Addressing the Impact of Fourth Industrial Revolution on South African Manufacturing Small and Medium Enterprises (SMEs)

Abstract

The fourth industrial revolution (4IR) may fundamentally alter, not only the way people work but also, how Small and Medium (SME) manufacturing businesses operate. In the manufacturing sector, the 4IR may change the design; manufacturing; operations; services, products, and production systems; connectivity; and the interaction among parts, machines, and people. While the 4IR technologies may have many benefits, owing to innovation and technological progress, the manufacturing SMEs require their challenges to be addressed before they may benefit from 4IR technologies. To the best of the knowledge of the researchers, there is no conceptual 4IR manufacturing framework, specifically for a developing economy, which is necessary for addressing these challenges and the opportunities promised by the new industry. This research, therefore, intends to fill this gap by developing a conceptual 4IR framework to assist South African manufacturing SMEs in addressing some of these challenges. Following a comprehensive literature review, components of the 4IR and challenges in the manufacturing industry are elucidated, aimed at defining a set of qualitative propositions as our instrument to develop a conceptual framework for embedding 4IR technologies and opportunities in the manufacturing industry. Further aspects of the framework enable businesses to gain a competitive advantage and sustainable business performance. Future work in this area will validate the framework among stakeholders in the manufacturing industry within the context of a developing economy.

Innovations in small businesses: do public procurement contracts and intellectual property rights matter?

“…Besides the weaker business ecosystem, other factors also undermine SMEs’ incentives and aptitude to innovate, especially for those in developing and transitional economies. Among these factors are inadequate specialized financing as working or venture capital ( Eggers, 2020 ; Civelek et al., 2021 ), skilled labour shortages ( Serumaga-Zake and van der Poll, 2021 ), elevated barriers to entry for new firms ( Paul et al., 2017 ), and ineffective protection of intellectual property rights ( Jee and Sohn, 2021 ). For instance, weak and ineffective protection of intellectual property rights can prevent SMEs from accessing and absorbing new knowledge from research institutions to support innovation activities and expand their knowledge base ( Goduscheit and Knudsen, 2015 ).…”

Physical and Technological Capital Efficiency for Profit Growth in Small and Medium Enterprises in Gauteng, South Africa: A Descriptive Qualitative Study

“…SMEs are regarded as the key players in economic growth as well as in creating jobs worldwide [1][2][3]. The size of the SMEs is based on the number of employees hired not exceeding 20 for micro or very small businesses, between 20 and 50 for small businesses and less than 250 for medium enterprises, which also supports the 2019 amendment of the National Small Enterprises Act No.…”

Comparative analysis of national innovation systems: Implications for SMEs' adoption of fourth industrial revolution technologies in developing and developed countries

“…It can be seen in Figure 5 that developed countries can spend more than 1% of their GDP on R&D while developing countries spend less than 1%. Therefore, similar to Serumaga and Van der Poll (2021), the following research proposition (RP) is made: RP6: An increased investment in R&D by governments in developing countries may positively influence the adoption of 4IR technologies by SMEs.…”

“…These form part of the United Nations' Sustainable Development Goals, and the World Economic Forum (2020) recommends using Fourth Industrial Revolution (4IR) technologies as tools to overcome these challenges. Small and Medium Enterprises (SMEs) on the other hand are generally viewed as key drivers of job creation, poverty alleviation and economic growth (Adelowotan, 2021;Serumaga-Zake & van der Poll, 2021), meaning they have the potential to solve the above-mentioned social challenges, especially through the adoption of 4IR technologies to develop innovative solutions.…”