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How Industry 4.0 is Reshaping the SME Landscape

Industry 4.0

AI, Augmented Reality, 5G, Cloud Services, Predictive Analytics, Machine Learning…the list of technologies that are disrupting industries, productivity and our lives today is infinite. In this article we will explore how the industrial revolution is progressing today and how it is impacting the business landscape. As we know, the fourth industrial revolution is digital and refers to the modern era of connectivity, advanced analytics, automation, and the connected technologies that have been altering global businesses for quite some time now. This wave of change began in the mid-2010s and has had important implications for operations and the future of business.

While the overall impact is clear, let’s understand more about how it has been changing the Small and Medium Enterprises (SME) landscape. As reported by Statista, about 45 percent of the digital services SMEs were in the cloud migration business in FY23 and an estimated 21 percent of it belonged to IT services. For SMEs, it has proved to be more evolutionary, rather than revolutionary, clearly helping unlock new possibilities.

Understanding Industry 4.0

Incepted in the manufacturing sector, the Industry 4.0 concept is slowly percolating across industries. Industry 4.0 is the next stage in the digitization and is propelled by disruptive developments such as the rise of data and connectivity, analytics, human-machine interaction, and robotics advancements.

As Mckinsey reports, before 2014, the search phrase “Industry 4.0” was virtually non-existent; however, by 2019, 68 percent of a McKinsey global study respondents regarded this concept as highly strategic. 70% stated their organizations were already testing or adopting new frameworks in this space.

Key Technologies in Industry 4.0 for SMEs

In the realm of Industry 4.0, several key technologies are reshaping the landscape for SMEs. Industry 4.0 takes the revolutionary technological disruption, such as the computer and internet, a step further. It aims at creating possibilities out of these four primary elements:

  • Data connectivity and computing power: Majorly combines cloud technology, the internet, blockchain, and sensors.
  • Analytics and intelligence: The potential to predict future events quickly with advanced analytics, machine learning, and artificial intelligence.
  • The human-machine compatibility: Virtual reality (VR) and Augmented Reality (AR), along with robotics and automation, create a seamless flow in labor-intensive processes reducing efforts while improving processing power.
  • Advanced engineering: Pushing the boundaries to engineer futuristic solutions with additive manufacturing, such as 3-D printing, along with renewable energy, nanoparticles
Benefits of Industry 4.0 for SMEs

A wide range of technical advancements, including the Industrial Internet of Things (IIoT), Machine Learning (ML), analytics, virtualization, and robots, have spurred the emergence of smart, automated industries in recent years. These technologies have reached their sweet spot with Indian SMEs. Implementing the right bundle of technologies in the right places invites benefits galore, such as:

  1. Developing new business approaches: Industry 4.0 enables novel business models and approaches, allowing SMEs to react quickly to changing market demands.
  2. Enhanced productivity and efficiency: Automation and artificial intelligence-driven processes increase productivity, allowing SMEs to create more with fewer resources.
  3. Superior production quality: SMEs can maintain higher product quality standards with real-time monitoring and predictive maintenance.
  4. Improved revenue and cost-effectiveness: SMEs can uncover chances for cost reduction and revenue growth by using data-driven decision-making.
Key Stumbling Blocks Encountered by SMEs

Technology is only half of the whole pie for the Industry 4.0 concept. It doesn’t end with integration; the real work starts after that. Following are the key areas that, if not given proper importance, may drive SMEs to fail while adopting these new technologies:

Upskilling the workforce: As disruptive technologies change employment needs, businesses must ensure that their employees are adequately equipped through upskilling and reskilling and then hire new individuals as needed. Employees that are upskilled gain new expertise to help them in their present employment. The challenging part is reskilling – workers need to be retrained with new abilities that will allow them to occupy other jobs inside their companies.

Strategic partnerships: Relevant collaborations and partnerships can aid SMEs in navigating the rocky terrain of Industry 4.0. However, forming these alliances might be difficult. Finding the right partners, negotiating contracts, and coordinating tactics can all take time and resources. SMEs may face competition for these partnerships, particularly in industries where the adoption of Industry 4.0 is highly competitive.

Accessing government support: Governments are critical in encouraging SMEs to adopt Industry 4.0. Help in the form of incentives, grants, or programs might enable quick implementation of these technologies. However, access to various types of assistance is frequently hampered by administrative paperwork and eligibility criteria. SMEs may find it challenging to manage these complexities while potentially missing out on crucial resources and incentives that could expedite their 4.0 journey.

A Strategic Approach to Navigate Industry 4.0

A well-planned implementation strategy is essential to dodge the obstacles and navigate the existing Industry 4.0. It is recommended that SMEs begin small, possibly by deploying one technology at a time while progressively growing up. This reduces interruption and enables better adaptation.

Tata Tele Business Services(TTBS) leverages breakthrough technologies in the domains of Cloud , SaaS and IaaS to carve out business solutions assisting SMEs with their transition to Industry 4.0. Re-imagining business processes through the innovative lenses of these different technologies, a partnership with the organization promises desired outcomes while helping businesses realize their true operations potential. TTBS is aggressively pursuing collaboration with industry associations, channel partners, and  customers to drive innovation, skill development, and knowledge sharing. Through these strategic partnerships it is collectively addressing challenges, leveraging emerging technologies, and creating a conducive environment for the growth of SMEs.

Smart and Connected

To sum up, recognizing the benefits, several SMEs are increasingly implementing Industry 4.0 technology to design ‘smart’ and connected business operations models, integrating it with the right creative touch. While there are many technologies, such as industrial IoT, AI, ML, Big Data, edge cloud, smart factory, 5G, and digital twins, transitioning to a new technological order would require a careful analysis of the goals while coming up with the best strategy to take it beyond paper. Also, organizations should consider the future as they assess the benefits of the fourth industrial revolution. Industry 5.0, which focuses on human-machine interactions, is more adaptive and sustainable and soon be knocking on our doors. So, let’s step up and prepare for the future!


Digital Transformation Insights in Manufacturing | Gartner

What is industry 4.0 and the Fourth Industrial Revolution? | McKinsey

EY Tech Trends Chapter VII: Industry 4.0 is redefining the ‘smart’ industry

Industry 4.0: The Beneficial Trends And Challenges For SMEs (

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