A Conceptual Study: Technology Adoption among Malaysian Manufacturing SMEs for Corporate Sustainability in the Context of IR 4.0

Abstract

Small and Medium Enterprises (SMEs) are the backbone of the Malaysian economy and played an important role in the economic transformation after gaining independence. In Malaysia, SMEs provide 5.7 million jobs to 70% of the Malaysian workforce. Malaysia's SME's export is in an upward trajectory and the largest contributor was beverages and tobacco, chemicals, manufactured goods, and miscellaneous manufactured articles. In 2019, the principal export destinations were Singapore, China, and the United States.

Through academic literature, the paper describes various challenges of technology adoption among manufacturing SMEs in Malaysia, and overcoming those issues will allow SMEs to grow and remain competitive in the global markets. The current scenario indicates that the growth of the economy is highly dependent on the growth and development of the SMEs but, the SMEs are lagging in terms of technology adoption to cultivate innovation, reducing operation costs, and increasing productivity. Hence, these challenges have deterred the Malaysian SMEs to compete with other larger economies. Additionally, Malaysian SMEs have to take opportunities of Industry 4.0 to enhance the efficiency and productivity of their manufacturing processes to expand their participation in the global markets as the domestic markets are limited.