Adoption of fourth industrial revolution 4.0 among Malaysian small and medium enterprises (SMEs)

Abstract

Using Industrial Revolution 4.0 (IR4.0) technology, companies can upscale their innovation in organizing, managing, and controlling the value chain life cycle. IR4.0 is anticipated to bring challenges and opportunities to developing economies such as Malaysia, but due to its novelty to the Malaysian business community, the concept still needs clarity in its definition for proper understanding and business practice. This paper aims to examine the impact of IR4.0 adoption on Malaysian small and medium enterprises (SMEs) by analyzing the organizational readiness, relative advantage, compatibility, top management support, government regulation, and competitive pressure, and its relationship with the adoption of IR4.0 to Malaysian SMEs. This study framework is based on the diffusion of innovation theory (DOI) and technology–organization–environment (TOE) framework. The study results verified the importance of relative advantage, compatibility, competitive pressure, and top management support as significant predictors of IR4.0 adoption. The study is expected to benefit regulators and business ecosystems in understanding the challenges in implementing IR4.0 in Malaysia and formulating intervention processes and programs for successful IR4.0 adoption.