Industry 4.0: The Fourth Industrial Revolution

¹ Kadyrov Chechen State University, Sheripova Street, 32, 364024, Grozny, Russia
² Federal State Autonomous Educational Institution of Higher Education Peoples’ Friendship University of Russia RUDN University, 6 Miklukho-Maklaya Street, Moscow, 117198, Russian Federation

^* Corresponding author: raya.bek@yandex.ru

Abstract

In the conditions of market volatility and a shortening of the life cycle of products, modern manufacturers are faced with the need to increase costs, accelerate and localize production processes. The answer to these challenges is offered by the fourth industrial revolution, or Industry 4.0 (I4.0). It consists in increasing the speed of bringing products to market through the transformation of the supply chain into highly adaptive integrated networks. The potential effect of I4.0 implementation on competitiveness (in particular, subsidiaries of foreign companies) and the nature of the modernization of global value chains, of which companies are a part, are considered on four specific examples. It is shown that in the I4.0 era, the competitive advantages of a business may depend both on the transformation of individual industries and on changes in relations between partners. These results are consistent with findings in the literature about the uncertainty and complexity of the digital economy in general, and confirm that there are problems with accurately assessing perceived benefits. I4.0 is based on the struggle for leadership, in which competitiveness is increased primarily by improving product quality, and not by reducing costs. At the same time, I4.0 contributes to the emergence of groups of closely interconnected, integrated with each other companies up to the erasure of clear boundaries between them.