Abstract
Industry 4.0 maturity and readiness
Small and medium-sized enterprises (SMEs) tend to face greater external uncertainty and evolve more slowly than larger businesses due to limited knowledge, human and financial resources. Thus, from the outset, many SMEs experience reduced ability and willingness to adopt innovative technologies.
SMEs tend to rate relatively low in terms of Industry 4.0 maturity and readiness; moreover, the step from level 0 (novice) to level 1 (advanced beginner) is much steeper than transitions between other levels. This signals the need for a concerted shift in individual mindset and organisational culture.
International research shows that SMEs are interested in the capacity of Industry 4.0 to drive cost reductions and improved time to market, and to address human resource issues such as labour shortages. However organisational barriers exist relating to economics (e.g. lack of monetary resources and clearly defined economic benefit); culture (e.g. lack of trust between partners, low-level management support/acceptance by employees, risk aversion); competency/resources (e.g. low level skills/technical knowledge, coordination effort, factory layout constraints); legal reasons (e.g. data security, bureaucracy, restrictive laws and regulations); technical reasons (concerns about system reliability, difficult interoperability/compatibility); and implementation processes (e.g. required time and changes, difficulties in demand forecasting).
Australian research indicates that SMEs struggle with Industry 4.0 transformation due to lack of skills (especially non-technical skills such as workforce readiness for change) and low-level digital capability to manage data for internal and external operations. External collaboration and involvement in Industry 4.0 skills and knowledge training and research is recommended.
SME-University engagement
Developing networks and collaborating with universities can be an effective way to advance SME Industry 4.0 maturity. However, there are several factors to consider in relation to industry readiness and motivation to engage with universities.
Organisational characteristics that serve as necessary precursors for SMEs to engage with universities include readiness (identified need for change in the organisation, willingness to consider new ideas and how these will work in practice); importance (recognising the potential impact of making change including risks and opportunities); and confidence (belief in the ability to make prudent decisions and having the capability to successfully implement them).
Industry drivers for engagement with university include necessity (e.g. meeting government and legislative policy); reciprocity (e.g. ability to attract funding for projects, accessing students for internships/hiring); efficiency (e.g. commercialising for financial benefit, achieving cost savings, improved competitiveness); and stability (e.g. business growth, access to new knowledge, solutions to problems).
Potential benefits of university-industry engagement can be economic (more cost effective than internal R&D, access to public grants and funding, improved products and services); institutional (exposure to leading edge technologies, access to wider network of research expertise); and social (reputational advantage and credibility, stimulating and fulfilling). However, these benefits need to be weighed against potential risks, for example reduced control over commercial information and conflict with organisational mission.
SME-University engagement in the context of Industry 4.0
SME engagement with Industry 4.0 technology builds across a series of stages, progressing from skill and knowledge acquisition to persuasion about the value of the technology, to making the decision to proceed, to adopting the technology, culminating in routine use of technology.
The ‘4E’ framework proposed by Farkas, Jette, Tennstedt, Hayley, and Quinn (2003) provides four dissemination and utilisation strategies designed to progress knowledge acquisition into the realm of practice (knowledge translation/utilisation). These strategies outline goals and methods relating to exposure, experience, expertise and embedding a new approach such as Industry 4.0. Effective dissemination methods need to be designed with the end-user in mind, preferably with input from the end-user to ensure that outcomes will address ‘adopters’ needs. Research indicates that hands-on experience with technology through trialling in a technically supported environment is a key facilitator for technology adoption.
Mechanisms for industry engagement, collaboration and knowledge transfer with external stakeholders/universities can be formal (e.g. contract agreements, venture investment, technology licensing, patent purchase) or informal (e.g. trade fairs, conferences, seminars/workshops, sharing facilities). While both forms of interaction are valuable, research has shown informal external collaboration to be of particular benefit in enhancing the innovation performance of hi-tech manufacturing SMEs.
