# Optimal diversification strategies in the networks of related products and of related research areas

## TL;DR

This paper develops algorithms to identify optimal diversification strategies in economic and research networks, revealing that targeted, time-specific focus on highly connected activities accelerates diversification, aligning with real-world country strategies.

## Contribution

The paper introduces novel algorithms for optimal diversification in networks, providing insights into timing and focus that improve upon existing strategies.

## Key findings

- Strategies targeting highly connected activities shorten diversification time.
- Countries' diversification strategies closely match the model's recommendations.
- Targeted, narrow time windows are effective for economic diversification.

## Abstract

Countries and cities are likely to enter economic activities that are related to those that are already present in them. Yet, while these path dependencies are universally acknowledged, we lack an understanding of the diversification strategies that can optimally balance the development of related and unrelated activities. Here, we develop algorithms to identify the activities that are optimal to target at each time step. We find that the strategies that minimize the total time needed to diversify an economy target highly connected activities during a narrow and specific time window. We compare the strategies suggested by our model with the strategies followed by countries in the diversification of their exports and research activities, finding that countries follow strategies that are close to the ones suggested by the model. These findings add to our understanding of economic diversification and also to our general understanding of diffusion in networks.