Smart manufacturing relates to the combination of innovative technologies: advanced software, augmented reality, sensors, big data analytics, robotization and additive manufacturing, that allows new processes, production systems and products. These technologies offer greater flexibility for industrial processes, ease decentralized and autonomous decisions, help manufacture customized products and support the scale of production. These new patterns of innovation in production processes entail many positive externalities for firms. Nevertheless, if appropriate actions are not taken, this new industrial cycle will once again become another missed opportunity for the region's technological development.
The degree of incorporation and diffusion of advanced technologies in the business fabric depends on a set of factors of different nature. These may be associated with the company's own characteristics such as their size, the sector to which they belong, the organizational structure, the human and financial resources they have, the relationship with customers and competitive pressure, among others. Likewise, technological factors affect its adoption due to costs, availability of solutions and standards, among other reasons. The enabling environment is also another crucial element that condition the adoption of smart manufacturing in regard with the availability of skilled labor, incentives for investment and the modernization of rules and regulations to boost innovation, these aspects strongly influence and condition the diffusion and appropriation of technologies in firms (Rovira, Santoreli and Stumpo, 2016).
Besides the challenges ahead the fourth industrial revolution presents an important opportunity for Latin America and the Caribbean. The pandemic brought with it a significant economic and social crisis but also encouraged the adoption of new technologies in various productive activities, accelerating innovation and changing consumption patterns. This stimulus can be used to prompt technological change, but the momentum for the adoption of new industrial technologies will depend on an institutional design that encourage innovation and provides an enabling environment for more technological intensive activities.
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