A Public Lecture by Prof Ricardo Hausmann: Accessing Know-how for Development

Delivered on 16 May 2018 as part of the joint Echelon–Advocata lecture series, this talk brought Prof. Ricardo Hausmann of Harvard University’s Center for International Development to address a specific, practical puzzle at the heart of Sri Lanka’s growth challenge: how does an economy diversify into new, more sophisticated products and services when the underlying know-how doesn’t yet exist domestically? Hausmann’s core argument was that economies grow not by producing more of what they already make, but by adding genuinely new products to their portfolio — and that the critical constraint on this diversification is access to know-how, which is often far easier to move by relocating people than by transmitting knowledge on its own. Drawing on the experience of Singapore, India, and Vietnam, he identified three channels through which countries successfully import this know-how: foreign direct investment, immigration, and diaspora networks. The main highlight was Hausmann’s direct application of this framework to Sri Lanka’s limited export diversification, using it as a lens to argue that the country’s restrictive approach to immigration and foreign talent — rather than any lack of ambition or capital — was itself a binding constraint on the sophistication of what Sri Lanka could realistically hope to produce and export. The lecture closed with an extended Q&A moderated by Advocata Chairman Murtaza Jafferjee.