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I understand that, and if the ECI is normalised by total economic output, it would make sense for it to be low in Australia for that reason. But if you subtrac
by doubleunplussed 6y ago
I understand that, and if the ECI is normalised by total economic output, it would make sense for it to be low in Australia for that reason.
But if you subtracted these industries from Australia, I would expect there to be more knowledge and technology industry remaining than in some of the countries with a higher ECI. So if ECI is not normalised by total economic output, I would be surprised.
Normalising by economic output makes it a bit of a misleading metric. Australia could have world-class knowledge and tech sectors (they don't, but they could), and yet ECI would be low just because some low-complexity sector was booming.
Not normalising at all is pretty fraught too though. I guess it has the potential to mislead in both cases.
- 0xfaded 6y agoGood point, I hadn't really considered the effect of normalizing by GDP.