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Drivers and barriers of Industry 4.0 technology adoption among

manufacturing SMEs: a systematic review and transformation roadmap

Article in Journal of Manufacturing Technology Management · April 2022

DOI: 10.1108/JMTM-12-2021-0505

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Drivers and barriers of Industry Drivers and

barriers of
4.0 technology adoption among Industry 4.0
adoption
manufacturing SMEs: a systematic
review and
transformation roadmap Received 16 December 2021
Revised 15 February 2022
18 March 2022
Morteza Ghobakhloo Accepted 29 March 2022
School of Economics and Business, Kaunas University of Technology,
Kaunas, Lithuania and
Graduate School of Business, Universiti Sains Malaysia, Penang 11800, Malaysia
Mohammad Iranmanesh
School of Business and Law, Edith Cowan University, Perth, Australia
Mantas Vilkas and Andrius Grybauskas
School of Economics and Business, Kaunas University of Technology,
Kaunas, Lithuania, and
Azlan Amran
Graduate School of Business, Universiti Sains Malaysia, Penang 11800, Malaysia

Abstract
Purpose – The present study offers a holistic but detailed understanding of the factors that might affect small
and medium-sized enterprises (SMEs) adoption of Industry 4.0 technologies to empower smaller businesses to
embrace Industry 4.0.
Design/methodology/approach – The study conducted a systematic review of the literature and drew on
the technology-organization-environment framework to identify various technological, organizational and
environmental determinants of Industry 4.0 technology adoption and their underlying components. The study
applied the textual narrative synthesis to extract findings from the eligible articles and interpret them into the
Industry 4.0 technology adoption roadmap.
Findings – Industry 4.0 is a vital strategic option to SMEs, enabling them to keep up with the digitalization race.
SMEs significantly lag behind large organizations in benefiting from disruptive Industry 4.0 technologies. SMEs
are still struggling with the initial adoption decisions regarding the digital transformation under Industry 4.0.
Results identified various determinants that might explain this condition. The study developed a digitalization
roadmap that describes the necessary conditions for facilitating SMEs’ digitalization under Industry 4.0.
Practical implications – Various technological, organizational and environmental factors might determine
the current positioning of SMEs against Industry 4.0. These determinants can act as barriers or drivers
depending on their properties. The roadmap describes determinants indispensable to promoting Industry 4.0
technology adoption among SMEs, such as knowledge competencies or value chain digitalization readiness.
Originality/value – Exclusively focusing on empirical research that reported applied insights into Industry
4.0 technology adoption, the study offers unique implications for promoting Industry 4.0 digital transformation
among SMEs.
Keywords Information technology, Digitization, Technological innovation, Technology implementation,
Small and medium sized enterprises, Industry 4.0
Paper type Literature review

Journal of Manufacturing
This research has been a part of a project that has received funding from European Regional Technology Management
Development Fund (project No 01.2.2-LMT-K-718-05-0090) under grant agreement with the Research © Emerald Publishing Limited
1741-038X
Council of Lithuania (LMTLT). Funded as European Union’s measure in response to Cov-19 pandemic. DOI 10.1108/JMTM-12-2021-0505
JMTM 1. Introduction
Despite the widely acknowledged benefits that Industry 4.0 offers to businesses, such as
greater productivity, not all organizations have been able to successfully transform their
business operations under this phenomenon (M€ uller et al., 2018). The academic and industrial
reports have highlighted a worryingly slower rate of Industry 4.0 digitalization for SMEs
across both developed and developing regions (Horvath and Szabo, 2019). As a result, an
increasing number of studies have addressed the issue of Industry 4.0 technology adoption
among SMEs. Thus, previous studies have employed diverse perspectives in studying the
factors that impact the process of Industry 4.0 technology adoption within SMEs. Maisiri et al.
(2021) took a sociopolitical perspective to study the determinants of sustainable adoption of
Industry 4.0. Buer et al. (2021) employed cross-sectional surveys to understand what inter- or
intra-organizational factors impact SMEs’ Industry 4.0 adoption decision processes.
Ghobakhloo and Fathi (2020) analyzed this phenomenon by conducting longitudinal case
studies of the entire cycle of Industry 4.0 technology adoption within SMEs from the initial
adoption decision phase to the physical technology implementation and exploitation stages.
Nonetheless, there is a significant need for state-of-the-art research to unify the diverse
perspectives of earlier research on the SME adoption of Industry 4.0 technologies, holistically
explaining the mechanism through which SMEs approach Industry 4.0 and decide on the
adoption and implementation of underlying technologies. The lack of a shared understanding
of factors that determine the adoption of Industry 4.0 technologies might, to some extent,
explain SMEs’ reluctance toward digital transformation under Industry 4.0 (Ghobakhloo and
Iranmanesh, 2021). SMEs are generally risk-averse, mainly because of their widely
acknowledged limitations, such as resource scarcity and lack of expertise (Benitez et al.,
2020; Prause, 2019). Therefore, SMEs tend to exacerbate bias toward avoiding digitalization
when they struggle to understand the drivers and barriers of Industry 4.0 technology and the
way they function (Ingaldi and Ulewicz, 2020). Keeping the complexity and dynamism of the
Industry 4.0 phenomenon in mind, this knowledge gap undermines the facilitating and
supporting role of external factors such as governments in enabling and expediting the
digital transformation of SMEs under the Industry 4.0 agenda (Kumar et al., 2020).
To address this knowledge gap, the present study conducts a systematic review of the
literature to address the diverse perspectives on determinants of Industry 4.0 technology
adoption within smaller businesses. In doing so, the study identifies the existing scholarly
literature on this topic and further scrutinizes the existing findings to offer a unified yet holistic
understanding of the factors that might affect the way SMEs decide on and implement
underlying technologies of Industry 4.0. While some recent studies offer a review of the digital
technology adoption phenomenon among SMEs (e.g. Ramdani et al., 2021), the present study
may stand out by merely reviewing empirical studies that offer practical insights into the factors
that have positively or negatively impacted the SMEs’ decision for Industry 4.0 technology
adoption. Consistently, the study draws on the technology-organization-environment (TOE)
framework to systematically categorize and review technological, organizational and
environmental factors that might impact SMEs’ behavior in adopting Industry 4.0
technologies. The study further draws on the findings and develops an Industry 4.0 adoption
roadmap to facilitate the SMEs’ adoption of Industry 4.0 technological constituents. Consistently,
the study fulfills the above objectives by addressing the following research questions.
(1) What technological constituents of Industry 4.0 have been implemented within
SMEs, and to what extent?
(2) What are the key technological, organizational and environmental determinants of
Industry 4.0 technology adoption among SMEs?
(3) How can SMEs be empowered to pursue digitalization under the Industry 4.0 agenda?
This research is believed to enable SME managers, scholars, practitioners and political Drivers and
decision-makers to have a holistic but detailed overview of the determinants of Industry 4.0 barriers of
technology adoption and the way they might function as drivers or barriers toward the
digitalization of SMEs.
Industry 4.0
adoption
2. Theoretical background
The study draws on the TOE framework as a theoretical basis to explain the institutionalization
of Industry 4.0 technologies among SMEs and further develop a structured classification of
adoption determinants. TOE framework, first introduced by Tornatzky and Fleischer (1990), is
an organization-level theoretical framework that explains how a firm’s technological,
organizational and environmental contexts determine the adoption and implementation of
technological innovations (Masood and Egger, 2019). TOE framework has been one of the most
widely used theoretical bases for explaining the adoption of information and digital technologies
(IDTs), such as the adoption or diffusion of artificial intelligence (AI)-based industrial robots (Pillai
et al., 2021), big data analytics (Babu et al., 2021) and cloud computing (Oliveira et al., 2014).
Under TOE, the technological context entails technological innovations relevant to a firm,
including the technologies available within the market (Rahman et al., 2020). Therefore, the
technical determinants relating to the Industry 4.0 technologies available within the market
that can be purchased and implemented by SMEs will be categorized under the technological
determinants of Industry 4.0 adoption. The organizational context denotes the intra-
organizational and resource-based characteristics of the firm, such as the particularities of
human resources, firm size or existing communication structure (Babu et al., 2021).
Consistently, determinants that root in organizational characteristics of SMEs will be
classified under the organizational determinants of Industry 4.0 adoption. The environmental
context refers to the external circumstances that might affect the technology adoption of the
firm (Masood and Egger, 2019). Accordingly, determinants relating to the SMEs’ business
environment, such as the industry structure or external stakeholders, will be placed under the
environmental determinants of Industry 4.0 adoption.

