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

CID Working Paper No. 324

HKS Working Paper No. RWP16-046

130 Pages Posted: 7 Dec 2016 Last revised: 2 Aug 2021

See all articles by Ricardo Hausmann

Ricardo Hausmann

Harvard University - Harvard Kennedy School (HKS)

Jose Morales-Arilla

Texas A&M University - Department of International Affairs; Tecnológico de Monterrey

Miguel Santos

Harvard University - Harvard Kennedy School (HKS)

Date Written: Marzo 2017

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.

Suggested Citation

Hausmann, Ricardo and Morales-Arilla, Jose and Santos, Miguel, Panama beyond the Canal: Using Technological Proximities to Identify Opportunities for Productive Diversification (Marzo 2017). CID Working Paper No. 324, HKS Working Paper No. RWP16-046, Available at SSRN: https://ssrn.com/abstract=2880643 or http://dx.doi.org/10.2139/ssrn.2880643

Ricardo Hausmann (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Mailbox 34
Cambridge, MA 02138
United States
617-496-3740 (Phone)
617-496-8753 (Fax)

HOME PAGE: http://www.hks.harvard.edu/about/faculty-staff-directory/ricardo-hausmann

Jose Morales-Arilla

Texas A&M University - Department of International Affairs ( email )

4220 TAMU
College Station, TX 77843-4220
United States

HOME PAGE: http://josemoralesarilla.com

Tecnológico de Monterrey

Calle del puente 222
Col Ejidos de Huipulco
Mexico City, Querétaro 76130
Mexico

Miguel Santos

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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