The Role of Industry 4.0 in Saudi Arabian Manufacturing SMEs during COVID-19 Pandemic

Abstract

Industry 4.0 has disrupted the manufacturing sector all across the globe. In Saudi Arabia, both the government and the manufacturing sector are aiming to implement Industry 4.0. The Saudi government wants to diversify its economy as one of Vision 2030 objectives by accelerating and enhancing different sectors' outcomes and participation, including the industrial sector, through different initiatives. On the other hand, by implementing Industry 4.0, the manufacturers aim to improve their production efficiency and quality and become flexible to emergent situations. The pandemic of Covid-19 has cast its shadow over the global economy; many companies were forced to halt their operations or close their businesses for good. Therefore, many businesses, including small and medium-sized, have realised that implementing Industry 4.0 might be vital for their business to survive. Here, this research intends to investigate the implementation of Industry 4.0 by Saudi Arabian small and medium-sized manufacturers during the pandemic. This research has used a mixed-method approach to collect quantitative and qualitative data from executives and decision-makers in small and medium-sized factories located in different regions in Saudi Arabia. The quantitative data were gathered through a questionnaire, where twenty-eight respondents have completed the survey. Regarding the qualitative data, three factories’ executives have participated in a semi-structured interview. The obtained findings showed that manufacturing SMEs in Saudi Arabia are already implementing Industry 4.0. In general, the level of awareness about the importance and benefits which these technologies contribute is high. Moreover, the findings showed that by maintaining production and providing remote access to the factories, Industry 4.0 had diminished the economic impact caused by the pandemic. Hence, the manufacturers 4 are considering further investment in the future. Implementation challenges such as financial capacity and knowledge were considered barriers against adopting Industry 4.0 by manufacturing SMEs. Thus, this research has several implications where policymakers and companies’ executives can leverage the findings to achieve the digital transformation in the industrial sector and make Saudi Arabia among the pioneers in Industry 4.0.