Internationalization 4.0 and emerging countries

Industry 4.0, what lies behind this new “4.0 brand”? This hot topic has been the focus of many reports and debates.

New ways of interaction between humans and machines, improvements in transferring digital instructions to the physical world, such as 3D printing and advanced robotics and the emergence of analytics and business intelligence are dimensions of this new 4.0 phenomenon.

That  has no implications in the 4th Industrial revolution (as mentioned by some consultants) but signals relevant changes in the digitalization of both manufacturing and services. Developed economies, especially Germany and the U.S., are leading the process, but one asks, what’s in it for emerging countries? What will be the impact of those new technologies? What role will emerging country firms play in that new scenario? Will they be acquired, or simply vanish, or will they make it through such a turbulent environment?

In my opinion, one of the key answers is to enhance firms’ exposure to both domestic and international competition, to increase internationalization, to learn from those experiences.  Internationalization 4.0 (if we want to keep the cabalistic number 4) means advancing in that direction, motivated by the search of new technologies and innovations.

In a recent survey  (Gv CEI, 2016) with 200 Brazilian multinationals and their subsidiaries  (1,200 units) the main motivation for establishing new operations abroad was access to technology  (five years ago, in a previous survey, access to market was the main reason). The main destination now is the U.S.; not Latin America.

Internationalization 4.0 means moves aimed at technological learning. Good examples are IT firms  (small, newly-created) that are establishing operations in Silicon Valley, with a view to embed in that region and profit from its innovative ecosystem.

Technological innovation is also the driver for firms like WEG, a Brazilian manufacturer of electric motors, generators and transformers, which is now investing in wind power. It has subsidiaries in 22 countries; its internationalization process targets products and markets where digital technologies prevail.

With regards to big data and business analytics, IT firm Stefanini now has research centers in the U.S., and Romania. Recently it invested in a new R&D Lab focused on Business Analytics in Singapore.

Last but not least, internationalization 4.0 reinforces the global mindset of companies, those that really face the new challenges of competition and innovation. Such firms will bring back innovation to their home countries, contributing to development through a positive contamination.

Maria Tereza Fleury, Dean of FGV SP and Professor  FGV EAESP

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