Evolution of Industry 4.0 and Its Implications for International Business

Abstract

Industry 4.0 is the natural consequence of the techno-industrial development of the last decades. It has the huge potentiality to change the way globalization of manufacturing and consumption of goods and services that take place in the global markets. This chapter will focus on the evolution of Industry 4.0 and how this new technological framework will create values for firms and consumers, and how we can use it for a firm’s competitiveness and save them from the fallout of its development. An extensive literature review shows that the multi-faceted technology will hugely impact the global value chain, global supply chain, and new global division of labor (NGDL). It will reconfigure and re-distribute the business activities in the developing, emerging, and developed country markets and small and medium sizes firms and MNCs. The rapid development of technological and human capabilities can allow firms to reap benefits from this technology. At the same time, there are many challenges related to skill shortages, technological issues, business ethics, and values that need to be overcome to reap a profit from this new technological advancement.