The emergence of Industry 4.0 technologies across Chinese cities: The roles of technological relatedness/cross-relatedness and industrial policy

Industry 4.0 technologies have emerged as a focal point of regional technological competition in the Fourth Industrial Revolution. However, research on the emergence and determinants of innovation in Industry 4.0 technologies remains limited, especially in developing countries. Using Chinese patent data from 2001 to 2020, this study identifies the emergence of Industry 4.0 technologies across Chinese cities and explores the driving roles of relatedness/cross-relatedness and industrial policy in this process. Our findings indicate that relatedness/cross-relatedness between new technologies and Industry 4.0, Industry 3.0, and other technologies significantly increase the probability of a city developing a new specialization in Industry 4.0 technologies. The positive impact of relatedness within Industry 4.0 technologies indicates a self-reinforcing characteristic in their development. Furthermore, cross-relatedness between Industry 4.0 and Industry 3.0 technologies only promotes the specialization in Industry 4.0 technologies related to Industry 3.0 and benefits cities with a substantial Industry 3.0 foundation. Industrial policy also plays a crucial role, directly fostering specialization in Industry 4.0 technologies and indirectly enhancing the effects of relatedness/cross-relatedness. This study offers valuable policy insights for developing regional strategies to foster innovation in Industry 4.0 technologies.