ICT, industry 4.0, innovation, economic growth, productivity, business processes and models, small open economies


The modern age is characterized by strong development and application of information and communication technologies (ICT) and Industry 4.0, which determine significant changes in the economy and society as a whole, and especially affect production and business processes, economic growth and development, productivity, business models, required qualifications and workers’ skills, the education system, as well as people’s daily lives. Thanks to that, developed countries are already achieving significant effects in terms of efficiency, productivity, flexibility, gross domestic product (GDP) and living standards growth, and there are opportunities for small open economies to create their own approaches to accelerate growth and convergence with developed countries. Otherwise, the negative consequences known as digital sharing are also possible.

The aim of this paper is to present, based on relevant literature and experiences of individual countries, the potentials, challenges and possible responses of economic and business policy makers aimed at the application of ICT and Industry 4.0 in small open economies, such as the Western Balkans.

The paper is structured as follows: Introductory remarks - elaboration of the theoretical basis, characteristics and implications of ICT and Industry 4.0 on the economy and society as a whole; Methodology - review of relevant current literature; Results - presentation of basic potentials, challenges and possible responses of small open economies in the function of accelerating economic growth; and Discussion - concluding remarks and recommendations for possible responses.


Abramovici, M. and Stark, R. (2013). Smart Product Engineering: Procededings of the 23rd CIRP Design Conference, Bochum, Germany, March 11-13. Lecture Notes in Production Engineering. Berlin/Heildelberg: Springer. ISBN 978-3-642-30816-1.

Accenture Manufacturing Institute. (2014). Accenture 2014 Manufacturing Skills and Training Study–Out of Inventory Skills Shortage Threatens Growth for US Manufacturing. Retrieved from:,

Alberts. A. et al. (2016). Procedure for Defining the System of Objectives in the Initial Phase of an Industry 4.0 Project Focusing on Intelligent Quality Control Systems. Procedia CIRP, 52, 262-67.

Arntz, M. et al. (2016). The Risk of Automatization for Jobs in OECD Countries, OECD Social, Employment and Migration Working Papers. Paris: OECD Publishing.

Barro, R.J. (2015). Convergence and modernisation. The Economic Journal, 125(585), 911-942.

Barro, R.J., Sala-i-Martin, X. (1992). Convergence. Journal of political Economy, 100(2), 223-251.

Božić, R. (2016). Kako do održivog ekonomskog rasta u malim otvorenim ekonomijama? Zbornik radova Naučni skup: Ekonomija danas – Slobode, konkurencija, subvencije, Univerzitet u Istočnom Sarajevu, Andrićgrad.

Brynjolfson, E. (1993). The Productivity Paradox od Information Technology. Review and Assessment. Retrieved from:

Brynjolfsson, E. and Hitt, L.M. (1996). Paradox Loss? Firm-level Evidence on the Returns to Information System Spending. Management Science, 42(4), 541-558.

Brynjolfsson, E. and Hitt, L.M. (2000). Beyond Computation: Information Technology, Organizational Transformation and Business Practices. Journal of Economic Perspectives, 14(4), 23-48. Retrieved from:

Colecchia, A. and Schreyer, P. (2001). ICT Investment and Economic Growth in the 1990’s: is the United States a Unique Case? A Comparative Study of Nine OECD Countries. OECD, DSTI/DOC 2001)/7th October

Cuaresma, J. et al. (2012). Drivers of Convergence in Eleven Eastern European Countries. The World Bank, Europe and Central Asia Region, Poverty Reduction and Economic Management Department. August 2012, WPS6185, Public Disclosure.

Daveri, F. (2002). The New Economy in Europe (1992-2001). Working paper, 213, University of Parma and IGRIER.

de Man, J.C. and Jan Ola Strandhagen (2017). An Industry 4.0 Research Agenda for Sustainable Business Models. Procedia CIRP, 63, 721–26.

Godin, B. (2006). The Knowledge-Based Economy: Conceptual Framework or Buzzword. Journal of Technology Transfer, 31(1), 17-30.

Gordon, R. (2018). Why Has Economic Growth Slowed When Innovation Appears to be Accelerating? NBER Working Paper No. 24554.

Đuričin, D. and Vuksanović, I. (2016). Platforma za vođenje ekonomske politike u uslovima četvrte industrijske revolucije. Zbornik radova sa 11. Međunarodnog simpozijuma o korporativnom upravljanju: Ekonomije malih zemalja u uslovima pojačanih globalnih izazova. Finrar i Ekonomski fakultet Univerziteta u Banja Luci, Banja Vrućica.