AITI-SME Industry 4.0 engagement
The ongoing collaboration between the Australian Industrial Transformation Institute (AITI) and BAE Systems Australia – Maritime (BAESAM), with support from the Innovative Manufacturing Cooperative Research Centre (IMCRC), has provided a broad range of industry stakeholders with the opportunity to trial and experience Industry 4.0 enabling technologies, encouraging connections, building industry and research networks and contributing to an Industry 4.0 ecosystem where knowledge is fluid and iterative, shaped by each interaction of communicator and receiver. Central to the ecosystem is the notion of market pull and technology push, with universities exploring the challenges and opportunities facing enterprises in either state and serving as a conduit for bridging gaps and problem solving.
AITI engaged with industry in both onsite (e.g. Pilot Factory of the Future at Line Zero, Tonsley Innovation District, research trials) and outreach activities (e.g. site visits to industry) to facilitate the adoption and diffusion of Industry 4.0 in manufacturing. This was complemented by a dissemination strategy of both traditional researcher (e.g. journal articles and conference presentations) and non-researcher output methods (e.g. industry briefs, videos). Increased future engagement and collaboration with industry through workshops and seminars and enterprise-specific projects is likely to improve industry expertise and embed Industry 4.0 technology in Australian SMEs.
The formal collaboration between AITI and BAESAM, including development of the Pilot Factory of the Future at Line Zero and work undertaken from research funding through the IMCRC, encouraged industry engagement by creating Industry 4.0 technology ‘exposure’ and ‘experience’ opportunities supporting knowledge dissemination. These opportunities boosted technology capabilities, highlighting their potential for supporting the manufacturing workforce and business objectives.
Opportunities to collaborate with SMEs more formally have been granted through State Government funding ($4 million) and investment from Flinders University ($2 million) to deliver a Manufacturing Growth Accelerator program from 2023.
Small and medium-sized enterprises (SMEs) tend to face greater external uncertainty and evolve more slowly than larger businesses due to limited knowledge, human and financial resources. Thus, from the outset, many SMEs experience reduced ability and willingness to adopt innovative technologies.
SMEs tend to rate relatively low in terms of Industry 4.0 maturity and readiness; moreover, the step from level 0 (novice) to level 1 (advanced beginner) is much steeper than transitions between other levels. This signals the need for a concerted shift in individual mindset and organisational culture.
International research shows that SMEs are interested in the capacity of Industry 4.0 to drive cost reductions and improved time to market, and to address human resource issues such as labour shortages. However organisational barriers exist relating to economics (e.g. lack of monetary resources and clearly defined economic benefit); culture (e.g. lack of trust between partners, low-level management support/acceptance by employees, risk aversion); competency/resources (e.g. low level skills/technical knowledge, coordination effort, factory layout constraints); legal reasons (e.g. data security, bureaucracy, restrictive laws and regulations); technical reasons (concerns about system reliability, difficult interoperability/compatibility); and implementation processes (e.g. required time and changes, difficulties in demand forecasting).
Australian research indicates that SMEs struggle with Industry 4.0 transformation due to lack of skills (especially non-technical skills such as workforce readiness for change) and low-level digital capability to manage data for internal and external operations. External collaboration and involvement in Industry 4.0 skills and knowledge training and research is recommended.
SME-University engagement
Developing networks and collaborating with universities can be an effective way to advance SME Industry 4.0 maturity. However, there are several factors to consider in relation to industry readiness and motivation to engage with universities.
Organisational characteristics that serve as necessary precursors for SMEs to engage with universities include readiness (identified need for change in the organisation, willingness to consider new ideas and how these will work in practice); importance (recognising the potential impact of making change including risks and opportunities); and confidence (belief in the ability to make prudent decisions and having the capability to successfully implement them).
Industry drivers for engagement with university include necessity (e.g. meeting government and legislative policy); reciprocity (e.g. ability to attract funding for projects, accessing students for internships/hiring); efficiency (e.g. commercialising for financial benefit, achieving cost savings, improved competitiveness); and stability (e.g. business growth, access to new knowledge, solutions to problems).
