Influence of Government Intervention towards Industry 4.0 Adoption among Service Sector SMEs: Perspective from an emerging economy


  • Mira Qerul Barriah Muhamad Faculty of Business and Management, Universiti Teknologi Mara, 40450 Shah Alam, Selangor, Malaysia.
  • Syed Jamal Abdul Nasir Syed Mohamad Arshad Ayub Graduate Business School (AAGBS), Universiti Teknologi Mara, 40450 Shah Alam, Selangor, Malaysia
  • Norzanah Mat Nor Arshad Ayub Graduate Business School (AAGBS), Universiti Teknologi Mara, 40450 Shah Alam, Selangor, Malaysia



Industry 4.0 adoption, Government Intervention, DOI Theory, SMEs


Small and medium-sized enterprises (SMEs) have the potential to leverage emerging technologies during the Industry 4.0 era. However, their adoption of these technologies remains challenging. The target population consists of service sector SMEs in Kuala Lumpur and Selangor, registered under SME Corporation Malaysia. In this study, we gathered data through a combination of self-distributed questionnaires and online surveys. We obtained a total of 142 responses from in-person visits and an additional 106 responses from online questionnaires. Thus, a total of 248 usable surveys were collected and analysed using SPSS version 28 and SmartPLS version 4. We employed PLS-SEM analysis to examine the impact of four factors on the adoption of Industry 4.0 in SMEs. These factors include relative advantage, compatibility, complexity and cost. Additionally, we explored the moderating effect of government intervention on the relationships between these factors and Industry 4.0 adoption. This research makes a valuable contribution to our understanding of technological implementation in small-scale enterprises by proposing a new moderating variable in framework.


Alalwan, A. A., Dwivedi, Y. K., & Rana, N. P. (2017). Factors influencing adoption of mobile banking by Jordanian bank customers: Extending UTAUT2 with trust. International Journal of Information Management, 37(3), 99–110. DOI:

Bhattacharya, M., Wamba, S. F., & Kamdjoug, J. R. K. (2019). Exploring the determinants of ERP adoption intention: The case of ERP-enabled emergency service. International Journal of Technology Diffusion (IJTD), 10(4), 58-76. DOI:

Brozzi, R., Forti, D., Rauch, E., & Matt, D. T. (2020). The Advantages of IR4.0 Applications for Sustainability: Results from a Sample of Manufacturing Companies. Sustainability, 12(9), 3647. DOI:

Cagliano, R., Canterino, F., Longoni, A., & Bartezzaghi, E. (2019). The interplay between smart manufacturing technologies and work organisation. International Journal of Operations &Amp; Production Management, 39(6/7/8), 913–934. DOI:

Damanpour, F., & Schneider, M. (2006). Phases of the Adoption of Innovation in Organizations: Effects of Environment, Organization and Top Managers. British Journal of Management, 17(3), 215–236. DOI:

Davis, F., Bagozzi, R., & Warshaw, P. (1989). User acceptance of computer technology: A comparison of two theoretical models. Management Science, 35(8), 982-1003. DOI:

Dwivedi, Y. K., Rana, N. P., Janssen, M., Lal, B., Williams, M. D., & Clement, M. (2017). Empirical validation of a unified model of electronic government adoption (UMEGA). Government Information Quarterly, 34(2), 211–230. DOI:

Ghobakhloo, M., & Iranmanesh, M. (2021). Digital transformation success under Industry 4.0: A strategic guideline for manufacturing SMEs. Journal of Manufacturing Technology Management, 32(8), 1533-1556. DOI:

Hair, J. F., Hult, T., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). Thousand Oaks: Sage. DOI:

Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Thousand Oaks, CA: Sage.

Ing, T. S., Lee, T. C., Chan, S. W., Alipal, J., & Hamid, N. A. (2019). An overview of the rising challenges in implementing industry 4.0. International Journal of Supply Chain Management, 8(6), 1181-1188.

