CONCEPTUALIZING THE AUTOMATION MANUFACTURING TECHNOLOGY ADOPTION AMONG SMEs

Abstract

Small and Medium-sized Enterprises (SMEs) are essential to the growth of the world economy, particularly when it comes to gross domestic product (GDP) contributions, exports and employment. However, with the rapid development of the Fourth Industrial Revolution (IR 4.0), many SMEs face challenges in adopting Automation Manufacturing Technology (AMT) because of perceived complexity, insufficient technical expertise and financial limitations. AMT is still not widely used by SMEs, despite its potential advantages, which include higher efficiency, better product quality and lower costs. Using the Technology-Organization-Environment (TOE) framework, this study attempts to conceptualize the main factors driving AMT adoption and its effect on SME performance in Malaysia. Applying a quantitative approach, data will be collected through a structured questionnaire distributed to managerial-level staff in manufacturing SMEs located in Selangor. This study investigates technological (relative advantage, compatibility and cost), organizational (top management support), and environmental (competitive pressure and government support and policies) variables. Data analysis will be conducted using SPSS and SmartPLS to perform descriptive statistics, hypothesis testing and structural correlations analyses. The proposed conceptual model includes seven hypotheses linking TOE elements to AMT adoption and the relationship between AMT adoption and SME performance. The findings of this research are expected to offer valuable insights for academics, SME and policy makers by providing both a theoretical foundation and practical recommendations to AMT adoption. This study adds to the limited body of literature on AMT adoption in SMEs and calls for further empirical validation using quantitative and qualitative methods to expand knowledge and encourage technical development in the SME industry.