Technology adoption and upskilling in the wake of Industry 4.0

Understanding how Industry 4.0 (I4.0) technologies complement each other on one side, and human skills on the other, is an increasingly important concern for managers and policymakers alike: it is essential for the optimi-zation of firm-level sociotechnical interactions as much as it is vital to smoothen the digital transition on a global scale. However, firm-level evidence on patterns of conjoint adoption of I4.0 technologies and their relationship with skills is still scant. The present work contributes to covering this gap by leveraging a large cross-sectional database of Italian firms. Distinguishing between digital and physical I4.0 technologies, we find that companies are primarily (though not exclusively) driven toward either the former or the latter category of technologies. Additionally, we find that both the adoption of digital I4.0 technologies and the adoption of physical ones lead to the upskilling of non-ICT employees alongside ICT-specialized personnel. However, small firms seem to be constrained in their ability to follow the same upskilling strategy as their larger counterparts. This may have key practical implications, especially in the context of recent industrial policies enacted at the European level.

Automated summary

Understanding the relationship between Industry 4.0 technologies and human skills is crucial for optimizing sociotechnical interactions and facilitating global digital transition. However, there is a lack of firm-level evidence on the adoption patterns of different I4.0 technologies and their impact on skills. This study fills this gap by analyzing a large database of Italian firms and finds that companies are primarily inclined towards either digital or physical I4.0 technologies, with both types leading to upskilling of employees. However, small firms face constraints in implementing similar upskilling strategies as their larger counterparts, which has important implications for industrial policies at the European level.