Đuričin, D. and Kuč, V. (2018). Ekonomski kontekst za dostizanje EU korišćenje digitalne transformacije. Zbornik radova sa 13. Međunarodnog simpozijuma o korporativnom upravljanju: Digitalna ekonomija pokretač budućeg ekonomskog rasta. Finrar i Ekonomski fakultet Univerziteta u Banja Luci, Banja Vrućica.

The Economist. (2003). The new ‘new economy’. 11 September.

Foray, D. (2013). The Economic Fundamentals of Smart Specialisation. Ekonomiaz, 83(2), 83-102.

Hermann, M. et al. (2016). Design Principles for Industrie 4.0 Scenarios. Paper presented at 2016 49th Hawaii International Conference on System Sciences (HICSS), Koloa, HI, USA, 3928–37.

Ibarra, D. Et al. (2018). Business model innovation through Industry 4.0: A review. Procedia Manufacturing 22, 4-10.

Industrial Internet Consortium. (2017). A Global Industry First: Industrial Internet Consortium and Plattform Industrie 4.0 to Host Joint IIoT Security Demonstration at Hannover Messe 2017. Retrieved from:

Jalava, J. and Pohjola, M. (2002). Economic Growth in the New Economy: Evidence from Advanced Economies. Information Economics and Policy 14(2), 189-210.

Jorgenson, D.W. and Stiroh, K. J. (2000). Raising the Speed Limit: U.S. Economic Growth in the Information Age. Brookings Papers on Economic Activity, (1), 125-211. Retrieved from:

Jorgenson, D.W. (2001). Information Technology in the US Economy. American Economic Review, 91, (March), 1-32.

Kagermann, H. et al. (2014). Chancen von Industrie 4.0 nutzen. In Industrie 4.0 in Produktion, Automatisierung und Logistic. Wisbaden: Springer, 603-14.

Kagermann, H. et al. (2018). Industrie 4.0: Mit dem Internet der Dinge auf dem Weg zr 4. Industriellen Revolution-DFKI. Retrived from:

Kastels, M. (2000). Uspon umreženog društva. Zagreb.

Krsmanović, B. (2015). Informatičko društvo i ekonomija zasnovana na znanju. Zbornik radova sa 10. Međunarodnog simpozijuma o korporativnom upravljanju: Male ekonomije i nove paradigme ekonomskog rasta. Finrar i Ekonomski fakultet Univerziteta u Banja Luci, Banja Vrućica.

Kuhnová, I. (2017). The Fourth Industrial Revolution Calls for Innovation in Education. Retrieved from:

Lee, I. and Khatri, Y. (2003). Information Technology and Productivity Growth in Asia. IMF Working Paper.

Lee. J. et al. (2014). Service Innovatio and SmartAnalytics for Industry 4.0 and Big Data Environment. Procedia CIRP, 16, 3-8.

Lu, Y. et al. (2017). A survey on technologies, applications and open research issues. Journal of Industrial Information Integration, 6, 1-10.

Machlup, F. (1962). The Production and Distribution of Knowledge in the United States. Princeton: Princeton University Press, USA.

Maresova, Petra, et al. (2018). Consequences of Industry 4.0 in business and economics. Economies, MDPI, 6(3), 1-14, Basel, Retrieved from: http://dx.doi,org/10.33907economies6030046

Mitrović, Đ. (2013). Ekonomski i institucionalni aspekti razvoja informacionog društva. Beograd, Srbija: Centar za izdavačku djelatnost Ekonomskog fakulteta u Beogradu.

Müller, J.M. et al. (2018). What Drives the Implementation of Industry 4.0? The Role of Opportunities and Challenges in the Context Sustainability. Sustainability 10, 247.

National Institute for Education (2018). The Topics. National Institute for Education. Retrieved from:

OECD. (2003). ICT and Economic Growth: Evidence from OECD Countries, Industries and Firms. Paris, France: OECD.

OECD. (2004). The Economic Impact of ICT. Paris, France: OECD.

OECD. (2013). Interconnected Economies: Benefiting from Global Value Chains. OECD Publishing.

Oliner, S.D. and Sichel D.E. (2002). Information Technology and Productivity: Where Are We Now and Where Are We Going? Washington DC, USA: Federal Reserve Board.

