Abstract
The beginning of the fourth industrial revolution was marked with inconsistency between the anatomy of a rapidly changing environment and the way of its functioning. Combinatorial innovations connecting technologies, businesses, industries, and people have pushed the new economy, sometimes called Industry 4.0, into great discontinuity. Double amalgams based on synthesis of innovations from virtual and physical (and/or biological) world as well as products and services have disruptive impact on incumbents. Paradoxically, a quantum leap in technological opportunities is not matched with increase of macroeconomic performance. The reason for that is a legacy of combined crisis (the Great Recession 2008 plus digital disruption) emerged in the period before the start of the fourth industrial revolution. Advance manufacturing is a primer of negative impact of combinatorial innovations on incumbents. Advanced manufacturing is a direct consequence of universal mobility as a new free good and their impact on the value chain. This fact is important because production based on advanced manufacturing is the place where the fourth industrial revolution is happening before spreading out on other stages of the value chain, both downstream and upstream and throughout the whole economy and society as well. We cannot expect greater impact of combinatorial innovations on economic growth within existing economic framework. To achieve managed change, or smooth transition toward the Industry 4.0, the economic system needs new rules. Equally, the new economic model of growth and economic policy platform (macroeconomics) as well as strategy and business model of industry leaders (microeconomics) are being reshaped in accordance with new economic rules. In writing this article, we have been guided by two intentions. First, to map the direction of change as it happens. Second, to provide from a microeconomics (or business economics) perspective a fresh and far reaching insight into new economic rules for macro and micro management, desirable for winning smooth and well managed transition to Industry 4.0.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
“Industrie 4.0”, Deutscher Industrie - und Handelskammertag.
- 2.
“Fortune of sluggish growth, but social ruin is rapid” (Lucius Annaeus Seneca).
References
Alcott, B.: Jevons’ paradox. Ecol. Econ. 54(1), 9–21 (2005)
Chesbrough, H.W.: Open Innovation: The New Imperative for Creating and Profiting from Technology. Harvard Business Press, Boston (2006)
Christensen, C.: The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business Review Press, Boston (2013)
Costanza, R., Daly, L., Fioramonti, L., Giovannini, E., Kubiszewski, I., Mortensen, L.F., Pickett, K.E., Ragnarsdottir, K.V., De Vogli, R., Wilkinson, R.: Modelling and measuring sustainable wellbeing in connection with the UN sustainable development goals. Ecol. Econ. 130, 350–355 (2016)
Daly, H.: Economics in a full world. Great Transition Initiative (2015)
Daly, H.E.: Economics in a full world. Sci. Am. 293(3), 100–107 (2005)
Đuričin, D., Vuksanović Herceg, I.: Industry 4.0 and paradigm change in economics and business management. In: Jun, N., Majstorovic, V.D., Djurdjanovic, D. (eds.) Proceedings of the 3rd International Conference on the Industry 4.0 Model for Advanced Manufacturing, pp. 37–56. Springer, Berlin (2018). https://doi.org/10.1007/978-3-319-89563-5
Farina, A., Johnson, A.R., Turner, S.J., Belgrano, A.: ‘Full’ world versus ‘empty’ world paradigm at the time of globalization. Ecol. Econ. 45(1), 11–18 (2003)
Lin, J.Y., Monga, C.: Growth identification and facilitation: the role of the state in the dynamics of structural change (Policy Research Working Paper No. 5313). The World Bank, Washington, DC (2010)
Porter, M.E., Millar, V.E.: How information gives you competitive advantage. Harvard Business Review, July–August 1985
Rodrik, D.: Industrial policy: don’t ask why, ask how. Middle East Dev. J. 1(1), 1–29 (2009)
Schwab, K.: The Fourth Industrial Revolution. Crown Business, New York (2017)
Stiglitz, J., Lin, J.Y. (eds.): The Industrial Policy Revolution I: The Role of Government Beyond Ideology. Palgrave Macmillan, New York (2013)
The UN Sustainable Development Goals. UN, New York (2015)
The World Bank National Account Data. https://data.worldbank.org
World Investment Report, p. iii. https://unctad.org/en/pages/DIAE/World%20Investment%20Report/WIR-Series.aspx
Wuethrich, B.: Learning the world’s languages–before they vanish. Science 288(5469), 1156–1159 (2000)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Nature Switzerland AG
About this paper
Cite this paper
Đuričin, D., Vuksanović Herceg, I. (2019). Illuminating an Economy of the Future: How to Win the Transition to Industry 4.0 with New Economic Rules. In: Monostori, L., Majstorovic, V.D., Hu, S.J., Djurdjanovic, D. (eds) Proceedings of the 4th International Conference on the Industry 4.0 Model for Advanced Manufacturing. AMP 2019. Lecture Notes in Mechanical Engineering. Springer, Cham. https://doi.org/10.1007/978-3-030-18180-2_8
Download citation
DOI: https://doi.org/10.1007/978-3-030-18180-2_8
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-18179-6
Online ISBN: 978-3-030-18180-2
eBook Packages: EngineeringEngineering (R0)