3. Research methodology
The study conducted a systematic literature review (SLR) to fulfill the research objectives.
Following the standard and widely accepted methods of conducting an SLR, such as PRISMA
protocol (PRISMA, 2021) and Xiao and Watson’s (2019) guidelines, performing SLR in this
study involves defining the following four steps.
3.1 Resource identification
The search scheme listed in Figure 1 was performed within the advanced search section of the
Scopus database. This step was complemented by an advanced search attempt within the
Web of Science database that used similar keywords. The resource selection and underlying
advanced search attempts were conducted in June 2021. The advanced search attempts
applied no specific restrictions in the subject area, publication year or publication region. The
search attempts collectively identified 981 unique documents.
3.2 Resource selection principles
Figure 1 also describes the exclusion criteria based on which the final pool of eligible
documents for the systematic review have been identified within the study. Since the study is
concerned with identifying the determinants of adoption of Industry 4.0 technologies in the
real-world scenario and aims to develop a roadmap that can guide SMEs to manage their
Industry 4.0 transformation processes effectively, eligible articles were restricted to empirical
research that reported applied insights. More importantly, the exclusion criteria ensured that
shortlisted articles specifically address SMEs’ adoption of Industry 4.0 technologies.
JMTM Using the ( TITLE-ABS-KEY ( "4th Industrial revolution" ) OR TITLE-ABS-KEY ( "Industry
4.0" ) OR TITLE-ABS-KEY ( "Industrie 4.0" ) OR TITLE-ABS-KEY ( "Fourth industrial

R esource identification
revolution" ) OR TITLE-ABS-KEY ( "Smart manufacturing" ) OR TITLE-ABS-KEY ( "Smart
factory" ) AND TITLE-ABS-KEY ( Technology ) OR TITLE-ABS-KEY ( Technologies ) OR
TITLE-ABS-KEY ( Adoption ) OR TITLE-ABS-KEY ( Implementation ) AND TITLE-ABS-
KEY ( SME ) OR TITLE-ABS-KEY ( Small ) ) search string for identifying the initial pool of
articles within the Scopus and Web of Science databases.

Number of unique documents identified using the search string:

N = 981

Exclusion 1: The document is not cataloged as an article (e.g., conference proceedings, book
(eligibility) principles

chapters, editorial notes).

R esource selection

Exclusion 2: English is not the medium of communication in an article and its main body of text.
Exclusion 3: The scientific journal that has published an article is not indexed in the Clarivate
Analytics Science Citation Index® or Social Sciences Citation Index®.
Exclusion 4: An article merely cites the search keywords and offers no insights into determinants
of adoption of Industry 4.0 technologies among SMEs.
Exclusion 5: An article is not categorized as empirical research (e.g., review articles, theoretical
studies)

n = 6125
Documents removed due to exclusion criterion
Total number of articles due to exclusion
S creening of documents identified

Articles removed due to exclusion criterionn 2= 17

Articles removed due to exclusion criterionn 3= 78

criteria N = 944

Articles removed due to exclusion criterionn 4= 173

Articles removed due to exclusion criterionn5= 51

The pool of eligible journal articles N = 37

Content analysis

Manual textual narrative synthesis-based content analysis of eligible articles by two independent
Figure 1. content assessors for discovering patterns of implementation of Industry 4.0 technologies as well
Resource selection as identifying the determinants of adoption of Industry 4.0 technologies among SMEs.
procedure

3.3 Resource screening

As explained in Figure 1, 625 documents were not identified as articles, thus removed under
exclusion criterion 1. Of the remaining articles, 17 were removed since they did not have their
main body of text written in English. Under exclusion criterion 3, 78 articles published in
journals not indexed in the Clarivate Analytics Science Citation Index or Social Sciences
Citation Index were further removed from the pool of eligible articles. 173 articles were
observed to provide no insights into determinants of adoption of Industry 4.0 technologies by
SMEs; thus, they were removed under the exclusion criterion 4. Finally, and under exclusion
criterion 5, 51 articles not identified as empirical research were removed from the pool of
eligible documents. As a result, 37 research articles were shortlisted for the textual narrative
synthesis-based content analysis.
3.4 Content analysis Drivers and
The study followed Popay et al. (2006) and applied the textual narrative synthesis method to barriers of
synthesize, extract and interpret findings from the eligible articles. The research team
developed and executed a comprehensive narrative synthesis framework to standardize the
Industry 4.0
review and synthesis processes, diminish the assessor bias threat and ensure the validity and adoption
reliability of findings. The narrative synthesis framework outlined detailed descriptions of
necessary techniques and steps such as the coding technique, data tabulation and
transformation rules, grouping and clustering methods, denoising procedure, data
management processes, and cooperative document reexaminations to track possible
disagreements. The synthesis processes were executed in duplicate using two independent
content assessors to minimize single assessor bias. After the initial synthesis, the assessors
collaboratively reexamined the findings and reached a shared consensus while answering the
research questions of the study. These steps were complemented by relational analysis,
where the research team used the cognitive mapping technique to develop the roadmap.

4. Data analysis and results

The results of the present SLR are presented in the following order. The data analysis in
Section 4.1 offers an overview of the adoption behavior of Industry 4.0 technologies among
SMEs, addressing research question one. Sections 4.2, 4.3 and 4.4, respectively, address
research question two by reviewing and describing the technological, organizational and
environmental determinants of Industry 4.0 technology adoption among SMEs, as identified
by eligible articles.

4.1 Industry 4.0 technologies among SMEs

Industry 4.0 is technology-driven, representing a digital revolution pushed by technological
innovations such as the Internet of things (IoT) (Kipper et al., 2020). Table 1 explains how eligible
articles perceive the technological constituents of Industry 4.0. Figure 2 sorts the Industry 4.0
technologies based on the frequency of acknowledgment recorded in Table 1. As expected, big
data, IoT, cloud computing, additive manufacturing and cyber-physical system (CPS) have been
the most recognized technological constituents of Industry 4.0 among SMEs (Arcidiacono et al.,
2019; Khanzode et al., 2021). Nonetheless, Industry 4.0 technologies expand beyond the
emerging technological innovations, involving many legacy systems and technologies such as
the control systems, which provide front-end Industry 4.0 technologies with the necessary
connectivity and intelligence to function (Benitez et al., 2020: Masood and Sonntag, 2020).
The literature offers varying classifications of Industry 4.0 technologies among SMEs. For
example, Ghobakhloo and Ching (2019) clustered Industry 4.0 technologies into first-tier and
second-tier technologies. First-tier technologies are off-the-shelf technological products, such
as 3D printers, that SMEs can purchase and implement on a standalone basis. Industrial IoT
(IIoT) and CPS, as the second-tier Industry 4.0 technologies, are the byproduct of implementing
and integrating several first-tier technologies such as data acquisition systems or machine
learning. Agostini and Nosella (2020) differentiated advanced manufacturing technologies
(AMTs) from Industry 4.0 technologies and explained that AMTs are prerequisites to the
adoption of Industry 4.0 technologies by SMEs. Bosman et al. (2019) proposed four clusters of
Industry 4.0 technologies for SMEs: computer-aided design and engineering, digital factory
floor, enterprise support operations and supply chain data exchange technology.
Regardless of the technological classifications proposed by existing studies, the literature
widely acknowledges that the adoption rate of Industry 4.0 technologies has been worryingly
low among SMEs. Pech and Vrchota (2020) studied the Industry 4.0 implementation levels of
Czech SMEs and revealed that although most SMEs surveyed benefited from generic IDT,
JMTM
Studies Industry 4.0 technologies

