The elementary technology the “Internet” enabled the fourth industrial revolution. It changed the way people work. The collaboration in server-clouds and the so-called “Internet of Things” allows even machines to interact. Many questions are still unsolved, e.g. the key technologies or their impact on the economic growth of economics. Nowadays the transformation process is ongoing while the impact of this technological change is still unclear. The McKinsey consulting group estimates that just the internet accounts for 21 percent of the GDP growth in major economies over the past five years. Furthermore, researcher mention that the share of ICT capital is often underestimated. In real terms (evaluated in prices in 1995), the share of ICT was roughly twice as high, because of the continuously falling prices for ICT technologies and services. Fifteen years prior, the landscape internet-driven companies seemed to stop the growth path after the “Dotcom-Crash”. Before, the expectations of immense productivity gains were higher than the possibilities of the technology. Also, the average employee was not ready to handle the challenges of digitalization, robotic and the pace of technological change. In 2017 digitalization and automatization literature provides a wide range of IT-specific but also managerial-specific guidance. Available economic papers refering to industry 4.0 are comparatively few. And if available, then are more focused on the impact of ICT on economic growth. This paper tries to fill the gap to the point of a political-economic perspective on industry 4.0. The object of interest is particularly productivity changes caused through digitalization and automatization which can be summed in the main driving forces of industry 4.0. The initial point of the investigation is the theoretical framework of the Cobb-Douglas-Production-Function. It will be converted in an applied model form, which could be tested with the EU KLEMS database. To justify a claim of this kind, growth accounting estimates are used. The traditional neoclassical methodology determines a contribution to growth from an exogenous technological change in the Solow residual estimate of total factor productivity (TFP) growth.
Table of Contents
1 Introduction
1.1 Hypothesis testing
2 Current State of Research
2.1 Literature Overview
2.2 Taking Stock
3 Theory: Solow Growth Model
3.1 Applied Models: Cobb-Douglas-Production-Function
4 Empirical Investigation
4.1 Methodology correspondent to empirical investigation
4.2 Definitions
4.3 Case Studies of Industry 4.0
4.4 Data
4.5 Results
5 Policy Conclusion
5.1 Outline
5.2 Open Fields and Regulation
Research Objectives and Key Topics
The primary objective of this paper is to provide a political-economic perspective on the current development of Industry 4.0. By utilizing the Solow Growth Model and the Cobb-Douglas Production Function, the study aims to quantify the impact of digitalization and automation on economic growth, filling a research gap regarding the macroeconomic implications of these technological shifts.
- Theoretical framework of the Cobb-Douglas-Production-Function.
- Empirical investigation using the EU KLEMS database.
- Analysis of Industry 4.0 impacts on productivity growth.
- Comparison of growth patterns across major economies (USA, UK, Germany, France, Italy).
- Evaluation of policy implications and open research fields.
Excerpt from the Book
1 Introduction
The elementary technology the “Internet” enabled the fourth industrial revolution. It changed the way people work. The collaboration in server-clouds and the so-called “Internet of Things” allows even machines to interact. Figure 32 provides the historical development of the fourth industrial revolution initiating in the 1970’s. Many questions are still unsolved, e.g. the key technologies or their impact on the economic growth of economics.
Nowadays the transformation process is ongoing while the impact of this technological change is still unclear. The McKinsey consulting group estimates that just the internet accounts for 21 percent of the GDP growth in major economies over the past five years (Manyika & Roxburgh, 2011). Furthermore, researcher mention that the share of ICT capital is often underestimated. In real terms (evaluated in prices in 1995), the share of ICT was roughly twice as high, because of the continuously falling prices for ICT technologies and services (Schreyer & Colecchia, 2002) (Welfens, et al., 2012).
Fifteen years prior, the landscape internet-driven companies seemed to stop the growth path after the “Dotcom-Crash”. Before, the expectations of immense productivity gains were higher than the possibilities of the technology. Also, the average employee was not ready to handle the challenges of digitalization, robotic and the pace of technological change. In 2017 digitalization and automatization literature provides a wide range of IT-specific but also managerial-specific guidance. Available economic papers refering to industry 4.0 are comparatively few. And if available, then are more focused on the impact of ICT on economic growth.
Summary of Chapters
1 Introduction: Introduces the technological context of the fourth industrial revolution and outlines the paper's aim to evaluate Industry 4.0 through an economic lens.
2 Current State of Research: Reviews existing academic literature and research gaps, highlighting the ambiguity in current findings regarding Industry 4.0.
3 Theory: Solow Growth Model: Establishes the theoretical foundation using the Solow Growth Model and Cobb-Douglas production functions to analyze economic growth factors.
4 Empirical Investigation: Applies the theoretical models to the EU KLEMS database and presents case studies to measure the impact of Industry 4.0 on productivity.
5 Policy Conclusion: Summarizes the findings and discusses policy-relevant issues, including data requirements and digital regulation, while offering prospects for future research.
Keywords
Industry 4.0, Economic Growth, Digitalization, Automation, Solow Growth Model, Cobb-Douglas Production Function, ICT Capital, Macroeconomics, Productivity, EU KLEMS, Cyber-Physical Systems, Technological Change, Industrial Revolution, Data Analysis, Policy Regulation.
Frequently Asked Questions
What is the core focus of this research paper?
The paper examines the macroeconomic impact of Industry 4.0, specifically how digitalization and automation influence economic growth through an empirical economic perspective.
What are the central thematic areas?
The study centers on Industry 4.0 developments, ICT capital contribution, macroeconomic productivity analysis, and the historical evolution of industrial revolutions.
What is the primary goal of the investigation?
The goal is to bridge the gap in political-economic literature by quantifying how Industry 4.0-related capital affects output and labor productivity in major economies.
Which scientific methodology is employed?
The author uses a standard supply-side Cobb-Douglas production framework and growth accounting techniques, tested against the EU KLEMS database.
What topics are covered in the main body?
The main body covers the Solow Growth Model, methodology for empirical investigation, case studies on SMEs, and regression results for various nations.
Which keywords define this work?
Keywords include Industry 4.0, economic growth, Solow Growth Model, ICT capital, and total factor productivity.
How does the paper treat the "Solow Productivity Paradox"?
The paper discusses the paradox in the context of early computerization and argues that current statistical methods are now better equipped to account for technological impacts.
Why does the author focus on the EU KLEMS database?
The EU KLEMS database is selected for its high-quality, consistent data and recent updates, which allow for a robust empirical estimation of Industry 4.0 factors.
What role do the case studies play?
The case studies, such as those provided by MathWorks, serve to illustrate the practical applications of Industry 4.0 in SMEs and highlight potential cost-saving opportunities.
What is the author's outlook on future research?
The author suggests that future research should focus on extending databases, collecting more granular data for a wider range of countries, and constructing better control variables.
- Citation du texte
- Anton Nikitin (Auteur), 2018, Digital World Economy. An economic perspective on industry 4.0, Munich, GRIN Verlag, https://www.grin.com/document/443008
