Identifying the driving and moderating factors of Malaysian SMEs’ readiness for Industry 4.0

ABSTRACT

Despite the growing importance of SMEs’ readiness for Industry 4.0 (I4.0) to successful digital transformation, limited empirical studies have investigated the factors contributing to the I4.0 readiness of manufacturing SMEs. To fill this gap, this study examines the effect of organisational capabilities, perceived advantages, and market pressure on I4.0 readiness, the moderating effect of financial support, and SMEs’ readiness for I4.0 in Malaysia. This research contributes theoretically by extending the Unified Theory of Acceptance and Use of Technology and integrating it with the Resource-Based View and Dynamic Capability Theory to develop an SME-centric model for I4.0 readiness. Structural Equation Modelling from the Partial Least approach was performed to test the model by drawing on data from 110 manufacturing SMEs in Malaysia. Practically, the findings are instrumental in helping SMEs prepare for digital transformation. Policymakers may use the findings as a tool to identify where to prioritise efforts to accelerate SMEs’ readiness for I4.0.

KEYWORDS:

• Technology management
• advanced manufacturing processes
• Industry 4.0
• digitalisation
• readiness
• capabilities
• perceived advantages
• market pressure
• financial support

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

This work was supported by the Malaysian Technology Development Corporation [304/ PMGT/ 650994/ M130].