This study examines the development of the productive structures of the EU using international trade data and methods from
complexity theory referred to as the "product space" approach. The results show that the set of products for which a country
has already a comparative advantage in international trade is a strong predictor for the type of products in which it will
develop a comparative advantage and obtain significant world market shares. This implies that the development of the productive
structures of a country is a highly cumulative process and any upgrading is necessarily deeply rooted in current capabilities
and industrial specialisation. Complementary factors and competencies have to be built up. This makes it more difficult for
countries to change their productive structures. In the light of the results of this study the smart specialisation strategy
which the European Commission pursues in its cohesion policy for the years 2014-2020 seems to be well placed to foster the
competitiveness of the European Union in general and the European regions in particular. Some caveats however apply.
Research group:Industrial, Innovation and International Economics