Additive manufacturing
Agostini and Nosella
(2020)
Ali et al. (2021)
Arcidiacono et al. (2019)
Benitez et al. (2020)
Benitez et al. (2021)
Bosman et al. (2020)
Buer et al. (2021)
Chatterjee et al. (2021)
Chen (2020)
Cimini et al. (2021)
Garzoni et al. (2020)
Ghobakhloo and Ng
(2019)
Ghobakhloo and Fathi
(2020)
Ghobakhloo and
Iranmanesh (2021)
Hopkins (2021)
Horváth and Szabó (2019)
Huang et al. (2019)
Ingaldi and Ulewicz
(2020)
Khanzode et al. (2021)
Konur et al. (2021)
Kumar et al. (2020)
Maisiri et al. (2021)
Masood and Sonntag
(2020)
Michna and Kmieciak
(2020)
Mittal et al. (2020)
Moeuf et al. (2020)
Müller et al. (2018)
Pech and Vrchota (2020)
Prause (2019)
Ratnasingam et al. (2020)
Rauch et al. (2019)
Somohano-Rodríguez et
al. (2020)
Table 1. Stentoft et al. (2021)
Stentoft et al. (2020)
Industry 4.0 Türkeş et al. (2019)
technologies van Lopik et al. (2020)
Won and Park (2020)
among SMEs
Advanced (smart) materials
Artificial intelligence (AI)
Augmented reality
Automatic guided vehicle (AGV)/Drones
Automation and industrial robotics
Big data analytics
Blockchain technology
Cloud data and computing
Computer-aided design (CAD)
Computer-aided manufacturing (CAM)
Cyber-Physical Systems (CPS/CPPS)
Cybersecurity technologies
Data acquisition systems (e.g., sensors)
Decision support system (DSS)
Digital product lifecycle management
Digital twin technology
Embedded system
Enterprise resource planning (ERP)
Industrial control systems (PLS, SCADA, …)
Industrial energy management systems
Internet of Things (IoT/IIoT)
Machine learning
Machine to Machine (M2M) technologies
Machine vision
Manufacturing Execution System (MES)
Products identification (e.g., RFID, RTLS)
Simulation
Virtual reality
Wireless sensor networks (WSNs)
x x x x x x x
x
x x x x x
x x x x x x x x x x x x
x x x x x x x x x x
x x x
x x x x
x
x x x x x x
x x x x x x x x
x x x x x
x x x x x x x x x x x x x
x x x x x x
x x x x x x x x x x x x x
x x x x x x x x x
x x x x x x
x x x x x x x
x x x x x x
x x x x
x x x x x x x
x x x x x x x
x x x
x x x x x x x x x x x x x x x x x x
x x x
x x x x x x x
x x x x x x x x x
x x x x x
x x x x x x
x x x x x
x x x x x x x x x x
x x x x x
x x x x x x x
x x x x x x x x x x
x
x x x x x x x x x x
x
x x x x x x

the implementation rate of modern Industry 4.0 technologies has been considerably low
across various SME clusters. For example, Pech and Vrchota (2020) reported an
implementation rate of less than 20% for 3D printers, virtual reality or autonomous
vehicle technologies among high-tech Czech SMEs. Previous studies reported a similar
Industry 4.0 technology implementation pattern for Malaysian SMEs, revealing that these
businesses are more inclined to adopt enabling digital and operations technologies such as
industrial actuators and sensors while avoiding disruptive Industry 4.0 technologies such as
blockchain (e.g. Ratnasingam et al., 2020). Similarly, the literature reported a low adoption
rate of Industry 4.0 technologies among European SMEs (Agostini and Nosella, 2020), South
Korean manufacturing SMEs (Won and Park, 2020) and Norwegian manufacturing SMEs
(Buer et al., 2021). For Australian businesses, Hopkins (2021) reported a significantly lower
adoption rate of Industry 4.0 technologies for small enterprises compared to larger
businesses. This observation is somewhat expected, given that scholars widely believe that
most SMEs are stuck at the initial adoption decision state and are yet to proceed with the
 Big data analytics
Drivers and
67.57%
Internet of Things (IoT/IIoT) 64.86%
barriers of
Cloud data and computing 54.05%
Industry 4.0
Automation and industrial robotics 54.05% adoption
Additive manufacturing 45.95%
Cyber-Physical Systems (CPS/CPPS) 40.54%
Augmented reality 40.54%
Artificial intelligence (AI) 32.43%
Virtual reality 27.03%
Cybersecurity technolgoies 27.03%
Simulation 24.32%
Data acquisition systems (e.g., sensros) 21.62%
Products identification (e.g., RFID, RTLS) 18.92%
Enterprise resource planning (ERP) 16.22%
Computer-aided manufacturing (CAM) 16.22%
Computer-aided design (CAD) 16.22%
Manufacturing Execution System (MES) 13.51%
Blockchain technology 13.51%
Industrial control systems (PLS, SCADA,…) 10.81%
Machine vision 8.11%
Machine to Machine (M2M) technologies 8.11%
Machine learning 8.11%
Industrial energy management systems 8.11%
Embedded system 5.41%
Digital twin technology 5.41%
Automatic guided vehicle (AGV)/Drones 5.41%
Wireless sensor networks (WSNs) 2.70% Figure 2.
Digital product lifecycle management 2.70% Frequency of mention
of Industry 4.0
Decision support system (DSS) 2.70% technologies within
Advanced (smart) materials 2.70% SME literature

physical implementation of modern Industry 4.0 technologies (Chatterjee et al., 2021; Maisiri
et al., 2021; Michna and Kmieciak, 2020). Experts argue that many factors have contributed to
the global low adoption rate of Industry 4.0 technologies within SMEs. The following sections
comprehensively discuss the root causes for such low adoption rates.

4.2 Technological determinants

The content analysis of eligible articles identified eight clusters of technological factors that
determine the adoption of Industry 4.0 technologies among SMEs. Previous studies have
meticulously described the particularities of these clusters based on which the subcategories
of the eight clusters of technological determinants have been developed as Figure 3. Table 2
explains how eligible articles have recognized these technological factors as either drivers or
barriers for Industry 4.0 technology adoption. Overall, a specific determinant classifies as a
driver when it functions favorably toward the adoption of Industry 4.0 technologies.
Conversely, it classifies as a barrier when functioning unfavorably toward the adoption.
Among the eight technological determinants, the costs and benefits of Industry 4.0
technologies are the most recognized determinants. Scholars believe that SMEs still struggle
JMTM Determinant cluster
Compatibility of Industry
4.0 technologies
Complexity of Industry Data volume, management, and
4.0 technologies
Te ch n ological de term ina nts o f In d us try 4 .0 tec hn olog y a do ption
Determinants Sub-determinants
Lack of standardization of
industrial communication
protocols
Data integration
Data complexity

processing constraints
Hardware integration with legacy
systems
Cost of hardware
and equipment
Initial investment costs Cost of software
Costs of Industry 4.0 packages
technologies Cost of training
Upkeep and maintenance costs
Cost of expertise and
Data ownership issues consultation
Cybersecurity risks of Device hacking
Industry 4.0 technologies Risk for information security
Vulnerability exploitation

Investment risks of
Risks of return on investment
Industry 4.0 technologies
Standardized deϐinition of real- Higher product quality
Real-time data exchange time Reduced defect rate
capability of Industry 4.0 Platform capability for real-time Reduced rework
technologies data collection and management Reduced waste
Lower work-in-progress
Enhanced efϐiciency of industrial
operations Cost reduction
Perceived strategic Higher proϐitability
Improved ϐinancial performance Improve time-to-market
beneϐits of Industry 4.0 of products
technologies Improved marketing performance Improved business and
Enhanced reliability of industrial market forecasting
operations Higher market growth
Figure 3. Higher equipment
Technological reliability
determinants of
Industry 4.0 User-friendly human-machine
technology adoption

with financing the direct and indirect costs of Industry 4.0 technology acquisition (Kumar
et al., 2020), despite some arguing that Industry 4.0 technologies have recently become more
affordable and accessible to SMEs (Rauch et al., 2019). Direct costs include expenses that
firms need to initially incur at the beginning of the technology acquisition project, such as
costs of hardware, software and underlying systems (Benitez et al., 2020). Indirect costs are
the general technology upkeeping expenses that firms must repeatedly endure to keep the
technology operating, including consultation, ongoing training and maintenance costs (Ali
et al., 2021; Kumar et al., 2020). Overall, 21.62% of eligible articles classify this determinant as
a barrier, arguing that Industry 4.0 technologies are costly and SMEs struggle with affording
them. Alternatively, 2.70% of articles argued that the costs of Industry 4.0 technologies had
dropped significantly as of late, and because of the affordability of these technologies, costs
can function as a driver (Rauch et al., 2019).
Alternatively, the perceived strategic benefits of Industry 4.0 technologies, such as
improved process efficiency or reduced operational costs, drive SMEs toward favorable
 Technological determinants
Perceived Real-time data
Investment strategic exchange User-
Compatibility of Complexity of Costs of Cybersecurity risks of benefits of capability of friendliness of
industry 4.0 industry 4.0 industry 4.0 risks of industry industry 4.0 industry 4.0 industry 4.0 industry 4.0
Studies technologies technologies technologies 4.0 technologies technologies technologies technologies technologies

Ali et al. (2021) Barrier Barrier Driver

Benitez et al. Barrier Barrier Barrier Barrier
(2020)
Chatterjee et al. Driver Driver
(2021)
Garzoni et al. Driver
(2020)
Ghobakhloo Barrier Barrier Driver
and Ching
(2019)
Ghobakhloo Barrier
and Fathi
(2020)
Horvath and Driver
Szabo (2019)
Khanzode et al. Barrier
(2021)
Konur et al. Barrier
(2021)
Kumar et al. Barrier
(2020)
Masood and Barrier
Sonntag (2020)
Prause (2019) Barrier Barrier Barrier Barrier
Ratnasingam Barrier Driver
et al. (2020)

