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Industry 4.0 impact on management practices and economics

Periodic Reporting for period 2 - IN4ACT (Industry 4.0 impact on management practices and economics)

Reporting period: 2020-01-01 to 2021-09-30

1. What is the problem/issue addressed
Industry 4.0 (I4.0) is a systemic process that is bound to affect the entire range of business management practices and economics regardless of the industry in which firms are located as well as the social, regulatory, and institutional contexts in which they operate. Its implementation depends on putting in place a wide-ranging set of “enabling framework conditions”. In addition, the implementation of I4.0 will require sustained engagement with all key stakeholders. In other words, the realization of the potential of I4.0 is dependent on the reconfiguration of existing structures of production, civil society and public administration.

This is the context that underpins the rationale of IN4ACT. Apart from the challenges for decision-makers, I4.0 imposes a tall order of changes in the relations of higher education institutions (HEIs) and society. On the one hand, conventional academic divisions are increasingly under pressure from complex interdependencies of technological advances, new forms of economic dynamics, and power structures that make it difficult to develop explanations from within individual scientific specializations. On the other, these transformations are creating a need for reconfiguring the design of academic programs offered by HEIs: the challenge for HEIs is to move from a “re-active” posture of ex post facto analysis to a “pro-active” one that allows scientific research to anticipate (to the extent possible) emerging trends and intervene in influencing their future course.

2. Why is it important for society
Today we seem to be entering a period of momentous historical transformation. Its dominant economic manifestations are clusters of technologies that generate profound shifts across industries, business models, disruption of incumbents, and the reconfiguration of production, consumption, transportation, logistics and delivery systems. Its societal manifestations involve paradigm shifts in labor, skillsets and employment, communication and entertainment practices. On the level of governance, governments are being reshaped, as are systems of education, and healthcare. New ways of using technology to change systems of production/consumption also present the potential for the protection of natural environments, rather than creating new externalities regimes. Developments in genetics, AI, robotics, nanotechnology, 3D printing and biotechnology are interacting with and intensifying one another. This is laying the ground for a transformation more comprehensive than anything we have ever seen.

In this context, the set of issues addressed by IN4ACT is highly relevant to critical emerging needs of society. These issues are at the center of the “grand challenges” of society as they are likely to have a decisive impact on the future course of technological, economic and social development. The in-depth research of these issues, the elucidation of their possible future trajectories, and raising awareness of what is at stake is the core value-added differentiator of IN4ACT.

3. What are the overall objectives of the project
The overall objective of IN4ACT is to implement structural changes at the KTU School of Economics and Business (SEB) through the opening of an ERA Chair in “Industry 4.0 Management and Economics” research. The main objectives of the ERA Chair are:
1. Implement an ambitious research agenda on the impact of I4.0 on management practices and economics;
2. Drive changes at the KTU SEB related with research management and HR, especially to comply with the ERA priorities;
3. Improve and expand the SEB’s exploitation, dissemination, and communication capacities;
4. Develop networks and increase links with stakeholders, especially to increase participation in H2020.
Main outcomes:

WP1 ERA Chair recruitment:
D1.3 ERA Chair holder interviews assessments
D1.7 ERA Chair team members interviews assessments

WP2 Research and human resources policies upgrade:
D2.1 Revised recruitment and human resources management policies
D2.2 Research performance monitoring system guidelines

WP3 Research excellence and enhancement:
D3.1 ERA Chair research strategy
D3.3 Updated doctoral training programme regulations

WP4 Staff mobility increase:
D4.1 Network development strategy

WP5 Dissemination and communication:
D5.1 Project Website
D5.2 Plan for Exploitation and Dissemination of Results

WP6 Research fundraising capacity building
D6.1 Year 2 research fundraising report

WP7 Exploitation and impact boosting:
D7.1 Framework development for alignment between research strategy and smart specialization strategy
Scientific/research novelty
The current dominant approaches to the subject of I4.0 are marked by an almost exclusive emphasis on the “future manufacturing paradigm”. However, though the production aspects are central, I4.0 involves and more encompassing systemic transformation that has a wide range of impacts on civil society and the institutional structures of governance, in addition to economic and manufacturing ramifications.

In this context IN4ACT makes a distinct contribution to moving research and higher educational design on I4.0 beyond the state-of-the-art. This is structured around two axes: 1) the project’s interdisciplinary and multi-level research strategy, and 2) the project’s network development and multi-stakeholder engagement strategy.

Given the scale, breadth, and systemic nature of the process of transformation associated with I4.0 the IN4ACT research strategy is structured around three levels:

Level I: Micro-level: I4.0 at the level of the firm, functions and phases of production: (Research: the decomposition/re-composition of production and the changing value composition of GVCs; AI, cloud computing, big data, algorithmic models, and the Internet of Everything; the platform economy, its typology and economic specificity; platform economy business models).
Level II: Meso-level: I4.0 at the level of regions and regional innovation ecosystems: (Research: centralization vs. decentralization in I4.0; the changing economic geography; commoditization and “smart specialization”; symbiotic vs. parasitic ecosystems).
Level III: Macro-level: I4.0 at the level of governance, policy, regulation and sustainability: (Research: comparative readiness for I4.0; I4.0 skillsets; I4.0 and socially inclusive development; governance: regulation, innovation and sustainability).

The IN4ACT network development and multi-stakeholder engagement strategy is organized around five areas relevant to I4.0 research, implementation, and social outreach: research/education, business/management, policy-making/regulation, conferences and participation in public forums, and scientific/professional publications.

The main objective of the strategy is to provide IN4ACT with a unique vehicle through which to gain a deeper understanding of the tactical and strategic issues of I4.0 stakeholders while at the same time enable the ERA Chair research strategy to better calibrate its strategic research, communication and dissemination objectives in order to maximize the project’s impact across the academic/research, business, and policy/regulation communities.
Networking Event at Business Forum of Lithuania (12/11/2019)
Project Team
Plenary presentation at AIB-CEE Chapter conference (25/09/2019)
Workshop in Ministry of the Economy and Innovation of the Republic of Lithuanian (21/10/2019)
Presentation at Business Forum of Lithuania (12/11/2019)
In4Act Logo