Who Profits from Industry 4.0? Theory and Evidence from the Automotive Industry

54 Pages Posted: 15 May 2019 Last revised: 31 Mar 2020

See all articles by Susan Helper

Susan Helper

Case Western Reserve University - Department of Economics

Raphael Martins

New York University (NYU) - Leonard N. Stern School of Business

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Date Written: January 31, 2019

Abstract

We develop a framework linking organizational and industry architectures to value creation and value capture, and apply it to the case of Industry 4.0 (the coordinated use of digitally-enabled technologies like robots, sensors, and artificial intelligence) in the automotive industry. We argue that if factory owners develop automation methods that capitalize on their greater access to the context in which production data is generated, they will be better able to prevent value from migrating to “digital entrants” that offer automation consulting and data analytics. Manufacturers can do this by adopting an organizational architecture that empowers shop-floor workers to combine their local knowledge with digital tools. Conversely, to the extent that digital entrants develop a more abstract version of these tools that they spread across industries, they will capture more value.

Keywords: automation, industry architecture, industry 4.0, value capture, value creation, value migration

JEL Classification: L21, L23, L62, O31, O33

Suggested Citation

Helper, Susan and Martins, Raphael and Seamans, Robert, Who Profits from Industry 4.0? Theory and Evidence from the Automotive Industry (January 31, 2019). NYU Stern School of Business, Available at SSRN: https://ssrn.com/abstract=3377771 or http://dx.doi.org/10.2139/ssrn.3377771

Susan Helper

Case Western Reserve University - Department of Economics ( email )

Cleveland, OH 44106
United States
216-368-5541 (Phone)
216-368-5542 (Fax)

Raphael Martins

New York University (NYU) - Leonard N. Stern School of Business ( email )

NY
United States

Robert Seamans (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

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