(continued )
adoption
Industry 4.0
Drivers and
barriers of

Technological
Table 2.

determinants
 Table 2.
JMTM
Technological determinants
Perceived Real-time data
Investment strategic exchange User-
Compatibility of Complexity of Costs of Cybersecurity risks of benefits of capability of friendliness of
industry 4.0 industry 4.0 industry 4.0 risks of industry industry 4.0 industry 4.0 industry 4.0 industry 4.0
Studies technologies technologies technologies 4.0 technologies technologies technologies technologies technologies

Rauch et al. Barrier Driver Barrier Driver Driver

(2019)
Stentoft et al. Driver
(2021)
Stentoft et al. Barrier
(2020)
T€urkeş et al. Driver
(2019)
van Lopik et al. Barrier
(2020)
adoption decisions (Garzoni et al., 2020). In particular, scholars such as Chatterjee et al. (2021) Drivers and
and Ghobakhloo and Ching (2019) showed that the perceived value of Industry 4.0 plays a barriers of
more salient driving role when SMEs decide on adopting modern technologies such as AI,
intelligent robotics, or augmented and virtual reality. Results revealed that the benefits of
Industry 4.0
Industry 4.0 adoption for SMEs involve four subcategories of improved operational efficiency adoption
(e.g. reduced defect and product quality), enhanced operational reliability (e.g. higher
equipment reliability), improved financial performance (e.g. reduced cost of manufacturing)
and improved marketing performance (Horvath and Szabo, 2019; Masood and
Sonntag, 2020).
The complexity of Industry 4.0 technologies is the third most recognized technological
determinant. Previous studies acknowledge that the complex, integrative and disjointed
nature of Industry 4.0 technologies is a significant barrier to the widespread adoption and use
of these technologies within SMEs (Rauch et al., 2019). The literature particularly highlights
the negative role of technological complexity in the adoption of augmented reality (van Lopik
et al., 2020) and blockchain (Ali et al., 2021). The complexity of Industry 4.0 technologies for
SMEs includes four underlying challenges of data integration, complexity, data management
and hardware integration (Ingaldi and Ulewicz, 2020; van Lopik et al., 2020).
Compatibility and cybersecurity risks of Industry 4.0 technologies are other important
technological determinants that have negatively pushed SMEs toward unfavorable adoption
decisions. Konur et al. (2021) explain that interoperability is an important design principle of
Industry 4.0, meaning the existing legacy digital and operations technologies should have the
capability to communicate with Industry 4.0 technologies and exchange information.
However, empirical evidence reveals that most SMEs find Industry 4.0 technologies
incompatible with their existing technological infrastructure (Prause, 2019). Similarly, SMEs
commonly develop negative adoption intentions toward Industry 4.0 technologies due to
possible cybersecurity concerns (Horvath and Szabo, 2019). Scholars such as Benitez et al.
(2020) and Khanzode et al. (2021) have shown that cyber-security risks of Industry 4.0 for
SMEs mainly include data ownership issues, information security, hardware security and
vulnerability challenges.
Chatterjee et al. (2021) and Rauch et al. (2019) introduced user-friendliness as an essential
technological determinant of Industry 4.0. They explained that Industry 4.0 technologies,
despite their complexity, are easy to operate and offer a satisfying user interface, thus driving
SMEs toward adoption. Chatterjee et al. (2021) and Rauch et al. (2019) explain that SMEs
perceive Industry 4.0 technologies to be user-friendly in terms of ease of learning/training and
user-friendly human-machine interfaces. Rauch et al. (2019) further introduced the real-time
data exchange capability of Industry 4.0 technologies as an essential driver, while
investments risk associated with the implementation of Industry 4.0 technologies was
introduced as a critical barrier by Benitez et al. (2020). Figure 3 explains that SMEs struggle
with building the real-time capability principle of Industry 4.0 in terms of unfamiliarity with
real-time communication protocols and standards as well as the incapability of their existing
infrastructure and platforms for engaging in real-time communication (Rauch et al., 2019).

4.3 Organizational determinants

Various organizational determinants impact Industry 4.0 technology adoption among SMEs.
Figure 4 offers the 11 major categories of the organizational determinants identified within
the SLR. Table 3 further describes how eligible studies have documented these organizational
determinants as drivers or barriers for Industry 4.0 technology adoption among SMEs.
Results show that digitalization knowledge and expertise is the most recognized
organizational determinant of Industry 4.0 technology adoption. Digital transformation
under Industry 4.0 is a challenging task for almost all organizations as it requires upskilling
and reskilling at an unprecedented scale and scope (Agarwal et al., 2021). Since the lack of
JMTM Determinant cluster Determinants Sub-determinants
Digitalization knowledge development
Absorptive capacity
Digitalization knowledge accumulation

Business industry
Number of employees
Business properties Business size
Revenue
Business type
Information processing-requirements
Availability of necessary technological
infrastructure Data storage, processing,
and security constraints
Cybersecurity maturity and readiness
Digitalization Lack of standardization of
technical competency Operations technology (OT) readiness existing IT/OT
for integration
Lack of back-end systems
Readiness and integrability of legacy IT for integration
infrastructure
Lack of a uniϐied
Availability of IT and digitalization communication protocol
specialists
Employee training on Industry 4.0
technologies
Org a nizational d eterm ina nts of Ind us try 4 .0 tech nolog y a do ption

Digitalization IT and digitalization knowledge

knowledge and competency
expertise Knowledgeable and experienced of top
management
Training Industry 4.0 professionals Quality of training
Consistency of training
Involvement in the Employee and operator involvement
implementation
Top and middle management
process involvement
Addressing labor shortage
Industry 4.0 conscious planning and goal via automation
identiϐication Business model
innovation
Industry 4.0 risk management capability

Industry 4.0 strategic Internal continuous improvement policy

Improved communication
management Overall strategic awareness of Industry across functional layers
competency 4.0 Motivation for enhancing
value proposition and
Strategic roadmapping for digitalization competitiveness

Cultural change for digitalization

Employee openness/resistance to
change
Organizational
Overall commitment to digitalization
culture
Resistance to diffusion of new
technologies Accessibility of ϐinancial
capital
Social security concerns of employees
Investment in existing
Organizational AMTs
Organizational rigidity
structure Investment in Industry 4.0
R&D
Financial resource availability Investment in internal and
human resource (manpower) for external digitalization
Resource availability digitalization experts
Time constraints
Collaboration with
business partners
Collaboration with
External social capital technology providers
Social capital Collaboration with
Internal social capital
supporting agencies (e.g.,
Top management’s demand for greater government)
Figure 4. control from Development of a real-
Organizational Top management Technology acceptance by managers and time performance
determinants of characteristics operations supervisors monitoring system
Industry 4.0 Management digitalization awareness
and commitment toward Industry 4.0
technology adoption
 Technological determinants
Involvement in Industry 4.0
Digitalization Digitalization the strategic Top
Absorptive Business technical knowledge implementation management Organizational Organizational Resource Social management
Studies capacity properties competency and expertise process competency culture structure availability capital characteristics

Agostini and Driver Driver Driver Driver

Nosella (2020)
Arcidiacono Driver Driver Driver
et al. (2019)
Benitez et al. Barrier Barrier Barrier
(2020)
Bosman et al.
(2019)
Buer et al. Barrier
(2021)
Chatterjee Driver
et al. (2021)
Cimini et al. Driver Driver
(2021)
Garzoni et al. Driver
(2020)
Ghobakhloo Driver Driver Driver
and Ching
(2019)
Ghobakhloo Driver Driver Driver Driver Driver Driver
and Fathi
(2020)
Ghobakhloo Driver Driver Driver Driver Driver Driver
and
Iranmanesh
(2021)
Hopkins Barrier Driver
(2021)
Horvath and Barrier Barrier Driver/ Barrier Barrier Barrier Barrier
Szabo (2019) Barrier
Huang et al. Barrier Barrier Barrier Barrier
(2019)

(continued )
adoption
Industry 4.0
Drivers and
barriers of

Organizational
Table 3.

determinants
 Table 3.
JMTM
Technological determinants
Involvement in Industry 4.0
Digitalization Digitalization the strategic Top
Absorptive Business technical knowledge implementation management Organizational Organizational Resource Social management
Studies capacity properties competency and expertise process competency culture structure availability capital characteristics

