Technical change is a critical factor for the performance of contemporary economies. Formulation of effective policy solutions requires an in-depth analysis of the dynamics of innovation processes, their determinants and their impacts. Industry 4.0 is part of a process of long-term structural change, which acquiring the connotations of a 4th Industrial Revolution. Its potential is due to the convergence of pre-existing and rapidly emerging technologies, such as the Internet of Things, Big Data and Industrial Analytics, Cloud Manufacturing, Advanced Robotics and Advanced Human-Machine Interfaces, Artificial Intelligence and Additive Manufacturing. We analyze the combined causes and effects of these technologies on investments, industrial organization and employment.