Technology and industry 4.0 adoption in small and medium enterprises: The mediating role of readiness

Industry 4.0 is a major phenomenon in the industrial sector. Its benefits in terms of business processes and sustainability have attracted a great deal of attention from industry players, prompting them to explore this new paradigm. However, SMEs in particular face notable challenges when adopting Industry 4.0. Therefore, SMEs should evaluate their readiness for Industry 4.0 adoption prior to incorporating these advanced technologies into their operations. This study, henceforth, examined the mediating role of Industry 4.0 readiness in the relationship between technology and Industry 4.0 adoption. A quantitative approach was adopted for this study. 157 management personnel from Malaysian manufacturing SMEs completed the questionnaire survey and the data were analysed utilising the partial least squares structural equation modelling (PLS-SEM) approach. The study's findings indicate that technology positively affects Industry 4.0 adoption and Industry 4.0 readiness, with readiness serving as a mediating factor in the relationship between technology and Industry 4.0 adoption among Malaysian manufacturing SMEs. It signifies that technology enhances the implementation of Industry 4.0 in Malaysian manufacturing SMEs. Furthermore, the Industry 4.0 readiness of these SMEs to embrace Industry 4.0 acts as a mediator that explains the link between technology and Industry 4.0 adoption. Technology favourably impacts the adoption of Industry 4.0, whereas Industry 4.0 readiness acts as a mediating variable for Malaysian manufacturing SMEs.