Why Industry 4.0 is not enhancing national and regional resiliency in the global automotive industry

Jeffrey Carey and Greig Mordue

International Journal of Automotive Technology and Management, 2022, vol. 22, issue 1, 52-81

Abstract: The post 2000 period has witnessed the rise of countries offering low-cost labour as important hubs for automotive manufacturing. As that occurred, automotive 'semi-periphery' countries faltered: struggling to retain vehicle production, unable to obtain mandates for more knowledge-intensive aspects of automotive value chains. For them, Industry 4.0 (I4.0) is considered an ideal tool to enhance competitiveness. That is because even though they have high labour costs and lack a homegrown automaker, they do have well-educated workforces. Here, we examine the technological upgrading strategies of manufacturers in a prototypical semi-periphery location: Ontario, Canada. We find that few firms there are making investments in I4.0-oriented technologies sufficient to upgrade their position within global production networks (GPNs). Consequently, notwithstanding the prominence of I4.0, our results indicate that I4.0 is unlikely to spur economic resilience in automotive semi-peripheries. Even so, targeted deployment of industrial policy measures may augment I4.0's applicability in those locations.

Keywords: Industry 4.0; automotive industry; global production networks; GPNs; automotive semi-periphery; industrial policy; resilience. (search for similar items in EconPapers)
Date: 2022
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