Potential benefits of university-industry engagement can be economic (more cost effective than internal R&D, access to public grants and funding, improved products and services); institutional (exposure to leading edge technologies, access to wider network of research expertise); and social (reputational advantage and credibility, stimulating and fulfilling). However, these benefits need to be weighed against potential risks, for example reduced control over commercial information and conflict with organisational mission.
SME-University engagement in the context of Industry 4.0
SME engagement with Industry 4.0 technology builds across a series of stages, progressing from skill and knowledge acquisition to persuasion about the value of the technology, to making the decision to proceed, to adopting the technology, culminating in routine use of technology.
The ‘4E’ framework proposed by Farkas, Jette, Tennstedt, Hayley, and Quinn (2003) provides four dissemination and utilisation strategies designed to progress knowledge acquisition into the realm of practice (knowledge translation/utilisation). These strategies outline goals and methods relating to exposure, experience, expertise and embedding a new approach such as Industry 4.0. Effective dissemination methods need to be designed with the end-user in mind, preferably with input from the end-user to ensure that outcomes will address ‘adopters’ needs. Research indicates that hands-on experience with technology through trialling in a technically supported environment is a key facilitator for technology adoption.
Mechanisms for industry engagement, collaboration and knowledge transfer with external stakeholders/universities can be formal (e.g. contract agreements, venture investment, technology licensing, patent purchase) or informal (e.g. trade fairs, conferences, seminars/workshops, sharing facilities). While both forms of interaction are valuable, research has shown informal external collaboration to be of particular benefit in enhancing the innovation performance of hi-tech manufacturing SMEs.
AITI-SME Industry 4.0 engagement
The ongoing collaboration between the Australian Industrial Transformation Institute (AITI) and BAE Systems Australia – Maritime (BAESAM), with support from the Innovative Manufacturing Cooperative Research Centre (IMCRC), has provided a broad range of industry stakeholders with the opportunity to trial and experience Industry 4.0 enabling technologies, encouraging connections, building industry and research networks and contributing to an Industry 4.0 ecosystem where knowledge is fluid and iterative, shaped by each interaction of communicator and receiver. Central to the ecosystem is the notion of market pull and technology push, with universities exploring the challenges and opportunities facing enterprises in either state and serving as a conduit for bridging gaps and problem solving.
AITI engaged with industry in both onsite (e.g. Pilot Factory of the Future at Line Zero, Tonsley Innovation District, research trials) and outreach activities (e.g. site visits to industry) to facilitate the adoption and diffusion of Industry 4.0 in manufacturing. This was complemented by a dissemination strategy of both traditional researcher (e.g. journal articles and conference presentations) and non-researcher output methods (e.g. industry briefs, videos). Increased future engagement and collaboration with industry through workshops and seminars and enterprise-specific projects is likely to improve industry expertise and embed Industry 4.0 technology in Australian SMEs.
The formal collaboration between AITI and BAESAM, including development of the Pilot Factory of the Future at Line Zero and work undertaken from research funding through the IMCRC, encouraged industry engagement by creating Industry 4.0 technology ‘exposure’ and ‘experience’ opportunities supporting knowledge dissemination. These opportunities boosted technology capabilities, highlighting their potential for supporting the manufacturing workforce and business objectives.
Opportunities to collaborate with SMEs more formally have been granted through State Government funding ($4 million) and investment from Flinders University ($2 million) to deliver a Manufacturing Growth Accelerator program from 2023.
Original language | English |
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Place of Publication | Clovelly Park, South Australia |
Publisher | Flinders University |
Commissioning body | Innovative Manufacturing Collaborative Research Centre |
Number of pages | 28 |
ISBN (Print) | 978-0-6452384-4-0 |
Publication status | Published - Oct 2022 |
Keywords
- Small and medium sized enterprise (SMES)
- Industry 4.0 technology
- Collaboration
- Universities