Resumen
Industry 4.0 increases the production efficiency and competitiveness of companies. However, Industry 4.0 implementation is comparatively low in developing countries, while Malaysian manufacturing Small and Medium Enterprises (SMEs) Industry 4.0 adoption is still in its infancy stage. This quantitative study aimed to broaden the knowledge of the driving factors that significantly strengthen Malaysian manufacturing SMEs? readiness for the digital revolution. Based on the Resource-Based View theory, the study built a research framework to govern the investigation of organizational capabilities, SME institutional support, perceived advantage, and market factors as the driving factors of Industry 4.0 readiness, while firm size as the moderating variable. The data were collected by conducting an online survey with the owners and managers of Malaysian-owned manufacturing SMEs located throughout Peninsular Malaysia, where the firms have received some form of government assistance. The analysis of the study indicated that organizational capabilities, SME institutional support, and market factors positively correlate with Industry 4.0 readiness. It was determined that firm size only moderates the relationship between SME institutional support and Industry 4.0 readiness. This study?s findings benefit industry practitioners and policymakers who wish to drive the future of Malaysia?s SMEs business ecosystem and contribute to Industry 4.0 literature.