Ingaldi and Barrier Barrier Barrier Barrier Barrier

Ulewicz (2020)
Khanzode Barrier Barrier Barrier Barrier
et al. (2021)
Konur et al. Barrier
(2021)
Kumar et al. Barrier Barrier Barrier Barrier Barrier Barrier Barrier
(2020)
Maisiri et al. Barrier Barrier Barrier
(2021)
Masood and Barrier Driver
Sonntag
(2020)
Michna and Driver Driver Driver
Kmieciak
(2020)
Mittal et al. Driver Driver/ Driver
(2020) Barrier
Moeuf et al. Driver/Barrier Driver Driver/ Driver Driver Driver Driver
(2020) Barrier
M€ uller et al. Driver
(2018)
Pech and Barrier Driver Driver
Vrchota (2020)
Prause (2019) Barrier Barrier Barrier
Ratnasingam Barrier Barrier
et al. (2020)
Rauch et al. Barrier Barrier Barrier Barrier
(2019)
Somohano- Driver Driver
Rodrıguez
et al. (2020)

(continued )
 Technological determinants
Involvement in Industry 4.0
Digitalization Digitalization the strategic Top
Absorptive Business technical knowledge implementation management Organizational Organizational Resource Social management
Studies capacity properties competency and expertise process competency culture structure availability capital characteristics

Stentoft et al. Barrier Driver/ Barrier Barrier

(2021) Barrier
Stentoft et al. Barrier Barrier
(2020)
T€urkeş et al. Barrier Barrier Barrier Barrier
(2019)
van Lopik Driver/Barrier Driver
et al. (2020)
Won and Park Driver Driver Driver Driver/
(2020) Barrier
adoption
Industry 4.0
Drivers and
barriers of

Table 3.
JMTM knowledge resources and competencies is a widely acknowledged characteristic of smaller
businesses (Denicolai et al., 2021), digitalization knowledge and expertise play a crucial role in
SMEs’ transition toward Industry 4.0. Consistently, articles reviewed have shown that the
lack of digitalization knowledge and expertise is a significant barrier toward Industry 4.0
adoption decisions among SMEs (e.g. Huang et al., 2019; Ingaldi and Ulewicz, 2020). Figure 4
explains that this determinant impacts SMEs’ Industry 4.0 adoption decisions via many
underlying components such as the availability of IDT specialists or employees and
management IDT competency.
Industry 4.0 strategic management competency, as the second most important
determinant, involves various digital-organizational strategies such as strategic
roadmapping for digitalization or strategic awareness of Industry 4.0 advantages. Under
this determinant, SMEs with well-developed competencies for managing Industry 4.0
transformation form a favorable attitude toward adopting underlying technologies such as
cloud computing or big data (M€ uller et al., 2018; Pech and Vrchota, 2020). Alternatively, the
limited Industry 4.0 transformation management strategies lead to negative adoption
decisions among SMEs (Khanzode et al., 2021; T€ urkeş et al., 2019). Ghobakhloo and Fathi
(2020) demonstrated that Industry 4.0 technology adoption efforts are more likely to fail if
SMEs lack the necessary capabilities to develop and implement appropriate strategic
roadmap and plan for digitalization.
Results further showed that organizational culture could be a driver or barrier toward
Industry 4.0 technology adoption. For example, Ingaldi and Ulewicz (2020) showed that
employee resistance toward digitalization negatively impacts SMEs’ decisions toward
Industry 4.0 transformation. In contrast, Michna and Kmieciak (2020) and Moeuf et al. (2020)
demonstrated that a supportive business culture characterized by openness toward
innovation and digitalization leads SMEs to build a positive attitude toward Industry 4.0
technology adoption. According to Figure 4, the overall commitment to digitalization and
social security concerns of employees are among the fundamental aspects of the
organizational culture (Khanzode et al., 2021).
Top management characteristics and digitalization technical competency are other
important and widely recognized organizational determinants. As explained in Figure 4, top
management characteristics consist of three sub-determinants, including top management’s
(1) desire for the development of a real-time performance monitoring system, (2) technology
acceptance and (3) awareness and commitment toward Industry 4.0 (Chatterjee et al., 2021;
Maisiri et al., 2021). Results revealed that many SMEs are reluctant toward Industry 4.0 due to
the general lack of management support and competency (Huang et al., 2019). Alternatively,
digitalization technical competency and the underlying sub-determinants generally tend to
hinder SMEs’ movement toward Industry 4.0. For example, SMEs are commonly suffering
from the lack of information technology (IT) and operations technology (OT) readiness,
particularly in terms of lack of standardization of existing IT/OT and lack of back-end
systems for integration (Horvath and Szabo, 2019).
Resource availability was mainly recognized as a barrier toward Industry 4.0 technology
adoption (e.g. Benitez et al., 2020). This finding is somewhat expected, given that the Industry
4.0 transition and the implementation of its technological constituents are significantly
resource-intensive (Hoyer et al., 2020), while SMEs generally are at a resource disadvantage
compared to the larger businesses (Van Burg et al., 2012). Besides time and human resources,
Industry 4.0 technology adoption among SMEs significantly relies on the capital available for
investment in underlying advanced manufacturing technologies, digitalization research and
development, and attracting and training digital talent (Kumar et al., 2020; Won and
Park, 2020).
SMEs’ digitalization behavior under the Industry 4.0 agenda might vary significantly
based on business properties, such as information-processing requirements, size, type or
industry (Hopkins, 2021; Pech and Vrchota, 2020). For example, larger businesses were Drivers and
reported to be more likely to consider or decide on adopting Industry 4.0 technologies even barriers of
within SMEs of a specific national industry (Bosman et al., 2019; T€ urkeş et al., 2019). For
Italian manufacturers, B€ uchi et al. (2020) showed that the breadth and depth of Industry 4.0
Industry 4.0
technology adoption improve as the innovation intensity of the industrial sector or business adoption
size of the adopting company increases. Confirming these observations, a global-scale study
by Szasz et al. (2021) recently revealed that larger manufacturers invest significantly higher
in adopting Industry 4.0 technologies. Nonetheless, and contrary to Bosman et al. (2019),
Marcon et al. (2021) observed that business size causes no meaningful difference in Industry
4.0 adoption when comparing small Danish manufacturers against medium-sized
counterparts.
Reviewed articles have also proposed that the three organizational determinants of
absorptive capacity, organizational structure and social capital may also significantly
affect SMEs’ Industry 4.0 digitalization decision and behavior. Agostini and Nosella
(2020) and Mittal et al. (2020) empirically showed that SMEs’ ability to accumulate and
develop digitalization knowledge enables them to implement advanced Industry 4.0
technologies such as IIoT or big data analytics and better capitalize on them. SLR results
also showed that SMEs’ structure and underlying control systems, decision processes
and workflow might define SMEs’ attitude toward Industry 4.0 (Cimini et al., 2021).
Benitez et al. (2020) found that rigid and bureaucratic organizational structure has been a
significant barrier to adopting Industry 4.0 technologies among Brazilian SMEs. While
signifying the role of social capital, scholars such as Agostini and Nosella (2020) and
Moeuf et al. (2020) propose that SMEs’ capability to build and improve communication
across functional layers of internal and external shareholders drives and facilitates the
Industry 4.0 technology adoption. Consistently, Kumar et al. (2020) showed that SMEs’
internal lack of capacity to build strong relationships with business partners had been a
significant barrier to applying Industry 4.0 technologies among Indian manufacturing
SMEs. Finally, the adoption of Industry 4.0 technologies among SMEs also relies on the
users’ involvement in the digitalization process (Ghobakhloo and Fathi, 2020). Overall,
the scope of digitalization under Industry 4.0 necessitates the large-scale and interactive
involvement of operators, office employees and middle and top managers of SMEs across
the Industry 4.0 technology adoption and implementation processes (Arcidiacono et al.,
2019; van Lopik et al., 2020).

