Industry 4.0 Technology Re-Engineering Impacts on Strategy Agility and SME Competitiveness in Malaysia

Abstract

Competitiveness is the key factor for manufacturing SMEs to increase the Malaysia economy. Competency of manufacturers to react with the changes driven industry 4.0 is now becomes imperative for the manufacturers to sustain Competitiveness. Hence, the main objective for this study is to assess the competitiveness levels, as well as to examine the relationship between industry 4.0 and Competitiveness, the function of industry 4.0 as mediating role. Specifically, the study integrates internal factor which are individual factors that consist of entrepreneurial orientation (innovativeness), organizational factor that consist of intellectual capital (structural capital) and external factor which is institutional factors, whereas SMEs competitiveness is treated as the dependent variable. The theories used to link all the mediating and independent variable is Resource-Based View (RBV) and Institutional theory. The study is quantitative based via survey questionnaire and responded by 162 SMEs manufacturers and analyses were carried out using SPSS and Smart-PLS software. This paper is one of the initial attempts to draw the attention towards the important role of management practices in industry 4.0, as most of the recent studies are discussing the technological aspect. This paper also suggests empirical and quantitative investigation on these management approaches in the context of industry 4.0. Through the finding, manufacturing SMEs are clearly aware and understand the engaging industry 4.0 to sustain the important of competitiveness in their business performance.