%, up sharply since the production-linked incentive scheme began in 2020.

India approved a new Rs 62,500 crore mobile manufacturing scheme
2025Saudi Arabia pushed non-oil exports to $82 billion last year

The non-oil economy reached 55% of GDP, up from 45% in 2016, as Vision 2030 entered its final phase with 93% of key performance indicators fully or partially met, even though non-oil exports still trailed the programme's own target as a share of non-oil output.

2025Indonesia multiplied processed nickel export value 26-fold since 2014 last year

A ban on raw ore exports pushed the export mix from 18% processed materials before 2014 to 99.9% by 2025, with processed nickel exports rising from $1.5 billion to $38.5 billion and giving Indonesia roughly 47% of the global market.

The Philippines agreed to expand nickel ore shipments to Indonesia
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