The Impact of Industry 4.0 on International Trade

Abstract

The authors examine the main elements that form the modern concept of “Industry 4.0” (the fourth industrial revolution) concerning their impact on international trade. The development of Industry 4.0 is largely based on the digital transformation of business, including international business, which has a positive impact on the development of international trade. The research shows that reducing the costs associated with obtaining information, searching for trading partners and contacting them, concluding, and registering transactions should have a serious impact on the volume of world trade. The emergence of new exporters and importers, for whom high costs previously represented a barrier to international trade, is predicted. It is possible that technological imbalances between developed and developing economies will grow due to rising R&D costs within Industry 4.0. Advanced technologies used in manufacturing and services will reduce the comparative advantages of developing countries with cheap labour. The comparative advantage of countries with well-developed trade infrastructure may be eroded due to the digitalization of cross-border fl ows (except for telecommunications and energy infrastructure). However, the digitalization of trade is expected to increase the relative importance of countries with strong institutions and good regulation. An overview of barriers aff ecting global digital trade is presented