4.4 Environmental determinants

Results presented in Figure 5 explain that the adoption of Industry 4.0 technologies among
SMEs is affected by eight environmental determinants and their underlying components and
subcomponents. Furthermore, Table 4 describes how these environmental determinants
impact the adoption processes as drivers or barriers. External support is the most recognized
environmental determinant, closely followed by external pressure. External support consists
of stakeholder support, external financial aid, and government support (e.g. tax exemption).
Ingaldi and Ulewicz (2020) revealed that the lack of access to external financial aids has
significantly impeded the adoption of Industry 4.0 technologies (such as industrial robotics
and AI) among Polish SMEs. Similarly, Maisiri et al. (2021) identified the lack of government
support as one of the major barriers toward sustainable adoption of Industry 4.0 by South
African SMEs.
Stakeholder pressure in terms of business partner requirements, customer requirements
and pressure from government policy plays a crucial role in driving SMEs toward Industry
4.0 (M€uller et al., 2018). SMEs are generally the weaker partner in the industrial value chains.
Thus, they commonly get pressured by business partners or customers to adopt disruptive
technologies (Ghoabakhloo and Ching, 2019). For example, Chen (2020) found that Taiwanese
JMTM Determinant Determinants Sub-determinants
cluster
Market uncertainties Customer behavior
Competitive Industry 4.0 digitalization race uncertainty
environment Market turbulence
Overall competitive pressure Shorter product life cycle
Business partner requirements Business association
demand
Customer requirements
Stakeholder Distributor demand
Joining global supply chain
Enviro nm ental de term ina nts o f Ind us tr y 4 .0 technolog y a doption

pressure Supplier demands

Pressure from the business
environment
Pressure from government policy Legal requirements and
regulations
Business clustering and partnerships
External partnership Collaboration with academia Industry 4.0 progress
and collaboration coordination
Supply chain partnership and
collaboration Industry 4.0 progress
collaboration
All-inclusive stakeholder support Financial incentives
External support External ϐinancial aids Bank loan
Government support Tax exemption
Supportive digitalization
Accessibility of Industry 4.0 policies
Industry 4.0 technologies Accessibility of ϐirm-
accessibility Access to Industry 4.0 consultants speciϐic Industry 4.0
technologies
Technology vendor monopoly Accessibility of the off-
Industry 4.0 the-shelf Industry 4.0
Technology vendor support and technologies
technology provider commitment
properties
Technology vendor trustworthiness
Access to ICT infrastructure
Infrastructural and Access to reliable electricity supply
regional properties
Availability of skilled workforce for
Industry 4.0
Figure 5. Business partners’ Industry 4.0
Environmental technologies acceptance readiness
determinants of Value chain Industry Customers’ acceptance of Industry 4.0
Industry 4.0 4.0 readiness technologies and smart products
technology adoption Supply partners’ Industry 4.0
technologies acceptance readiness

manufacturing SMEs adopt Industry 4.0 technologies such as cloud computing, CPS and IoT
to build the necessary horizontal integration capacity to join the global supply chains.
Similarly, Stentoft et al. (2021) showed that Danish manufacturing SMEs consider the
adoption of advanced Industry 4.0 technologies such as additive manufacturing, autonomous
robots and simulation as a response to customer requirements.
The competitive environment is another highly recognized environmental determinant
that drives SMEs toward Industry 4.0 transformation. Market uncertainties, the Industry
4.0 digitalization race, and the overall competitive pressure, along with their components,
are constituents of a competitive environment under which SMEs react with the adoption
of Industry 4.0 technologies such as additive manufacturing, AI and CPS (Won and Park,
2020). T€urkeş et al. (2019) found that Romanian SMEs mainly adopt and use Industry 4.0
technologies to keep up with competitors practicing Industry 4.0. Alternatively, Industry
4.0 accessibility and external partnership and collaboration are other well-recognized
environmental determinants that may drive or impede the adoption of Industry 4.0
technologies among SMEs. Industry 4.0 accessibility consists of SMEs’ access to both
 Environmental determinants
Industry 4.0
External technology Value chain
Competitive Stakeholder partnership and External Industry 4.0 provider Infrastructural and industry 4.0
Studies environment pressure collaboration support accessibility properties regional properties readiness

Ali et al. (2021) Driver Driver

Arcidiacono et al. Driver
(2019)
Benitez et al. Barrier Barrier Barrier
(2020)
Benitez et al. Driver
(2022)
Chen (2020) Driver
Garzoni et al. Driver
(2020)
Ghobakhloo and Driver Driver
Ching (2019)
Ghobakhloo and Driver Driver
Fathi (2020)
Ghobakhloo and Driver Driver
Iranmanesh
(2021)
Horvath and Driver Driver Barrier
Szabo (2019)
Huang et al. Driver
(2019)
Ingaldi and Barrier Barrier Barrier
Ulewicz (2020)
Khanzode et al. Barrier
(2021)
Konur et al. Driver
(2021)

(continued )
adoption
Industry 4.0
Drivers and
barriers of

Table 4.

determinants
Environmental
 Table 4.
JMTM
Environmental determinants
Industry 4.0
External technology Value chain
Competitive Stakeholder partnership and External Industry 4.0 provider Infrastructural and industry 4.0
Studies environment pressure collaboration support accessibility properties regional properties readiness

Kumar et al. Barrier Barrier

(2020)
Maisiri et al. Driver Barrier Barrier Driver/Barrier
(2021)
Moeuf et al. Driver
(2020)
M€uller et al. Driver
(2018)
Prause (2019) Barrier Barrier
Stentoft et al. Driver Driver
(2021)
Stentoft et al. Barrier Barrier
(2020)
T€urkeş et al. Driver Driver
(2019)
van Lopik et al. Driver
(2020)
Won and Park Driver Driver
(2020)
firm-specific (custom) or off-the-shelf Industry 4.0 technologies and the availability and Drivers and
accessibility of external Industry 4.0 consultants (Konur et al., 2021; Maisiri et al., 2021). barriers of
Previous studies have specifically highlighted the lack of access to external digitalization
experts as a critical barrier against SMEs’ movement toward Industry 4.0 (e.g. Benitez
Industry 4.0
et al., 2020). The external partnership and collaboration determinant involves three adoption
components of business clustering and partnerships, collaboration with academia, and
supply chain partnership and collaboration (Ali et al., 2021; Prause, 2019). According to
Kumar et al. (2020), the lack of coordination and collaboration among supply chain
partners prevents SMEs from applying Industry 4.0 technologies for sustainable
operations. Similarly, Maisiri et al. (2021) demonstrated that the supportive presence of
supply chain partnership and collaboration is a crucial enabler for sustainable adoption of
Industry 4.0 within SMEs.
SLR results further reveal that SMEs’ movement toward Industry 4.0 significantly relies
on the value chain Industry 4.0 readiness in terms of business and supply partners’ readiness
for accepting Industry 4.0 technologies along with customers’ acceptance of Industry 4.0
technologies and smart products (Ingaldi and Ulewicz, 2020). The importance of this
determinant roots in the horizontal integration and real-time communication design
principles of Industry 4.0, which require all value chain members to adopt and use the
necessary technologies to communicate with each other in real-time and process massive data
and information streams (Tiwari, 2021). Articles reviewed acknowledge that value chain
Industry 4.0 readiness primarily functions as a barrier given SMEs generally struggle with
business partners’ unwillingness for digital collaboration (Horvath and Szabo, 2019) as well
as customers and suppliers’ resistance toward the adoption of Industry 4.0 technologies
(Kumar et al., 2020).
Industry 4.0 technology provider properties such as monopolistic behavior can
significantly impact how SMEs decide on Industry 4.0 technology adoption. In this regard,
Arcidiacono et al. (2019) showed how a healthy relationship with Industry 4.0 technology
suppliers could facilitate the adoption of CPS, IoT, robotics, and big data analytics among
SMEs. In contrast, Stentoft et al. (2020) reported that technology supplier monopolies and the
resulting lack of competition in the Industry 4.0 technology market challenge the adoption of
additive manufacturing among Danish SMEs. Finally, infrastructural and regional property,
particularly in terms of availability and accessibility of information and communication
technology (ICT) infrastructure, reliable electricity supply and skilled workforce for Industry
4.0, is an important environmental determinant of Industry 4.0 technology adoption among
SMEs. Results reveal that SMEs from less developed economies are more likely to struggle
with Industry 4.0 transition, mainly due to the limited access to necessary regional ICT
infrastructure or skilled labor (Benitez et al., 2020; Maisiri et al., 2021).

