Influence of Government Intervention towards Industry 4.0 Adoption among Service Sector SMEs: Perspective from an emerging economy

Abstract

Small and medium-sized enterprises (SMEs) have the potential to leverage emerging technologies during the Industry 4.0 era. However, their adoption of these technologies remains challenging. The target population consists of service sector SMEs in Kuala Lumpur and Selangor, registered under SME Corporation Malaysia. In this study, we gathered data through a combination of self-distributed questionnaires and online surveys. We obtained a total of 142 responses from in-person visits and an additional 106 responses from online questionnaires. Thus, a total of 248 usable surveys were collected and analysed using SPSS version 28 and SmartPLS version 4. We employed PLS-SEM analysis to examine the impact of four factors on the adoption of Industry 4.0 in SMEs. These factors include relative advantage, compatibility, complexity and cost. Additionally, we explored the moderating effect of government intervention on the relationships between these factors and Industry 4.0 adoption. This research makes a valuable contribution to our understanding of technological implementation in small-scale enterprises by proposing a new moderating variable in framework.