Global Value Chains, Industry 4.0 and Industrial Policy

The contemporary phase of internationalization is subordinated to the development of an innovative economy and the dispersion of the value added chain. The international production, trade and investments are nowadays organized in global value chains (GVC), where various stages of production are located in different countries. It should be noted, however, that the mere fact of the increased participation in GVC does not guarantee a long-term increase in benefits. It seems important to achieve a comparative advantage in certain industries which is nowadays determined by technological advancement of the particular country and industry. This paper aims to provide an assessment of how the widespread adoption of new digital technologies might affect the location and organization of activities within global value chains in many industries. Therefore the focus of policy is shifting from traditional industrial policy and sectors (manufacturing, agriculture or services) to productive capabilities policy, and then to the spread of these capabilities to other value chains.