IZA DP No. 12141: The Past and Future of Manufacturing in Central and Eastern Europe: Ready for Industry 4.0?
forthcoming in: Industry 4.0 and Engineering for the Future
In this paper we determine the industry 4.0 (I4.0) readiness of eight Central and Eastern European countries (CEECs): Bulgaria, the Czech Republic, Lithuania, Hungary, Poland, Romania, the Slovak Republic and Slovenia. We outline the nature of manufacturing in the region, describe three distinct time periods of industrialization since 1990, and explain the nature of I4.0. Using measures reflecting three key dimensions of I4.0-readiness, namely technological, entrepreneurial and governance competencies, we find that the Czech Republic, Lithuania, Hungary and Slovenia are most I4.0-ready, and that Bulgaria, Slovakia, Romania and Poland are the least ready of the CEECs. We make a number of recommendations. All the countries in the region could do more to promote entrepreneurship; to diversify and grow manufacturing export markets through focused trade facilitation and competitive exchange rates; and to cooperate regionally on industrial policy - through for instance establishing a regional CEEC I4.0 Platform.