Does value chain participation facilitate the adoption of Industry 4.0 technologies in developing countries?. (April 2022)

• Record Type: Journal Article
• Authors: Delera, Michele; Pietrobelli, Carlo; Calza, Elisa; Lavopa, Alejandro
• Is Part Of: World development. Volume 152(2022)
• Publication Date: 2022-04
• Subjects: GVCs -- Industry 4.0 -- Technology adoption -- Economic development -- Capabilities; Economic history -- 1990- -- Periodicals; Economic assistance -- Developing countries -- Periodicals; 330.9
• DOI: 10.1016/j.worlddev.2021.105788
• Languages: English
• ISSNs: 0305-750X

Abstract

Highlights: The diffusion of the advanced digital production technologies associated with Industry 4.0 remains limited among firms in developing economies. Firms' participation in GVCs is positively and significantly associated with the adoption of Industry 4.0 technologies. The adoption of Industry 4.0 technologies is associated with a labor productivity premium at the firm level. Abstract: The adoption of new technology is a key driver of firm performance and economic development. Yet the process of transferring and adopting new technologies is not seamless, particularly when the pace of technological change accelerates, and more advanced capabilities are required for the effective operation of new technology. In this paper we develop a framework for the analysis of the drivers of adoption of advanced digital production technologies associated with Industry 4.0 in developing economies. In particular, we ask whether firms' participation to global value chains (GVCs) can facilitate the adoption of Industry 4.0 technologies in manufacturing sectors. Using a novel UNIDO database on firms' adoption of different generations of production technology in Ghana, Viet Nam, and Thailand, we find that firms' participation to GVCs is positively associated with the adoption of Industry 4.0 technologies, and that adoption is positively associated with firm-level performance.