Can Industry 4.0 Technologies Offer a Solution for the Sustainability of SMEs?: Case Studies From Turkey

Introduction

Industrial revolutions are events that enable the production of goods and services to be produced faster, cheaper, and in larger quantities, creating effects to improve the quality of life of people (Carvalho, 2017: 9). Industry 4.0, the fourth industrial revolution, is a continuous change and transformation process fed by a transformation approach (Dengiz, 2017: 39). The most important feature that distinguishes Industry 4.0 from other industrial revolutions is that information and communication technologies play a more prominent role than ever before in production and the substitution of labour with machines is in question (Günaydın, 2018: 76). Industry 4.0 is a term used to describe the new industrial revolution that emphasizes automation, innovation, big data, cyber-physical systems, processes and people (Javaid, Haleem, Singh, Rab, & Suman, 2021: 3).

However, the fourth industrial revolution is not limited to smart and connected machines and systems but has a broader scope. In this period, the interactions of technologies that develop simultaneously in areas ranging from gene sequencing to nanotechnology, from renewable resources to quantum computing (Schwab, 2016: 12), affect all sectors and life, from producing goods and services to public services. Industry 4.0, which affects the competitiveness of businesses, is also of great importance in terms of the position of countries in the global economy. For this reason, programs are implemented in developed and developing countries to disseminate Industry 4.0 concepts and technologies in local companies. However, it is an important requirement to develop different approaches to analyzing and structuring digital technologies in developing countries compared to developed countries (Dalenogare, Benitez, Ayala, & Frank, 2018: 383-384).

The fourth industrial revolution has four main effects on business: 1. Customer expectations are shifting, 2. products are being enhanced, 3. Companies forge new partnerships as they learn the importance of new forms of collaboration, 4. Operating models are evolving into new digital models (Schwab, 2016: 54). These effects should be understood by all stakeholders of the business world and translated into action plans. The digital transformation that takes place with Industry 4.0 enables companies to establish closer coordination with all stakeholders throughout the value creation process and allows them to respond faster to customers by identifying the change in customer needs faster (Schulte, 2016: 11). The digital transformation is based on the uninterrupted flow of products and information throughout the supply chain, and to ensure this, companies need to be digitized in all relevant areas of the value chain (Bogner, Voelklein, Schroedel, & Franke, 2016: 16).

While globalization provides great opportunities for companies to expand the market in all sectors, it also creates pressure on cost and speed due to competitive conditions. Although this pressure leads some companies to reduce costs by sacrificing quality, this action causes a loss of customers in the long run. These business-based losses create a disadvantageous position for countries, and low-cost, poor-quality products cause job losses in global supply chains. For this reason, it should be accepted that the main factor that increases the competitiveness of countries in the face of the challenges brought by globalization is to develop technologies that can produce low-cost and high-quality products (Metin, 2019: 1). In this direction, country-based programs should be designed for the effective use of Industry 4.0 tools.

Digital transformation tools within the scope of the fourth industrial revolution continue to improve with changing needs and is an issue that maintains its importance. The fact that these technologies have an important place in the sustainability of businesses is a primary motivation for this study. Similarly, it is critical for SMEs, which have an important place in the national and global economy, to protect their assets in this process. In the 2021 report of the World Trade Organization, referring to the data of 2016, it is stated that SMEs represent more than 90% of the business volume, more than 60% of the employment, and 55% of the GDP in developed economies and make significant contributions to international trade (WTO, 2021: 138). In line with the importance of Industry 4.0 and the sustainability of SMEs, this study seeks answers to the following questions.