Conceptualizing the industry 4.0 adaptation for small and medium-sized enterprises & performance

Abstract

Information technology (IT), electronics, and digitalization have all contributed significantly to the emergence of the third Industrial Revolution. These innovations have paved the way for transformative technologies like the Internet of Things (IoT), Cyber Physical Systems (CPS), and the Internet of Services (IoS). Together, these elements constitute the foundation of Smart Factory, and they play a pivotal role in shaping the emergence of Industry 4.0. Industry 4.0 has a major influence on the industrial sector in industrialised countries, mostly by large firms. But, Small and medium sized enterprises (SMEs) find it challenging to replicate the same achievements. This paper explores the influence of emerging digital technology in Industry 4.0 on various factors that affect the adaptation of SMEs’ organisational processes. Furthermore, developed a model to assess the organisation’s performance, considering the mediating impact of the maturity score and the moderating influence of the industry type of the SME. The resource base view (RBV) theory and contingency theory are employed to develop the conceptual frame, and the maturity model is used to find the industry 4.0 maturity score. The paper makes an academic contribution by providing valuable insights to support future research on SMEs’ transition towards digitalised processes and its impact on organisational performance.