4.5 Industry 4.0 technology adoption roadmap

The third research question involved identifying how SMEs can be empowered to pursue
digitalization under Industry 4.0. To this purpose, the study develops the SME-Industry 4.0
adoption roadmap shown in Figure 6. The roadmap, the classification of underlying
components and the relationships among subcomponents have been developed based on the
subjective summarization of SLR results and the textual narrative synthesis of eligible
articles and how scholars have explained the process of Industry 4.0 technology adoption
among SMEs. Indeed, eligible articles detailed a variety of recommendations or guidelines for
enabling SMEs’ Industry 4.0 transformation, and on many occasions, these guides directly
addressed the determinants of Industry 4.0 technology adoption among SMEs. Therefore, the
roadmap and its components represent favorable conditions needed for supporting
the Industry 4.0 transformation of SMEs, as identified by the eligible articles. The arrows
in the roadmap represent the logical order in which these favorable conditions can be
JMTM Internal Industry 4.0
knowledge competencies
Hiring external experts and
consultants
Internal training on
required expertise
(purposeful training)
Assessment of Human Resource
(HR) competencies for Industry 4.0 Multi-skilled
Employing Industry 4.0 talent when
employees
needed (purposeful hiring)
Cross-functional
Industry 4.0 talent recognition training
and management Employee involvement and
empowerment in Industry 4.0 adoption

Internal technological Assessment of IT and OT

maturity and readiness readiness Identifying meaningful approach for
using existing legacy IT infrastructure
IDT governance Achieving necessary
strategy level of standardization
Identifying business functions
for networking and integration across existing IT/OT
Assessing the cybersecurity
competencies

Value chain readiness for Readiness for physical flow

Industry 4.0 integration across supply chain Horizontal integration with
Cross-functional value partners
Readiness for real-time information
Information and sharing across supply chain
Digital Technology
(IDT) integration Readiness for activity
IDT alignment integration across supply chain
across value chain
Data consistency Readiness for financial flow Customer acceptance of smart
Data integration across supply chain products
interoperability

Internal and managerial All-inclusive Openness to digitalization

competencies Industry 4.0 and
commitment to and underlying changes digitalization risk
digitalization management capability
Strategic awareness of
Industry 4.0 advantages All-inclusive involvement in
Industry 4.0 technology
Resource availability implementation process Industry 4.0 planning and
and allocation management capability

External support for Industry External financial support

4.0 transformation
Business partners’ openness to Supporting regulations and
collaboration policies for data ownership
and cybersecurity
Government support for promoting
Industry 4.0 External
External cons
consultancy
sultancy
cy and
technicall suppo
pp rt
support
Availability of necessary ICT
infrastructure and Industry 4.0
Academia’s openness to collaborationn technologies
Figure 6.
The SME-Industry 4.0 Technology vendors’
technology adoption openness to collaboration Technology vendors’ supportr Availability of Industry 4.0-
roadmap and commitment skilled workforce

developed or provided. These sequences have been extracted from recommendations and
conclusions provided by the eligible articles. This roadmap outlines five enabling conditions
that empower SMEs to adopt technological constituents of Industry 4.0. The internal Industry
4.0 knowledge competencies address the knowledge intensity of Industry 4.0 technology
adoption. It involves developing multi-skilled internal talents adequately knowledgeable and
ready to adopt disruptive Industry 4.0 technologies. Under this condition, SMEs should
devise a strategy to evaluate their existing Industry 4.0 knowledge competencies, hire new
talents and external consultants when needed, engage human resources into cross-functional
training and empower them to become multi-skilled to interact with Industry 4.0
hyperconnected ecosystem.
The internal technological maturity and readiness describe how SMEs can achieve
standardization and readiness across existing IT and OT to integrate Industry 4.0
technologies into their business processes. This condition involves devising a comprehensive
IDT governance strategy that identifies business functions in dire need of digitalization and Drivers and
outlines the process of IT/OT readiness assessment. SMEs need to identify meaningful barriers of
approaches to use existing legacy infrastructure to save on costs while ensuring that
necessary cybersecurity competencies are in place. SMEs should achieve the necessary levels
Industry 4.0
of standardization across existing IT/OT so that the resulting interoperability can facilitate adoption
vertical and horizontal integration of business functions. The value chain readiness for
Industry 4.0 addresses the horizontal integration principle of Industry 4.0, explaining that
SMEs need to integrate with value chain partners under the digital supply network concept.
Under this condition, all value partners, including focal SMEs and their assets, need to engage
in real-time communication and information sharing. Consistently, this condition and
underlying constituents describe how value chain partners can reach the desired level of
collective readiness for Industry 4.0 so that the adoption of underlying technologies would
appear more feasible to SMEs.
The internal and managerial competencies explain how top management in SMEs can
ensure that internal enablers of Industry 4.0 technology adoption are correctly in place. This
condition explains the steps necessary for the strategic management of the Industry 4.0
transformation among SMEs by addressing the resource intensity, complexity, and risks of
the technology adoption. It explains that top management’s strategic awareness of Industry
4.0 is the stepping stone for SMEs’ movement toward Industry 4.0 digital transformation.
Next is the issue of resource availability and the extent to which management is willing to
commit resources to digitalization. Industry 4.0 further requires the involvement of
management and employees in adoption decisions and technology implementation processes.
For this to happen, management should have the necessary Industry 4.0-digitalization
planning capability and promote the culture of openness to Industry 4.0 changes across all
functional departments. These internal sub-determinants and competencies would enable
SMEs to develop the necessary capabilities to manage the risk of digital transformation.
Finally, the external support for Industry 4.0 transformation draws on the fact that most
SMEs are not equipped with the necessary tools, capabilities, and resources to adopt Industry
4.0 technologies. This condition involves various environmental conditions, from the
openness of SMEs’ business partners to digital collaboration to supporting Industry 4.0
regulatory policies from governments. It describes how external players such as
governments, academia, or technology vendors can support and empower SMEs to access
the digital transformation requirements of Industry 4.0. Under this condition, government
support appears to be the most crucial external determinant of Industry 4.0 transformation
for SMEs. Government support can indirectly define how SMEs access the necessary
technological and knowledge infrastructure or how external players such as technology
vendors may collaborate with smaller businesses over digitalization. This is why leading
countries such as Germany or many governing bodies such as European Commission offer
comprehensive supportive policies to promote SMEs’ adoption of Industry 4.0 technologies.

5. Discussion and conclusion

The present study aimed to understand better the process through which SMEs might decide
to adopt and implement Industry 4.0 technologies. To this purpose, the study defined three
research questions. The first research question aimed to understand to what extent
technological constituents of Industry 4.0 have been implemented within SMEs. The review
of eligible articles reveals that Industry 4.0 and the implementation of underlying
technologies can provide SMEs with numerous advantages. For example, Industry 4.0
technologies promote the innovation capacity of SMEs (Somohano-Rodrıguez et al., 2020),
enhance the efficiency of collaboration with suppliers and customers across many activities
such as product design (Chen, 2020), improve the process controls and reduce the risks of
JMTM errors across various business operations (Konur et al., 2021). Hopkins (2021) explains that
each technological constituent of Industry 4.0 impacts the performance of SMEs distinctively.
Scholars further believe that SMEs do not necessarily need to overcommit to the
simultaneous implementation of all Industry 4.0 technologies, and even the piecemeal
implementation of individual Industry 4.0 technologies can lead to a significant
competitiveness and performance boost (Ghobakhloo and Fathi, 2020). Despite the
apparent advantages that Industry 4.0 offers for SMEs, the adoption rates of the
underlying technologies such as AI, augmented and virtual reality, blockchain, CPS, IoT
and simulation have been considerably low among these businesses. SLR results
demonstrated that SMEs are more biased toward adopting the traditional IDTs such as
ERP. They significantly lag behind large organizations in benefiting from disruptive
Industry 4.0 technologies such as blockchain, digital twin or extended reality. Although some
overestimate the diffusion of Industry 4.0 technologies in SMEs, results revealed that most
SMEs are still struggling with the initial adoption decisions regarding the digital
transformation under Industry 4.0. While SMEs in developing nations are not particularly
doing well in Industry 4.0 digital transformation (e.g. Hopkins, 2021), circumstances are much
worse for SMEs operating in less developed economies (e.g. Ratnasingam et al., 2020).
The second research question aimed to identify technological, organizational and
environmental determinants of Industry 4.0 technology adoption among SMEs. To address
this question, the study drew on the TOE framework to systematically structure SLR results
into context-specific clusters of determinants that might impact the institutionalization of
Industry 4.0 technologies among smaller businesses. SLR results identified a wide variety of
technological, organizational and environmental factors that might determine the current
positioning of SMEs against Industry 4.0. A minority of the determinants, such as the
complexity of Industry 4.0 technologies, function as barriers in nature. Alternatively, some
determinants such as perceived benefits of Industry 4.0 or stakeholder pressure intrinsically
function as drivers, pushing SMEs toward Industry 4.0. However, most determinants
identified, such as digitalization technical competency or some managerial properties, can
function as a double-edged sword, facilitating the adoption of Industry 4.0 technologies when
favorably present and hindering it when undesirably lacking.
The study addressed the third research question by developing the Industry 4.0
technology adoption roadmap for SMEs to explain how smaller businesses can be
empowered to pursue digitalization under this phenomenon. The roadmap identified five
primary conditions essential to successful digital transformation under Industry 4.0 and
described the underlying constituents of each necessary condition.

