INDUSTRY 4.0 AND PRODUCTIVITY GROWTH IN INDIAN MANUFACTURING INNOVATION AND COMPETITIVENESS OF MSMES

Abstract

Industry 4.0 is transforming modern manufacturing through the integration of advanced technologies such as Artificial Intelligence, the Internet of Things, Big Data Analytics, Cloud Computing, Robotics, and Cyber-Physical Systems. This study examines the impact of Industry 4.0 adoption on productivity growth, operational efficiency, innovation capability, and competitiveness among Indian manufacturing Micro, Small and Medium Enterprises (MSMEs). Primary data were collected from 250 manufacturing MSMEs and analysed using descriptive statistics, Pearson correlation, multiple regression analysis, ANOVA, and hypothesis testing. The findings reveal that Industry 4.0 adoption has a significant positive effect on productivity growth (r = 0.742, p < 0.001), operational efficiency (r = 0.718, p < 0.001), innovation capability (β = 0.768, p < 0.001), and competitiveness (β = 0.744, p < 0.001). Financial constraints, inadequate digital infrastructure, limited technological readiness, and shortages of skilled human resources were identified as major barriers to adoption. Government initiatives, including Make in India, Digital India, Atmanirbhar Bharat, and the Production Linked Incentive Scheme, were found to support digital transformation. The study concludes that Industry 4.0 adoption significantly enhances the performance and competitiveness of Indian manufacturing MSMEs, while effective government support can help overcome key barriers to digital transformation.

Keywords

industry 4.0, manufacturing MSMEs, productivity growth, operational efficiency, competitiveness, artificial intelligence, digital transformation, smart manufacturing.

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To cite this article

Dhanya, M. (2026). Industry 4.0 and Productivity Growth in Indian Manufacturing Innovation and Competitiveness of MSMES. John Foundation Journal of EduSpark, 8(2), 89-112.