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Industry 4.0 as an answer to the productivity gap in European catchingup economies?

The recent productivity growth slowdown, experienced both in developed as well as in emerging EU economies, has become a major worry for both companies and policy makers. The emerging technologies of Industry 4.0, spurring the fourth industrial revolution, are expected to slow down the decline and improve productivity trends. However, the implementation of new technologies in Europe is slower than desirable, with significant differences across countries, sectors, company sizes, and export orientation. This paper explores the effects of new technologies on productivity growth in emerging economies and proposes a comprehensive policy approach that would stimulate companies to adopt Industry 4.0 technologies. It must be built on the analytical-diagnostic approach, taking into account the already achieved levels of development and the specifics of a country. It should consider domestic and foreign experiences (i.e., have an eclectic view) as well as tit-for-tat (carrot and stick) strategies.