Abstract
Over the years, manufacturing in advanced economies has been the object of intense reorganization driven crucially by the international strategies of multinational enterprises (MNEs), and more recently, by technological disruptions powering a new manufacturing model, defined as Industry 4.0 (I4.0). This paper aims to explore firm-based, place-based and global drivers that can determine high levels of companies’ performance in the context of the emerging manufacturing model ‘I4.0’. In particular, our article tests the relative importance of and balance between three determinants of MNEs’ performance: (i) MNEs’ internal operations and R&D capabilities; (ii) reliance on local external economies and co-location with high-value service and technological competence; and (iii) the extent of MNEs’ production in terms of spread across global value chains. We empirically address this issue by surveying top managers of MNEs operating in four advanced manufacturing industries (biotech, engineering, fashion, and new materials) and located in five European countries (Germany, Italy, Spain, Sweden and the United Kingdom). We adopt fuzzy-set qualitative comparative analysis, a configurational, case-oriented approach. MNEs can be highly profitable when they follow different, but equally successful, paths. Our findings shed light on which balance between firm-based, place-based and global drivers positively impacts on companies’ performance in European advanced manufacturing sectors. In particular, we find that companies that collaborate with local suppliers of enabling technologies linked to I4.0 - with regard to the variety and intensity of collaborations- show high levels of performance. Policy implications are drawn in the concluding remarks.
Highlights
In the last decades, the industrial fabric of advanced economies has been reshaped primarily by the creation of global value chains (GVCs) coordinated by multinational enterprises (MNEs) and, more recently, by a disruptive wave of new technologies that are emerging and are expected to impact on sectors and markets (OECD 2017).The internationalization of economic activities has led to the formation of GVCs (Gereffi et al 2001) and, global regionalism (Baldwin 2011) whereby production processes are sliced up and located worldwide
It is wellaccepted that MNEs have managed their GVCs by locating different functions in different parts of the world depending on their competitive advantage
We explore the extent to which MNEs can rely on resources that can be found either in-house or within their value chain- albeit global- and on resources that are pooled in the local context in which they are homed
Summary
The industrial fabric of advanced economies has been reshaped primarily by the creation of global value chains (GVCs) coordinated by multinational enterprises (MNEs) and, more recently, by a disruptive wave of new technologies that are emerging and are expected to impact on sectors and markets (OECD 2017).The internationalization of economic activities has led to the formation of GVCs (Gereffi et al 2001) and, global regionalism (Baldwin 2011) whereby production processes are sliced up and located worldwide. The increasingly dovetailing of manufacturing and high-value service functions, through processes of servitization, is fundamentally changing the nature of products, firms’ business models and the modes of consumption from ownership to use (Vandermerwe and Rada 1988) Accessing and adopting such new technologies (and the competences and services attached to them) will have major implications for the strategies and performance of MNEs. In this article, we explore the extent to which MNEs can rely on resources that can be found either in-house or within their value chain- albeit global- and on resources that are pooled in the local context in which they are homed
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