Territorial relations of manufacturing industry and Industry 4.0 technologies in Hungary at the beginning of the fourth industrial revolution

Over the last decade, but especially in recent years, Hungarian industry has faced numerous challenges, one of the most important being the spread of Industry 4.0 technologies. This phenomena is influenced by various factors, according to the literature, and is explored in this study from the perspective of evolutionary economic geography. The investigation delves into the connections between the spatial concentration of manufacturing sectors with varying technology intensities and the spatial distribution of Industry 4.0 technologies at the beginning of the fourth industrial revolution. Using various databases and indicators related to digital infrastructure, social development and economic progress, we carried out correlation and cluster analysis at the county level. We found that the use of I4.0 technologies, and thus digitalisation, is notably more advanced in regions where sectors with high and medium -high technological intensity are concentrated. During the period between 2014 and 2019, considered as the initial phase of the 4IF, the predominant trend was the concentration of sectors with a lower technological level in the Hungarian manufacturing industry. This trend poses challenges to the widespread incorporation of digital technologies. This process was not only evident in industry trends but also manifested spatially. A comparison of county clusters in 2014 and 2019 revealed that the majority of the counties retained their former cluster positions, while three counties shifted to a group with worse indicator values, and one to a group with better ones. Consequently, the sectoral structure of the manufacturing industry witnessed stagnation rather than progress. The geographical distribution of Industry 4.0 technologies strongly reflects and reinforces the digital divide between the northern and southern parts of the country. In the northern region, characterised by a more developed and significant industry, the presence of new technologies is more frequent. No significant changes to this spatial pattern can be expected in the future either, mainly because most of the new industrial investments that have been made in recent years are also connected to the northern part of the country. Therefore, significant progress in the application of Industry 4.0 technologies is anticipated in these areas in the coming years. Overall, this study contributes to the discourse on evolutionary economic geography, addressing the question of whether path dependence governs the evolution of the sectoral structure of the Hungarian manufacturing industry. It also explores whether the spread of Industry 4.0 technologies during the early stages of the fourth industrial revolution will impede the development of Hungarian counties.