Title:
Effect of Investment in Fourth Industrial Revolution (4IR) Technologies on Cost of Production and Sales Revenue of Manufacturing Industries in Tanzania

Authors:
Heriel Emanuel Nguvava, Tanzania

Abstract:

The study assessed effect of investment in 4IR technologies on production costs and sales revenue of manufacturing industries in Tanzania. Specifically, the study set out to establish causality of investment in 4IR technologies on manufacturing industries’ costs of production and sales revenue. 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 the Least Square method to analyze the objectives of the study. The study found a statistically significant causal effect between investment in 4IR technology, manufacturing firms cost of production and sales revenue whereby, when manufacturing firms increase investment in 4IR technologies by 1 unit, the production cost of such firms rose by 1.08 units while the corresponding sales revenue rose by 5.96 units hence the benefits of technological investment outweigh the cost. Implicitly, the emergence of 4IR does not occasion a decline in production due to increase in costs of manufacturing firms in developing countries endowed with resources like Tanzania, but rather complements and accelerates growth. 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 not only resource-based industries, but also technological based industries, to 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, importation, adoption and imitation of 4IR technologies from developed countries that lead to enhanced productivity and revenue generation in Tanzania manufacturing sector. Despite the fact that government and institutions in Tanzania are not fully prepared and equipped in terms of technology supportive infrastructures, policies, strategies and technology governance quality, manufacturing firms should keep investing in industry 4.0 technologies since the benefits obtained outweigh the cost.

DOI: https://doi.org/10.51505/IJEBMR.2024.81116