Artificial intelligence and automation are becoming key factors in redefining industrial competitiveness in the era of Industry 4.0. They have brought significant changes to the functioning of the industry, enabling the optimization of production processes, increased efficiency, and the development of innovative solutions. By integrating technologies such as the Internet of Things, automated systems, machine learning, and robotics, industrial production becomes more flexible, adaptable, and competitive in the global market. Smart factories integrate automated structures and incorporate digital technologies that allow for resource optimization, cost reduction, and improved product quality, thereby enhancing companies' competitiveness on a global scale. The Fourth Industrial Revolution offers the Republic of Serbia the opportunity to adopt the latest innovations and catch up with the world's developed countries. The realization of Serbia’s strategic industrial development goals should be based on advanced manufacturing and high-value-added services, leveraging the achievements of Industry 4.0. The authors analyze the role of artificial intelligence and automation in improving industrial production, with a particular focus on enhancing industrial competitiveness. Furthermore, part of the paper is dedicated to Serbia’s new industrial policy, which emphasizes investments in innovation, digitalization, automation, and infrastructure to create an internationally competitive economy capable of succeeding in the new global market landscape.

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