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Digitalisation, automation and upgrading in global value chains - factory economy actors versus lead companies

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  • Andrea Szalavetz

Abstract

This article investigates the differences in the application and impact of digital technologies between manufacturing subsidiaries and lead companies, the principal orchestrators of global automotive value chains. Utilising a dataset of 10 in-depth interviews with automotive industry actors, we analyse headquarters–subsidiary differences in the patterns of digitalisation-driven upgrading. A theoretical framework is offered that explains why the significant upgrading achievements of manufacturing subsidiaries deploying industry 4.0 technologies will not reduce the gap between lead companies and manufacturing subsidiaries in terms of value generation. We show that the concept of ‘industry 4.0’ is much narrower than that of ‘digitalisation’ and transition to smart factories is only part of the digital transformation story. Industry 4.0 technologies contribute to the upgrading of operations, and enable subsidiaries to take on production-related knowledge-intensive assignments (functional upgrading). Conversely, digitalisation serves lead companies’ strategic differentiation efforts, and facilitates achieving competitive advantage: the latter are crucial for value capture.

Suggested Citation

  • Andrea Szalavetz, 2019. "Digitalisation, automation and upgrading in global value chains - factory economy actors versus lead companies," Post-Communist Economies, Taylor & Francis Journals, vol. 31(5), pages 646-670, September.
    • Handle: RePEc:taf:pocoec:v:31:y:2019:i:5:p:646-670
    DOI: 10.1080/14631377.2019.1578584
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    Cited by:

    1. Zdenko Stacho & Katarina Stachova & Michal Lukac & Vaclav Kupec & Nadezda Petru, 2023. "Management Reflections on Innovations in Digitalization, with an Emphasis on Degree of Work Autonomy," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 26(1), pages 78-93, March.
    2. Yu, Binbin, 2022. "The Impact of the Internet on Industrial Green Productivity: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    3. López, Tatiana & Riedler, Tim & Köhnen, Heiner & Fütterer, Michael, 2022. "Digital value chain restructuring and labour process transformations in the fast-fashion sector: Evidence from the value chains of Zara & H&M," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 22(4), pages 684-700.
    4. Shiya Gao & Zeyu Wang & Shaoxiang Jiang & Wen Ding & Yuchen Wang & Xiufang Dong, 2022. "Optimization of Work Environment and Community Labor Health Based on Digital Model—Empirical Evidence from Developing Countries," IJERPH, MDPI, vol. 19(20), pages 1-17, October.
    5. Agnieszka A. Tubis & Katarzyna Grzybowska & Bartosz Król, 2023. "Supply Chain in the Digital Age: A Scientometric–Thematic Literature Review," Sustainability, MDPI, vol. 15(14), pages 1-25, July.
    6. Grodzicki, Maciej J. & Możdżeń, Michał, 2021. "Central and Eastern European economies in a Goldilocks age: A model of labor market institutional choice," Economic Modelling, Elsevier, vol. 104(C).
    7. Anatoliy Alabugin & Konstantin Osintsev & Sergei Aliukov, 2021. "Methodological Foundations for Modeling the Processes of Combining Organic Fuel Generation Systems and Photovoltaic Cells into a Single Energy Technology Complex," Energies, MDPI, vol. 14(10), pages 1-38, May.
    8. Yu Sun & Yuming He & Haiqing Yu & Hecheng Wang, 2022. "An evaluation framework of IT‐enabled service‐oriented manufacturing," Systems Research and Behavioral Science, Wiley Blackwell, vol. 39(3), pages 657-667, May.
    9. Karishma Banga, 2022. "Digital Technologies and Product Upgrading in Global Value Chains: Empirical Evidence from Indian Manufacturing Firms," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(1), pages 77-102, February.

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