Influence of Investment in Fourth Industrial Revolution (4IR) Technologies on Cost of Production of Manufacturing Industries in Tanzania

Résumé

The study assessed influence of investment in 4IR technologies on production costs of manufacturing industries in Tanzania. Specifically, the study set out to establish relationship and causality of investment in 4IR technologies on manufacturing industries’ costs of production. To achieve the research objectives, the study used a quantitative descriptive design to generate the required data. Moreover, the study used structured questionnaires for cross-sectional survey, administered with 225 production managers of manufacturing industries in Tanzania. It used probability sampling in the form of cluster sampling. Additionally, the study used Pearson correlation and the Least Square methods to analyse the objectives of the study. The study found a statistically significant causal effect between investment in 4IR technology and manufacturing firms cost of production whereby, when manufacturing firms increase investment in 4IR technologies by 1 unit, the production cost of such firms will increase by 1.08 units. These results are supported by further findings from the Pearson correlation analysis between investment in industry 4.0 and cost of production of manufacturing firms which indicate positive relationship. When manufacturing firms increase investment in 4IR technology their cost of production will also rise. Implicitly, the emergence of 4IR to countries like Tanzania that are not sufficiently prepared on modern technology supportive infrastructures, policies, strategies and technology governance quality, may occasion a decline in production due to increase in costs of manufacturing firms. This study calls on the Tanzania Government to review and improve its Sustainable Industrial Development Policy of 2020 and the Integrated Industrial Development Strategy of 2025 to promote and support both resource-based industries and technological based industries and speed up industrialization within the country. The government should also improve its investment policies and align them with technological changes brought by 4IR, to attract more foreign direct investments thus further facilitate importation, adoption and imitation of 4IR technologies from developed countries that lead to production cost decline in long-run and enhance productivity of the manufacturing sector