Transnational Corporations and Fordism in the Digital Era: A Theoretical Explanation and Prediction

In the 1920s, innovation, especially assembly line production, led to a new type of corporations and a new form of capitalism that ushered in the age of mass production and mass consumption: Fordism. Digitalisation is again bringing about a radical change in capitalism and the Fordist production structure. Not only has digitalization created an entire new industry, but it is also fundamentally changing the production of classic Fordist industries such as the automotive sector. The Internet of Things, Big Data and artificial intelligence are revolutionising production processes and business models. The more efficient work and production processes generate productivity and welfare gains and promising growth opportunities for the future. However, the flip side of this development is accompanied by an increasingly unequal distribution of these gains. Despite the productivity gains, social inequality is rising in many industrialised countries, increasing the pressured on the welfare and social state through rising debt. This paper provides a theoretical explanation and prediction into how the ongoing digitalisation affects capitalism and what can be expected from this development for the future. The starting point of our consideration is the technological innovation in the course of the digital revolution changes on dominant structure of companies, which is discussed in the first part. In the second part, the consequences of this fourth industrial revolution for the macroeconomic and societal level, in particular the distribution of income, are examined.