Panama beyond the Canal: Using Technological Proximities to Identify Opportunities for Productive Diversification

Ricardo Hausmann, Jose Ramon Morales Arilla and Miguel Santos ()
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Jose Ramon Morales Arilla: Center for International Development at Harvard University

No 324, CID Working Papers from Center for International Development at Harvard University

Abstract: The economy of Panama has thrived for more than a decade, based on a modern service sector on the activities surrounding the Canal. Panama has inserted its economy into global value chains, providing competitive services in logistics, ship handling, financial intermediation, insurance, communication and trade. The expansion of the modern service sector required significant non-residential construction, including office buildings, commercial outlets, warehouses, and even shopping malls. Large public infrastructure projects such as the expansion of the Canal, the Metro, and Tocumen airport, have provided an additional drive and paved the road for productive diversification. But productive diversification does not spread randomly. A country diversifies towards activities that demand similar capacities than the ones already in place. Current capabilities and know-how can be recombined and redeployed into new, adjacent activities, of higher value added. This report identifies productive capabilities already in place in Panama, as signaled by the variety and ubiquity of products and services that is already able to manufacture and provide competitively. Once there, we move on to identifying opportunities for productive diversification based on technological proximity. As a result, we provide a roadmap for potential diversification opportunities both at the national and sub-national level.

Keywords: Economic Growth; International Economics; Panama (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-lam
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Citations: View citations in EconPapers (9)

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Working Paper: Panama beyond the Canal: Using Technological Proximities to Identify Opportunities for Productive Diversification (2016)
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