Why do 4IR technologies matter for the organization of the automotive ecosystem?

Technologies driving the so called “Fourth Industrial Revolution” (4IR) - such as those related to connectivity, 3D systems, and data analytics - are increasingly pivotal in complex-product industries such as the aerospace or automotive ones. The introduction of such technologies may have profound impacts on these sectors in terms of productivity growth, competitive interaction, and value chain reorganization. To shed light on this phenomenon, this study investigates the knowledge base driving 4IR innovation within the automotive industry. The findings show that the 4IR knowledge base and its evolution differ from more «traditional» automotive technologies along several dimensions, including the way actors organize their 4IR knowledge sourcing and creation processes, and protect the outcomes of such processes. Specifically, compared to non-4IR technologies (such as those related to traditional mechanical engineering), 4IR inventions (such as those related to connectivity or autonomous driving) tend to be of higher quality, technologically broader, protected across a higher number of countries and more frequently used internally. In addition, compared to automotive players’ patenting in non-4IR technological domains, the 4IR field features a greater degree of competitive turbulence, revealing that the industry has yet to converge toward a stable technological leadership in 4IR technologies and that, at different stages of the automotive value chain, there are several actors committed to advance the field in a dynamic way. These players are mainly large corporates, often US-based and originating in the field of Industrial, Electric and Electronic Machinery, Communications and Business Services. This confirms that the opportunities associated with 4IR technologies might trigger relevant changes in the current organization of the automotive ecosystem. Managerial implications for automotive incumbents include: 1) Recognize the differences between 4IR technologies and “traditional” automotive technologies: learn how to best organize the knowledge creation process to create leadership in these emerging domains. 2) Capitalize on existing integrative capabilities: continue to invest in the systems integrator role, which bears legal and regulatory responsibility towards customers and public authorities. 3) Look outside of the industry’s knowledge base: potential new players represent a competitive threat but are also an important reference point to automotive incumbents, both as sources of knowledge used to generate 4IR inventions and as partners in R&D collaborations. Introduction & Research Question Emerging technologies related to digitization and networking have gained a central role in the innovative efforts of contemporary organizations, to the extent that policy makers and practitioners point to the digital transformation as to a Fourth Industrial Revolution (4IR). The sustained pace of innovation in digital-related technologies has thus raised compelling questions about the opportunities and challenges for the actors involved. Although an agreement on the contents and attributes of the 4IR technologies is still forming, it has been argued that technology development in such domains could trigger significant modifications in firms’ innovation processes (Adner et al., 2019), strategic postures in the creation and protection of innovative outcomes (Teece, 2018) and industry-level organizational practices (Lee and Berente, 2012). More specifically, literature has suggested that 4IR technologies can be recombined with the knowledge base of different industrial contexts and applied in a wide range of products and processes (Teece, 2018; Martinelli, Mina and Moggi, 2021). Despite these insights, few studies have analyzed the patterns of 4IR innovative activities in established, complex-product industries, which make use of different engineering principles altogether. This is a relevant area of investigation, because the role of 4IR technologies is likely to vary across industrial settings. On the one hand, 4IR technologies could contribute to both boosting and curbing such complexity (Teece, 2018; Adner et al., 2019), by instigating qualitative changes in core processes underlying firms’ decision making, organizational design and technology evolution. On the other hand, in such contexts characterized by a pyramidal structure with original equipment manufacturers (OEMs) coordinating a network of suppliers and sub-suppliers (Whitford, 2005), the emergence of a new wave of digital innovations in product and production technology could generate dramatic modifications in the organization of the business ecosystem (Brettel et al., , 2014). Ultimately, this could result in digital convergence and disruption (Teece, 2018), exposing incumbents to serious competitive threats. Given the impact that 4IR technologies may generate on complex-product industries in terms of productivity growth, competitive interaction and value chain reorganization, this study addresses the following research question: What are the key features of the knowledge base behind the 4IR in the automotive industry? And how do they influence the organization of its ecosystem?