Osborne, S.and Strokosch, K. (2013). It takes Two to Tango? Understanding the Coproduction of Public Services by Integrating the Services Management and Public Administration Perspectives. British Journal of Management, 24, S31–S47.

Pereira, A.C. and Romero, F. (2017). A review of meaninigs and implemenattions of the Industry 4.0 concept. Procedia Manufacturing, 13, 12069-14.

Petrillo, Antonella et al. (2018). Fourth Industrial Revolution: Current Practices, Challenges, and Opportunities. Digital Transformation in Smart Manufacturing.

Petrović, P., Brčerević, D. and Gligorić, M. (2019). Zašto privredni rast Srbije zaostaje? Ekonomika preduzeća, 67(1-2).

Piatkowski, M. (2002). The ‘New Economy’ and Economic Growth in Transition Economies. The Relevance of Institutional Infrastructure. WIDER Discussion Paper 2002/62. United Nations University World Institute for Development Economics Research (UNU/WIDER). Retrieved from:

Piatkowski, M. (2003). Does ICT Investment Matter for Output Growth and Labor Productivity in Transition Economies? TIGER Working Paper Series, No. 47, Warsaw. Retrieved from:

Piatkowski, M. (2004). The Impact of ICT on Growth in Transition Economies? TIGER Working Paper Series, No. 59, Warsaw. Retrieved from:

Piatkowski, M. (2005). The Potential of ICT for the Development and Economic Restructuring of the New EU Member States and Candidate Coutries. Washington D.C., USA: IMF and TOGER

Piatkowski, M. and van Ark, B. (2005). ICT and Productivity Growth in Transition Economies: Two-Phase Convergence and Structural Reforms. TIGER Working Paper Series, No. 72, Warsaw. Retrieved from:

Piech, K. and Radosevic, S. (2006). The Knowledge-based economy in central and east Europe: Countries and Industries in a Process of Change. London, UK: Palgrave.

Radosevic, S. (2009). Research and Development, Competitiveness and European Integration of South Eastern Europe. Europe-Asia Studies, 61(4), 621-650.

Radosevic, S. and Stancova, K.C. (2015). External dimensions of smart specialization: Opportunities and challenges for trans-regional and transnational collaboration in the EU-13. S# Working Paper Series, No 09/2015.

Van Ark, B. et al. (2002). ICT Investment and Growth Accounts for the European Union, 1980-2000. GGDC Research Memorandum GD-56, Groningen Growth and Development Centre, revised March 2003. Retrieved from:

Van Ark, B. and Piatkowski, M. (2004). Productivity, Innovation and ICT in Old and New Europe. Research Memorandum GD-69, Groningen Growth and Development Center, March. Retrieved from:

Schlechtendahl, J. et al. (2015). Making existing production systems Industry 4.0-ready. Production Engineering 9, 143–48.

Stiroh, K. (2002). Information Technology and the U.S. Productivity Revival: A Review of the Evidence. Business Economics, XXXVII (1), 30-37. Retrieved from:

Szalavetz, A. (2000). Adjustment of Hungarian engineering companies to the globalizing corporate network. In Z. Bara and L. Csaba (Eds.) Small economies’ adjustment to global challenges 8357-376). Budapest, Hungary: Aula Publishing

Szalavetz, A. (2002). The Tertiarization of Manufacturing Industry or the Role of ICT in the Second Phase of Restructuring. The ‘New Economy’ and Old Problems. Prospects for Fast Growth in Transition Economies, March 14 – 15, Warsaw. Retrieved from:

Zhen-Wei, C.Q and Pitt, A. (2003). Contribution of Information and Communication Technologies to Growth. Washington, USA: World Bank.

Zhou, K. et al. (2015), Industry 4.0: Towards future industrial opportunities and challenges. Paper presented at 2015 12th International Conference on Fuzzy Systems and Knowledge Discovery (FSKD), Zhangjiajie, China, 2147–52.






Review Scientific Paper

How to Cite

MODERN TECHNOLOGIES AS A DETERMINANT OF SUSTAINABLE ECONOMIC GROWTH AND DEVELOPMENT OF SMALL OPEN ECONOMIES - Potentials, challenges and possible responses -. (2021). Acta Economica, 19(34), 85-112.

Similar Articles

1-10 of 354

You may also start an advanced similarity search for this article.

Most read articles by the same author(s)

1 2 3 4 5 6 7 8 9 10 > >>