International Comparison and Trade Effects of Digital Innovation

Abstract

The fourth industrial revolution is the ongoing industrial revolution driven by intelligent information technology. The digital innovations related to artificial intelligence, big data analysis, cloud computing, and the internet of things are driving hyper-connectivity between all products and services through global networks, thereby advancing the data-driven economy. In particular, the data-driven technologies combined with new technologies and established industries and services contribute to the new business models, thereby bringing about the so-called digital disruption. The recent digital innovation has been accelerated by the market needs to the extent that the mass production system of the established industries needs to be changed into a personalized production system. All the materials and phenomena in the physical world with analogue characteristics have been transformed into digital data to a substantial degree, in terms of speed as well as magnitude. In addition, artificial intelligence systems which can find optimal solutions through data analysis have been utilized widely in various socio-economic areas. The digital innovation taking place in the wake of the fourth industrial revolution is having disruptive effects on products, production processes, and business models of the established industries.