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Chemical production modernization in the formative phase of Industry 4.0: study of trends and problems of investment support

Author

Listed:
  • Shevtsova Hanna

    (Institute of Industrial Economics National Academy of Sciences of Ukraine, Kyiv)

  • Maslosh Olha

    (Volodymyr Dahl East Ukrainian National University, Severodonetsk)

Abstract

The object of the research is the investment process of modernization of chemical production. The long-term systemic crisis in the Ukrainian chemical industry, unprofitability and high capital intensity of production are constraining factors for its radical modernization. Modern tasks of digitalization of production and introduction of smart innovations form new problems and require new approaches to their solution. In the process of research, the methods of analysis and synthesis, comparison, structural analysis, generalization and graphical method were used. The analysis of foreign practice of innovative investment in chemical production found that the development strategies of companies and their investment priorities depend on the role of the segment in the global value chain. Industry leaders are diversifying their investment portfolios in the direction of high technologies for deep processing and production of high-tech low-tonnage products. At the same time, the technologies of Industry 4.0 and smart manufacturing become an integral part of their innovative investment strategies. The study of trends and problems of investment support for the Ukrainian chemical industry showed that its traditional business model is gradually losing its resource and technological basis, and there are not enough investments within the industry for large-scale modernization. For external investors, certain segments of the chemical industry, producing liquid differentiated small-tonnage consumer goods, are of particular interest. Promising approaches to the revitalization of investment activities in the chemical industry in the context of the formation of the Industry 4.0 are identified. They are based on the special role of chemical production as a supplier of smart materials and technologies, making it a necessary component of any innovation ecosystem. It is shown that external investments for the smart modernization of the industry should be sought among the industries consuming chemicals. It is substantiated that small and medium-sized enterprises should become the key subject of Industry 4.0 processes in the Ukrainian chemical industry. Considering the insufficient technological readiness and investment support of such entities, their specialized support and program financing is necessary. The proposed approaches allow overcoming the existing internal and external limited financial resources and mobilizing investments to launch smart modernization of chemical production.

Suggested Citation

  • Shevtsova Hanna & Maslosh Olha, 2019. "Chemical production modernization in the formative phase of Industry 4.0: study of trends and problems of investment support," Technology audit and production reserves, 1(45) 2019, Socionet;Technology audit and production reserves, vol. 1(4(45)), pages 30-37.
    • Handle: RePEc:nos:ojbutx:4
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    References listed on IDEAS

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    1. Iuliia Kornieieva, 2018. "The role of state in promoting investments in digital development," Economy and Forecasting, Valeriy Heyets, issue 1, pages 120-134.
    2. Newman, Carol & Rand, John & Talbot, Theodore & Tarp, Finn, 2015. "Technology transfers, foreign investment and productivity spillovers," European Economic Review, Elsevier, vol. 76(C), pages 168-187.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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