Industry 4.0 and SME Development

Abstract

Globalization, market turbulence, and global crisis such as the COVID-19 pandemic push the manufacturing industry to rush towards automation, data-centricity, and greater interconnectivity under the ongoing digital industrial transformation known as Industry 4.0. Smaller manufactures worldwide strive to keep up with the digitalization race and secure sustainable competitiveness. Fierce competition and market turbulence force Middle Eastern manufacturers to make the most of the digitalization race. The present study reports on the Industry 4.0 digital transformation and development of small and medium-sized manufacturing enterprises in Iran, one of the most economically influential countries within the Middle East. Smaller manufacturers in Iran consider Industry 4.0 to improve productivity, operate in the data-driven economy, and increase business resilience. Although the implementation rate of generic digital technologies has been somewhat promising among Iranian manufacturers, the present report identifies significant barriers slowing the implementation rate of more advanced Industry 4.0 technologies such as predictive analytics and blockchain technology. Overall, Industry 4.0 transformation has provided Iranian manufacturing enterprises with meaningful opportunities and benefits. Nonetheless, smaller manufacturers cannot generally develop an all-inclusive strategic plan for navigating digitalization efforts. This issue, along with many other barriers such as resource scarcity, digitalization immaturity, and cybersecurity risks, has slowed down the digital transformation of the Iranian manufacturing industry.