Industry 4.0 at work: economic implications and evidence from the Italian market

Technological advances have always been seen in two ways: great opportunities on the one hand, great threats on the other. This contrasting feeling is due to the intrinsic nature of innovations: created as tools to improve productivity and realise economic gains, under certain conditions they can cause a reduction in employment and wages. After a literature review concerning the relationship between general automation and the key labour market variables (productivity, employment, and wages), an overall decline in the labour income share of the main OECD countries was highlighted. This result, together with the identification of technological advance as the most determining factor, raised questions about the role that has been and will be played by the most recent technological wave, namely Industry 4.0. Therefore, after outlining its driving forces and barriers, the final section studied its impact on the Italian market. Specifically, based on the Bank of Italy’s “Survey of Industrial and Service Firms”, interesting results emerged, among all a lack of significance on Industry 4.0 actually reducing the Italian share of labour income.