The impact of industrial revolution 4.0 on international trade

Abstract

Objective: The objective of the article is to examine the impact of breakthrough innovations, which make up the Fourth Industrial Revolution (4IR), on the volume and structure of international trade. Research Design & Methods: The article is based on available literature and online sources. It is based on literature research, reports produced by a variety of research institutions, Internet sources, and desk research. Findings: The application of core innovations of the 4IR will lead to substantial changes to the volume and structure of international trade. There will be a considerable shift towards services, while in terms of products, the goods which will gain in importance owing to digitalization will include primarily those whose costs have so far been high in transport, logistics, information, regulation, and transaction. Implications & Recommendations: The implementation of 4IR’s devices will change trade conditions substan-tially. First-movers will benefit the most, in line with the rule ‘the winner takes it all.’ Developed countries will enjoy the best competitive chances, given their advantage in terms of capital and technology. However, with falling trading costs and declining requirements in the trade’s material infrastructure, small and medium-sized enterprises from developing countries will be able to increase their world trade share. Contribution & Value Added: The article offers a comprehensive assessment of the potential impact of Industry 4.0 devices on international trade while identifying their quantitative, structural, and comparative effects on countries and enterprises. It outlines the barriers to the changes projected and to the needs that these changes necessitate.