Value Migration and Industry 4.0: Theory and Field Evidence

Abstract

Our paper investigates how Industry 4.0–the coordinated use of robots, sensors, AI, and other digitally-enabled technologies in manufacturing–will affect which firms and occupations capture value in manufacturing. We develop our insights using in-depth interviews with manufacturers that are part of the automotive value chain, including parts suppliers and automakers, and with integrators who provide robotics and other advanced automation to manufacturers. Among other findings, we highlight that value migration within firms likely affects whether and how value migration occurs across firms.