Commodity dependency is persistent, difficult to break out of it, and associated with lower productivity in the manufacturing sector. This paper discusses how technological change and innovation for economic diversification impact structural transformation in Commodity Dependent Countries (CDDCs). It uses measures of economic complexity as a proxy for the level of technological development to assess the status and evolution of technological development in CDDCs. It shows that they have made minimal gains in closing technological gaps in the past 25 years. The paper also discusses the impact of technological revolutions on developing countries and the opportunities and challenges that the technological waves of digitalization and Industry 4.0 pose for CDDCs. The paper proposes a strategy for technological transformation in CDDCs for economic diversification and structural transformation, focusing on the promotion of new products that have above-average complexity and building capacities for the deployment of the digital revolution and Industry.

60 p. ill., graphs, tables

Includes bibliographical references.