The potential for productive diversification using skill-relatedness networks in Argentina

This paper presents an analysis of employment transitions based on private registered employment f lows in Argentina between 2014 and 2023, using the skill relatedness (SR) indicator (Neffke and Henning 2013; Neffke et al. 2017), which represents the proximity of skill requirements between productive sectors and is used to generate recommendations for productive diversification with an export orientation.

Using the SR indicator, a methodology based on complex network methods is presented through which indicator networks (SRN) are constructed to analyze the significant interactions between 415 sectors at four digits of the ISIC Rev 4 classifier of productive activities.

An integral analysis methodology is developed that facilitates the analysis of the stability of the intersectoral connectivity structures generated by the indicator, the interpretation of such disaggregated data through relevant groupings that persist over time and, finally, the recommendation of diversification of productive activities based on criteria of significance towards activities close in skill requirements according to the SR.

Finally, a simple comparison is made with diversification recommendations that emerge from the product complexity indicator (PCI) based on the product-space analysis (Hidalgo et al., 2007) carried out with international trade data. It is concluded that the recommendations based on the SR indicator provide valuable information regarding shared skills between activities in relation to the value chains in which they are inserted. On the other hand, a comparison of these recommendations for diversif ication of activities with those based on the PCI indicator reveals coincidence and complementarity, although the latter do not include services and other non-manufacturing activities.