The Next Production Revolution: Potential Impacts on Developing Nations

There is both excitement and trepidation about the so-called “Fourth Industrial Revolution” and its ability to power growth around the world—and one critical question is how its impacts may differ in developed and developing economies.

Writing in a new book by the Institute for Policy, Advocacy, and Governance (IPAG), ITIF President Rob Atkinson argues that while both developed and developing economies will benefit, developing economies will benefit less. That is because their lower labor costs provide less incentive to replace labor with technology, and because new production systems appear to enable shorter production runs and smaller factories, both of which should enable reshoring to higher-wage nations.