From globalization to reshoring? The role of Industry 4.0 in global value chains across Europe

Industry 4.0 (I4.0) technologies exhibit peculiar characteristics and can play a diverse role in the reconfiguration of global value chains (GVCs) and global sourcing geography. This paper explores the relationship between Industry 4.0 technologies and reshoring within Europe, focusing on additive manufacturing (AM), the Internet of Things (IoT), and advanced industrial robots (AIR). Utilizing data from the OECD Inter-Country Input-Output (ICIO) tables and Eurostat’s Comext database (on international trade in goods) for 27 European countries and the UK from 2009 to 2018, the findings reveal a positive correlation between AIR adoption and reshoring. Conversely, increased IoT investment appears to reduce reshoring and the impact of AM on reshoring is negligible. The research also examines reshoring’s geographical aspects, showing that AIR adoption promotes reshoring from Asia, whereas higher IoT investments correspond to a decrease in reshoring from the region. These results highlight the complexity of reshoring dynamics, which are influenced by both specific I4.0 technologies and geographic context. The study provides new insights into the reconfiguration of GVCs and manufacturing landscapes in the era of the Fourth Industrial Revolution.