Building Regional Economic Resilience through AI Capability Orchestration

Abstract

Artificial intelligence (AI) is increasingly recognized as a strategic driver of digital transformation and regional development; however, existing scholarship provides fragmented explanations of how AI investments translate into resilient regional economic outcomes. This conceptual paper addresses this theoretical gap by developing a middle-range theory that explains the mechanisms linking AI capability, ecosystem coordination, inclusive digital transformation, and regional economic resilience. Drawing on Dynamic Capabilities Theory, Resource Orchestration Theory, ecosystem perspectives, digital transformation research, and regional resilience literature, the study adopts an integrative conceptual synthesis to identify the missing causal mechanism underlying AI-enabled regional adaptation. The paper proposes AI Capability Orchestration Theory, which conceptualizes AI capability as a regionally embedded strategic capability whose developmental value emerges through deliberate coordination among heterogeneous ecosystem actors. The proposed framework specifies four core constructs, a sequential capability-development mechanism, contextual boundary conditions, and six theoretical propositions explaining how orchestrated AI capabilities foster inclusive digital transformation and subsequently strengthen regional economic resilience. By integrating previously disconnected theoretical perspectives into a coherent explanatory framework, this study advances theory development at the intersection of strategic management and regional development while providing a rigorous foundation for future empirical validation and comparative research on AI-enabled regional transformation.