5.1 Implications
The study explained how the scope of digital transformation under Industry 4.0 expands
beyond the internal circumstances of individual SMEs and the implementation of generic IT
applications. Results contribute to the theory by shedding light on the complexity of Industry
4.0 digital transformation of SMEs. Results revealed that contrary to classic IT
implementation projects, Industry 4.0 transformation involves adopting various disruptive
technologies. Industry 4.0 transformation is starkly different from classic IT adoption
projects in the sense that it is a function of numerous technological, organizational and
environmental determinants, many of which are unique to the Industry 4.0 phenomenon.
The literature tends to classify the technological constituents of Industry 4.0 into two
separate clusters. The first cluster consists of emerging technologies that have recently
become commercially and technically available to businesses. The second cluster, commonly
labeled as facilitating technologies, are the mainstream and mature IDT that provides the
necessary conditions for emerging technologies of Industry 4.0 to operate and function
properly. Results found that smaller businesses lag behind larger organizations in pursuing
Industry 4.0 transformation, given that most SMEs, even within developed economies, are Drivers and
still stuck and struggling with the adoption of the facilitating technologies of Industry 4.0. In barriers of
this regard, results showed that many lesser-known factors, such as employees’ social
security concerns or lack of legacy IT/OT interoperability, prevent SMEs from adopting the
Industry 4.0
emerging Industry 4.0 technologies. adoption
SMEs’ intrinsic disadvantages such as resource scarcity, skill limitation or low bargaining
power have long been recognized as barriers to innovation diffusion, and the integrative nature
of Industry 4.0 technologies appears to intensify said disadvantages significantly. SMEs can
alleviate some of these disadvantages by addressing the internal knowledge gap and achieving a
strategic awareness of Industry 4.0, developing absorptive capacity, collaborating with business
partners and academia and training employees for digitalization. Nonetheless, most SMEs rely
on external support to adopt disruptive Industry 4.0 technologies. Scholars believe that
governments can play the most salient role in SMEs’ digitalization under Industry 4.0, especially
by easing the initial digital transition steps, including the adoption decision phase. SLR results
show that the supporting role of government includes addressing the infrastructural gap, the
financial gap by providing SMEs with tangible digital investments incentives and the
digitalization policy gap through devising and enforcing supportive cyber laws, anti-digital
oligarchy laws and other supportive laws that enhance digital inclusion. Academia and
technology providers can also play an essential role in promoting Industry 4.0 digitalization,
mainly through raising SMEs’ cybersecurity capabilities, streamlining the supply of disruptive
technologies, offering Industry 4.0 technology assistance and support, providing training and
upskilling services and helping SMEs with developing internal data culture.
Industry 4.0 is complex, involving implementing various technologies, developing techno-
functional principles and restructuring business processes and practices. Nonetheless,
articles reviewed have shown that digitalization under Industry 4.0 is also scalable, meaning
SMEs can initiate their Industry 4.0 transition via limited yet successful adoption and
implementation of entry-level digital technologies such as social commerce platforms or cloud
enterprise systems. During this period, SMEs can capitalize on the technologies implemented
to optimize their operations at a meager cost. They can also gradually address weaknesses in
internal capabilities and seek and leverage external support and incentives. By doing so,
SMEs can improve their digitalization maturity and capitalize on the complementarities in
Industry 4.0 technologies to push digitalization even further.
The roadmap explained how internal and value chain readiness is critical to the SMEs’
adoption of Industry 4.0 technologies. Results indicate that achieving the necessary readiness
is considerably challenging to SMEs, requiring them to develop specific capabilities in
cybersecurity, digitalization strategic planning, IDT governance, OT capability assessment,
change management and supply chain collaboration. Therefore, eligible articles reviewed
assume that the entry point for Industry 4.0 transformation of most SMEs is in conducting a
digitalization maturity and readiness preassessment to understand (1) which area of their
business should digitalize first, (2) adoption of which technologies should be prioritized and
(3) whether the necessary skills, resources and competencies are in place at the firm and
supply chain levels. Therefore, the literature widely believes that SMEs should implement a
detailed Industry 4.0 strategy to gain a structured overview of business functions that require
digitalization and underlying challenges. The Industry 4.0 strategy should also identify and
describe the networks of collaborators, essential IT/OT upgrade schemes, skill development
programs, implementation teams, technology vendors, necessary external consultancy
services and external aids and incentives.

5.2 Limitations and future research

Most determinants identified are interdependent and may interact with each other in various
ways within the natural business environment. Consistently, how businesses interact and
JMTM deal with these determinants would enormously impact how SMEs adopt Industry 4.0
technologies. For example, top management’s perception of Industry 4.0 benefits might
impact how SMEs finance or strategically manage the technology adoption process.
Unfortunately, the literature offers limited insights into the precedence relationship among
the determinants identified. Future research is invited to identify the interactions and
interrelationships among these determinants and better explain how SMEs should prioritize
addressing them in their quest for Industry 4.0 digital transformation.
Some of the determinants identified, such as digitalization technical competency focusing
on IT/OT integration or Industry 4.0 strategic management competency, are unique to the
Industry 4.0 context as they cannot be traced back to the classic information system-SME
literature. Although the literature has identified the importance of these necessary conditions,
little has been done to understand how SMEs should mobilize their limited resources and
form strategic digitalization partnerships to build competencies vital to the said conditions.
Therefore, future research can empower SMEs’ digitalization effort by methodically
explaining how SMEs can develop and further capitalize on necessary digitalization
capabilities unique to Industry 4.0.
Industry 4.0 digitalization plays out differently across various regions and sectors. The
determinants identified, such as stakeholder pressure or cybersecurity risks, will have diverse
enabling or impeding impacts on SMEs active in specific value chains, industries or regions. It
means supportive policies must be recognized and devised based on the idiosyncratic needs of
ethnic SMEs groups. Unfortunately, academic and industrial reports indicate that existing
governmental policies have offered piecemeal support for empowering SMEs’ movement
toward Industry 4.0. As a result, SMEs struggle with various long-lasting or contemporary
digitalization barriers, such as upskilling challenges or poor cybersecurity regulation. This
problem may root in governments’ inability to identify SMEs’ specific needs or the inefficiency
of the support and incentive delivery channels. Therefore, future research is invited to explain
how governments can speed up, simplify and assist with SMEs’ Industry 4.0 transformation.

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About the authors

Morteza Ghobakhloo is an IN4ACT project researcher at the School of Economics and

Management, Kaunas University of Technology, Lithuania. He holds a PhD in
Industrial Engineering from the University Putra Malaysia. His research interests
include new technology adoption and acceptance in the Industry 4.0 era, the upcoming
Industry 5.0 phenomenon, the business value of digitalization and corporate
sustainability. His research has been published in many leading information
systems and operations management journals such as BSE, IJPR and JCLP, among
many others. Morteza Ghobakhloo is the corresponding author and can be contacted at:
morteza_ghobakhloo@yahoo.com
Mohammad Iranmanesh is a senior lecturer attached to the School of Business and
Law, Edith Cowan University. His research interests are interface of information
systems (IS) and sustainability, focusing on impacts of digital transformation on
sustainability and determinants of digitalization. He has published more than 100
articles in a range of leading academic journals.
JMTM Mantas Vilkas is a Researcher at the ERA Chair team, IN4ACT, and a member of the
Digitalization Research Group at the School of Economics and Business at Kaunas
University of Technology, Lithuania. He holds a PhD in business and administration
from the Kaunas University of Technology. Mantas has a long experience in research,
fundraising and lecturing. He was a visiting scholar at the University of Girona (Spain)
and Aalto University (Finland). His current research and teaching focus on the
complementarity of operational excellence methods, digital technologies and data
analytics. He is a representative of Lithuania in the European manufacturing survey, a
network of EU universities, collecting comprehensive data on the diffusion of organizational and
technological innovations across Europe.
Andrius Grybauskas is a Researcher at the ERA Chair team, IN4ACT at the School of
Economics and Business in the Kaunas University of Technology. He holds a PhD in
economics at the Kaunas University of Technology. Andrius’s research themes revolve
around the real estate market and its stability, housing bubbles, econometrics, Big
Data, REITs, machine learning, forecasting, web-scraping and artificial intelligence. He
has been part of major national and European projects, and his research has been
published in several leading journals.
Azlan Amran started his career as a lecturer at the school of management, Universiti
Sains Malaysia, in 2006. He is now a professor at the Graduate School of Business at the
same university. Prior to joining USM, he worked as an accountant for several years.
He has published a significant number of articles in the area of CSR in both local and
international journals. At present, he holds the position of Dean at the Graduate School
of Business. In terms of practical experience, he has been involved in several training
and consultancy projects in accounting-related issues and corporate social reporting.
He is currently holding several grants to support his research on CSR-related issues. He
is also a member of the editorial board for several international journals.

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