The effect of IR4.0 readiness and government initiative among E&E SMEs in Malaysia

Industrial Revolution 4.0 (IR4.0) has created tremendous challenges in the business world, particularly in Electrical and Electronics (E&E) Small and Medium-sized Enterprises (SMEs) in Malaysia. This study was conducted to determine the effect of IR4.0 readiness (optimism, innovativeness, discomfort, and insecurity), government initiatives, and IR4.0 adoption (perceived usefulness and perceived ease of use) by providing a framework that integrates all these effects. This study also considered the moderating role of government initiatives. Individuals in managerial positions were identified as units of analysis. A survey method was employed, and a structured questionnaire was distributed to 500 E&E small and medium-sized enterprises. A total of 202 samples were deemed usable, yielding an effective response rate of 40.4 per cent. Statistical Package for Social Science (SPSS) and Partial Least Squares to Structural Equation Modelling (PLS-SEM) were employed. The findings indicated that out of the 19 hypotheses inferred, ten hypotheses were supported, while nine were not supported. IR4.0 readiness was shown to have a significant positive effect on IR4.0 adoption. Optimism has a significant positive effect on perceived usefulness and perceived ease of use. Innovativeness has a significant positive effect on perceived ease of use. Government initiatives positively affected perceived usefulness and perceived ease of use. Furthermore, government initiatives moderate the relationship between optimism and perceived usefulness and perceived ease of use, discomfort and perceived usefulness, and insecurity and perceived ease of use. This study contributed to the existing body of knowledge by identifying the dimensions that affected IR4.0 adoption and proposed several practical suggestions for E&E small and medium-sized enterprises to improve IR4.0 adoption. This study is unique in that it pioneers IR4.0 readiness with the moderating effect of government initiatives in explaining IR4.0 adoption among E&E small and medium-sized enterprises. Lastly, the current study suggests avenues for researchers interested in exploring or enhancing other aspects of the research framework.