The Impact of the 4th Industrial Revolution Outcomes on the Economic Role of the State Egypt as a Case Study (2013-2021)

Abstract

This paper explains the changes that occurred in the economic role of the state due to the 4 industrial revolution (4.0); Egypt as the case study. The paper examines two hypotheses. The first hypothesis assumes that while the state in Egypt is struggling with its economic role, the 4.0 poses challenges to that role. The second hypothesis assumes that formal institutions did not benefit from the 4.0 outcomes, which did not result in transforming its role and policies and in positively achieving economic growth. The paper adopts the new-institutionalism approach, that perceives a state that maximizes preferences of the individuals and various organizations. Part I provides an analysis of the theoretical claims of the economic role of the state. Part II discusses the impact of the 4.0 on re-shifting the focus from the state to the individual. Part III examines the process of matching state capabilities with its digital transformation policies to foster economic growth. The research results found that state institutions took ‘slow steps” to benefit from the opportunities of the revolution 4.0., which resulted in a limited impact on the economic growth. State institutions provided a small margin of freedom to allow individuals to perform economic activities, that could lead Egypt to achieve a knowledge-based economy.