#EURegionsWeek UNIVERSITY: The regional socio-economic impact of the 4th industrial revolution
The 4th Industrial Revolution has become a reality. Our everyday life experiences changes induced by new technological solutions, products and operations that interfere with our habits and traditional ways of behaviour. But this is only the tip of the iceberg of more profound structural changes that occur both in the market where the new 4.0 technologies are created, and in society in general, generated by the diffusion of such technologies and by their potentialities. As provocatively pointed out by Brynjlfsson and McAfee (2014), the roots of today’s challenges in our economy are not merely that a “Great Recession” or a “Great Stagnation”, but rather that we are in the early throes of a “Great Restructuring”.
The present technological transformation penetrates the structure of the markets in which these technologies are produced, imposing new competitive rules, new strategic elements on which innovation processes are based, new sources of profitability as well as new sources of threats. But it also encompasses profound changes in society, impossible to be even imagined in a futuristic picture, like a “near workless world”, a “completely automated factory”, an automation of non-routine activities like medical operations carried out remotely, all of which affect the quality and quantity of future jobs and our everyday life (Autor, 2019; Schawb, 2017).
This session has tackled some of these important opportunities and challenges and has highlighted that regions face both of them in reality. In 4.0 technologies’ markets, within a remarkable technological cumultativeness trend, opportunities exist for newcomer regions to emerge as new islands of creative destruction and innovation, especially for the creation of recombinatorial and application oriented inventions. In terms of adoption of 4.0 technologies, even if structural and sectoral conditions largely drive their adoption at regional level, there are also cases of regions with high adoption rates in absence of favourable sectoral specialisations as well as of regions with favourable sectoral specialisations but weak adoption rates. A possible explanation of this mismatch is that the adoption of 4.0 technologies requires functional links between the generic ICT sector and application of ICT in industries and services. But, with a few exceptions, European regions are lagging behind in this respect. In terms of labour markets, fears about the effects of technological progress on employment are generally misguided either by technological determinism or by pessimistic views. Employment effects are not general but industry and occupation specific. In particular, they tend to be positive for experts in IT firms but negative in IT firms not involved in 4.0 technologies as well for (low-qualified) helpers in other industries, leading to polarisation effects in labour markets.
Opportunities and threats arise for regions as the transformations and impacts of the 4th industrial revolution unfold.
Take away message
Opportunities do exist for newcomer regions to emerge as new islands of creative destruction and innovation in 4.0 technologies’ markets, despite a remarkable technological cumultativeness trend. Favourable sectoral specialisation conditions drive regional adoption trends of 4.0 technologies but there may be cases of regions achieving high adoption rates without favourable sectoral specialisations. Employment effects of 4.0 technologies adoption are not general but industry and occupation specific, leading to polarisation effects.
Roberta Capello, Camilla Lenzi: The geography of the production of 4.0 inventions is broad; the production of application-oriented inventions is spreading in space offering new technological opportunities to newcomer regions. Within a remarkable technological cumultativeness trend, opportunities exist for newcomer regions to merge as new islands of creative destruction and innovation.
Slavo Radosevic: The adoption of 4.0 technologies in regions is largely driven by their structural and sectoral conditions. Importantly, adoption of 4.0 technologies requires functional links between the generic ICT sector and application of ICT in industries and services. However, with few exceptions, European regions are lagging behind in that respect.
Uwe Blien: There are intensive fears about the effects of technological progress on employment. Employment effects are not general but industry and occupation specific, being positive for experts in IT firms but negative in IT firms not involved in 4.0 technologies as well for (low-qualified) helpers in other industries, creating polarisation effects.