Industrial Development Policies Based on Economic Complexity Under Plausible Scenarios: Case of Iran 2027

Abstract

Nowadays, developing the best policy mix to manage national industrial development is an open question. The inherent complexity and competitive circumstances increased the risk of failure and challenged the development of national programs, especially in the case of developing economies. To address such a complex world, this study proposes a novel scenario-based economic complexity analyzing methodology to overcome future uncertainties. The method contains two independent research lines. The first one evaluates and prioritizes industrial development by referring to the opportunity gain and product complexity indexes (a historical and current analysis). The other is to develop future scenarios through an expert-based process to uncover the most plausible futures (future-oriented evaluation for uncertainty behaviors). Then, results merged to increase a robust policy to guarantee development success and reduce failure risks. Iran has been selected as the case study since the country is facing a very uncertain future both from political and economic perspectives. Results revealed that the priority is to focus on the opportunity gain of products instead of product complexity since the country is facing international sanctions, limited investment capacities, and the potential of global challenges in the era of globalization, similar to the world faced during COVID-19 pandemics.