Diversification through the Application of the Co-evolutionary Framework: Korea and Viet Nam (English)

This study compares Korea's successful diversification experience with Viet Nam's recent diversification path to identify how the latter country could further diversify into more value-added products. To this end, the authors first present the concept of a multiplex network in which product space and technology space are connected. Second, they present four types of diversification patterns, namely unrelated diversification, production-based diversification, technology-based diversification, and complex diversification. Third, the authors show how diversification patterns differ by the level of economic development. Fourth, they compare the diversification paths of Korea and Viet Nam using the co-evolutionary framework and suggest a viable diversification route for Viet Nam going forward. The report concludes with policy lessons that could inform policy makers in Viet Nam and other developing economies facing diversification hurdles. The target audience of this research includes policy makers and researchers interested in leveraging the relatedness analysis and applying the co-evolutionary framework in development studies.