Abstract: This article examines the critical relationship between organizational adaptability and regional economic diversification. While economic complexity research has predominantly focused on macro-level patterns, this analysis explores the organizational mechanisms that enable regions to develop new capabilities and expand into related industries. Drawing on evidence from economic geography, organizational science, and innovation studies, the article identifies how firms' internal capabilities—particularly knowledge absorption, network formation, and strategic flexibility—contribute to broader regional diversification. The analysis demonstrates that regional diversification trajectories are significantly shaped by organizations' capacity to recombine existing knowledge into novel applications. The paper presents evidence-based organizational strategies and governance mechanisms that foster adaptability, highlighting practical approaches for policymakers, business leaders, and regional development agencies seeking to enhance economic complexity and resilience against sectoral shocks. Learn more about your ad choices. Visit megaphone.fm/adchoices

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