State-Led Economic Diversification

Economic diversification denotes a shift from a dependence on traditional sectors, such as agriculture and extractives (oil and mining), toward a broader array of sectors and high-quality services. Diversification is intimately related to the process of structural transformation, that is, the dynamic shift of resources from less productive to more productive sectors, including knowledge-based industries. This process, which involves both capitalizing on a country’s current comparative advantage and building the capabilities required to create new comparative advantages, is essential to economic development.

Source: https://www.elibrary.imf.org/view/journals/087/2024/006/article-A001-en.xml#:~:text=They%20must%20preserve%20domestic%20macroeconomic,help%20of%20country%20case%20studies.