On the Brink of Revolution: Restructuring Global Value Chains and the Consequences for Development under the Fourth Industrial Revolution

Mads Dalgaard Madsen & Rasmus Alexander Kyndal

Student thesis: Master thesis

Abstract

Through a future oriented research methodology based in critical realist epistemology and ontology, this study uncovers the likely impacts of emerging technologies (internet of things, cloud computing, big data analytics, artificial intelligence, virtual and augmented reality, industrial robotics, 3D printing and blockchain), broadly described as the Fourth Industrial Revolution, on Global Value Chains (GVCs) and the development prospects of Africa. Thereby, the thesis answers its main research question about how the technological change promised in the Fourth Industrial Revolution influences the organization of GVCs and the implications for development. The study begins by uncovering the role of technology in the GVC literature and suggests - through theoretical modularization - that the literature to great benefit can be complemented by the theories of technological paradigms and revolutions formulated by Dosi (1982) and Perez (2002). Based on a modularized framework of GVC theory and paradigmatic theories about technological change, the study conducts a series of interviews with management consultants, Fourth Industrial Revolution agenda setters and development experts and finds that the revolution brings about a new technological and managerial common sense that changes governance mechanisms and distributions of value-added in GVCs. The thesis discusses how it is likely that these changes will lead to shorter and digitally integrated value chains that are more regional than global in their geographies. In terms of development, the thesis argues that the changes in the organization of GVCs pose significant challenges for African GVC participation and upgrading. Thus, it is unlikely that development in Africa can follow the previously successful GVC development path of East Asia and China. In doing so, the thesis argues that the Fourth Industrial Revolution challenges the development prospects of the developing world. Through its findings, the thesis illuminates a near future and thereby prepares businesses, politicians and academia for the Fourth Industrial Revolution.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2018
Number of pages142