Digital Transformation of Manufacturing Firms: Opportunities and Challenges for SMEs

Abstract

Industry 4.0, or smart manufacturing, is the declination of the paradigm of digital transformation in production firms. This transformation represents a big opportunity for European and Italian SMEs. A series of enabling technologies carry the potential to deeply change the production and consumption of products and services as well as improve the competitiveness and innovative performance of firms. Mass customization, small batch production, reduced time to market as well as productivity and efficiency gains are some of the advantages that even SMEs can enjoy by embracing the new technological paradigm. However, the transition can be particularly difficult for SMEs, which often don’t have enough resources (human and/or financial) or still lack a basic information system to start further implementations of Industry 4.0. After a brief discussion about the concepts of digital transformation, Industry 4.0, and the Italian context; a review of literature is performed to investigate the role of human capital in Industry 4.0: the implementation of cyber-physical systems has a huge impact on human resources management and development. Human capital that cannot keep pace with the evolution of technology represents a particularly severe obstacle to full implementation of Industry 4.0. SMEs have a comparative disadvantage with respect to MNEs in sourcing talent, hence, training and life-long learning are crucial to succeed in the transformation of manufacturing jobs. The main emerging topics, challenges, tools and results are summarized and discussed with focus on the distinctive perspective of SMEs.