The key enablers of SMEs readiness in Industry 4.0: a case of Malaysia

Abstract

PurposeThe study sheds light on the internal enabling factors towards emerging market (EM) small and medium-sized enterprises’ (SMEs) preparedness for Industry 4.0 (I4.0) using three dimensions: managerial, operational and technological readiness.Design/methodology/approachThe study uses convenience sampling, having online and paper-based surveys and collecting 110 responses from manufacturing Malaysian SMEs. This sample allowed assessing the relationships of the hypothesized variables through the structural model of data analysis.FindingsThis study’s findings demonstrate that financial capability and perceived benefits enhance Malaysian SMEs' managerial, operational and technological readiness.Research limitations/implicationsUsing Malaysia's case, this paper extends the discussion of the key drivers that underline the decision of EM firms to adopt I4.0.Practical implicationsThis study’s results provide valuable insights for policymakers to improve the digital ecosystem. Also, understanding critical drivers for I4.0 readiness would encourage SMEs in Malaysia to embrace new digital technologies.Originality/valueAlthough digital transformation towards I4.0 for manufacturing SMEs would be decisive, little is known about how ready these Malaysian firms are to adopt it or the driving factors that motivate them. Meanwhile, inadequate readiness causes a high failure rate in implementing new technology, processes or organizational changes.