Jayashree, S., Hassan Reza, M. N., Malarvizhi, C. A. N., Maheswari, H., Hosseini, Z., & Kasim, A. (2021). The Impact of Technological Innovation on IR4.0 Implementation and Sustainability: An Empirical Study on Malaysian Small and Medium Sized Enterprises. Sustainability, 13(18), 10115. DOI:

Kapoor, K. K., Dwivedi, Y. K., & Williams, M. D. (2015). Examining the role of three sets of innovation attributes for determining adoption of the interbank mobile payment service. Information Systems Frontiers, 17(5), 1039–1056. DOI:

Lian, J. W., Yen, D. C. & Wang, Y. T. (2014). An exploratory study to understand the critical factors affecting the decision to adopt cloud computing in Taiwan hospital. International Journal of Information Management, 34(1), 28-36. DOI:

Lin, A., & Chen, N. C. (2012). Cloud computing as an innovation: Percepetion, attitude, and adoption. International Journal of Information Management, 32(6), 533-540. DOI:

Madhavan, M., Wangtueai, S., Sharafuddin, M. A., & Chaichana, T. (2022). The Precipitative Effects of Pandemic on Open Innovation of SMEs: A Scientometrics and Systematic Review of Industry 4.0 and Industry 5.0. Journal of Open Innovation: Technology, Market, and Complexity, 8(3), 152. DOI:

Marcon, E., Soliman, M., Gerstlberger, W., & Frank, A. G. (2021). Sociotechnical factors and IR4.0: an integrative perspective for the adoption of smart manufacturing technologies. Journal of Manufacturing Technology Management, 33(2), 259-286. DOI:

Oliveira, T., Thomas, M., & Espadanal, M. (2014). Assessing the determinants of cloud computing adoption: An analysis of the manufacturing and services sectors. Information and Management, 51, 497–510. DOI:

Puklavec, B., Oliveira, T., & Popovič, A. (2018). Understanding the determinants of business intelligence system adoption stages an empirical study of SMEs. Industrial Management & Data Systems, 118(1), 236–261. DOI:

Rogers, E. M. (2003). Diffusion of Innovations (5th ed.) New York, NY: Free Press.

Rojko, A. (2017). IR4.0 concept: Background and overview. International Journal of Interactive Mobile Technologies (IJIM), 11(5), 77–90. DOI:

Romero, D., Mattsson, S., Fast-Berglund, Å., Wuest, T., Gorecky, D., & Stahre, J. (2018). Digitalizing occupational health, safety and productivity for the operator 4.0. In IFIP international conference on advances in production management systems, 473-481. DOI:

Saberi, S., Kouhizadeh, M., Sarkis, J., & Shen, L. (2018). Blockchain technology and its relationships to sustainable supply chain management. International Journal of Production Research, 57(7), 2117–2135. DOI:

Slade, E. L., Dwivedi, Y. K., Piercy, N. C., & Williams, M. D. (2015). Modeling Consumers’ Adoption Intentions of Remote Mobile Payments in the United Kingdom: Extending UTAUT with Innovativeness, Risk, and Trust. Psychology & Marketing, 32(8), 860–873. DOI:

SME Annual Report 2017/18 (2018). Digitalisation Survey of SMEs in 2018. Retrieved on November 2, 2022 from

SME Corporation Malaysia (2017). Propelling SMEs in the digital world. Retrieved on October 11, 2022 from

Stieninger, M., Nedbal, D., Wetzlinger, W., Wagner, G., & Erskine, M. A. (2014). Impact on the organizational adoption of cloud computing: A reconceptualization of influencing factors. Procedia Technology, 16, 85–93. DOI:

Stoica, M., Miller, D. W., & Stotlar, D. (2005). New technology adoption, business strategy and government involvement: The case of mobile commerce. Journal of Non profit & Public Sector Marketing, 13(1&2), 213-232. DOI:

Tarasov, I. V. (2018). Industry 4.0: Technologies and their impact on productivity of industrial companies. Strategic decisions and risk management, (2), 62-69. DOI:

Venkatesh, V., Thong, J. Y., & Xu, X. (2012). Consumer acceptance and use of information technology: extending the unified theory of acceptance and use of technology. MIS quarterly, 36(1), 157-178. DOI:

Wong, L. W., Leong, L. Y., Hew, J. J., Tan, G. W. H., & Ooi, K. B. (2020). Time to seize the digital evolution: Adoption of blockchain in operations and supply chain management among Malaysian SMEs. International Journal of Information Management, 52, 101997. DOI:

Yuksel, H. (2020). An empirical evaluation of IR4.0 applications of companies in Turkey: The case of a developing country. Technology in Society, 63, 101364. DOI:




How to Cite

Muhamad, M. Q. B., Syed Mohamad, S. J. A. N., & Mat Nor, N. (2023). Influence of Government Intervention towards Industry 4.0 Adoption among Service Sector SMEs: Perspective from an emerging economy. Environment-Behaviour Proceedings Journal, 8(SI15), 47–54.