Natura Non Facit Saltus: Challenges and Opportunities for Digital Industrialisation Across Developing Countries

In this paper, we discuss the challenges and the opportunities faced by developing countries that want to join the so-called Fourth Industrial Revolution (4IR). We first point out that the current discourse on 4IR is often based on poor understanding of the true nature of the phenomenon. Emphasising that many of the so-called 4IR technologies have been there and evolving rapidly in the last half a century, we argue that what defines 4IR is the fusion of these technologies. Given this, we argue, rather than trying to master particular 4IR technologies, developing countries should first focus on acquiring what we call the foundational capabilities, i.e. the capabilities to learn new technical and organisational solutions and apply them in creative and flexible ways. Using this perspective, we then discuss in great detail how different 4IR technologies are re-shaping each industry and creating new industries through technological fusion, while discussing how these changes are affecting the opportunities and challenges faced by developing countries for industrial development. We conclude the paper by discussing the implications of our findings for industrial policy in developing countries.