COVID-19 and industrial resilience in the Global South. The case study of the auto parts sector in Mexico.

Type de publication:

Conference Paper

Source:

Gerpisa colloquium, Paris (2021)

Résumé:

The global COVID-19 pandemic not only affected the global health system and established economic systems.  It also exposed the insufficient resilience of supply chains and the fragility of employment in most economic sectors.  The COVID-19 effects in the global economy have shown the low levels of readiness in firms to react to major global disruptions and the critical relevance of digital technologies in manufacturing production.

This study presents an empirical analysis of the auto parts sector's technological readiness in Mexico (just before the pandemic) and identifies the strategies adopted by automotive firms to cope and survive the economic effects of the COVID-19 restrictive measures.  The research adds to the growing interest in the literature on supply chain resilience and the adoption of industry 4.0 technologies in manufacturing.

The rapid and global spreading speed of COVID-19 forced governments worldwide to impose (on different levels of intensity) a series of adaptive actions of isolation and closure of non-essential businesses.  The global discussion centered on the trade-off between hurting national economies or maintaining their health systems' stability.  The choice was made (with some infamous exceptions) to protect the health system by forcing lockdowns and releasing rescue plans to keep businesses from their economic losses.  Recent empirical analyses have shown that these policies have harmed the economy by reducing corporate performance (Shen et al., 2021; UNCTAD, 2020), having adverse effects on exchange rates (Iyke, 2020), influencing persistent shocks on oil prices (Gil-Alana and Monge, 2020), and other unforeseen economic effects.

Empirical studies from the supply chain resilience literature have found that one of the best strategies perceived by the automobile industry to mitigate the economic effects of COVID-19 has been the adoption of Industry 4.0 (I4.0) technologies (Belhadi et al., 2021).

The increasing adoption of I4.0 technologies (i.e., digitalization, robotization, cloud computing, HPC, augmented reality, artificial intelligence, among others) has been changing the production, distribution, and managerial configurations industries in the North already for the last 5 to 10 years.  Nevertheless, the adoption rate of I4.0 has not been as fast as expected by the literature, particularly in the Global South, which dependency of their manufacturing production to Multinational Corporations (MNCs) is extremely relevant to understand the processes through which I4.0 technologies are implemented and adopted in MNCs' subsidiaries (Gehl-Sampath and Vallejo, 2018; Kraemer-Mbula and Monaco, 2020; Szalavetz, 2019).  In a globalized economy, these new operating ecosystems will pressure and push for reconfiguration, affecting the South's technological, social, and institutional aspects.

This research is based on two independent surveys and complemented with in-deep interviews with auto parts suppliers.  The first survey (named Baja I4.0) addresses the level of adoption and knowledge of I4.0 technologies among auto parts firms in 2019 (before COVID-19).  The second survey explores the mitigation and resilience strategies adopted by firms in the sector, and it was conducted by a Mexican interinstitutional research group called GIDI (2020).  In-deep interviews with first-tier suppliers endorse these two surveys' results with key players' actions and perceptions in the Mexican auto industry.

Video

  GIS Gerpisa / gerpisa.org
  4 Avenue des Sciences, 91190 Gif-sur-Yvette

Copyright© Gerpisa
Concéption Tommaso Pardi
Administration Juan Sebastian Carbonell, Lorenza MonacoGéry Deffontaines

Créé avec l'aide de Drupal, un système de gestion de contenu "opensource"
randomness