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Institutionalization of the Fourth Industrial Revolution in National Economics and on Global Market: Different Paths to Success

Abstract

 This paper evaluates different approaches to embeddedness of the Fourth Industrial Revolution in national economics and on global market. The numerous and varied attempts to achieve success amidst this turbulent and constantly changing global market has created two main paradigms of institutional policy, correlating with the countries that initiated and/or achieved the embedding of the Fourth Industrial Revolution. The state, as the initiator, pursues a top-down policy: imposing formal institutions and stimulating business in every way possible to modernize its activities in accordance with the principles of the Fourth Industrial Revolution. If the idea of the Fourth industrial revolution was instead initiated by business, then a down-top policy is implemented: the state turns out to be a weak actor which adapts to changing conditions and is modernized through digitalization. Top-down policy is implemented mainly in Natural States; down-top policy (sometimes known as bottom-up policy) is mainly a characteristic of Open Access Order countries. Since the Fourth Industrial Revolution is associated with high level of technology (such as the development of the Internet of Things), the leading role in the global market is played by industrialized and post-industrial countries, as they are creating an institutional image of the new global market. Thus, the Open Access Order has the greatest impact on the development of the global market. The main goal of this research is to define the paths of institutional policy amidst the Fourth Industrial Revolution, whether in Natural States or in Open Access Order, through applying the methodology of Douglass North. Its impact on the global market can also be ascertained. Institutional and comparative analysis methodology was used in the research. The results indicate that (1) Natural States pursue a top-down policy to embed the institutions of the Fourth Industrial Revolution, (2) Open Access Order goes radically other way by employing a down-top path, and (3) digitalization occurs according to the chosen institutional policy. These findings not only make it possible to adjust the Fourth Industrial Revolution, but also to modify the institutions already in force. The experiences of those Fourth Industrial Revolution initiatives that have already been implemented in selected national economies avoids institutional traps, and allows those countries that have embarked on a different path to succeed.

Keywords

  • Fourth Industrial Revolution
  • Natural state
  • Open Access Order
  • Institutional policy
  • Global market

JEL Classification

  • L16
  • L52
  • K24

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Correspondence to Vladimir Osipov .

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Osipov, V., Rončević, A. (2021). Institutionalization of the Fourth Industrial Revolution in National Economics and on Global Market: Different Paths to Success. In: Konina, N. (eds) Digital Strategies in a Global Market. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-58267-8_4

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