Industry 4.0 Implementation in SMES and the Differentiated Impact of Open Innovation by Sector

This study examines the differential effects of inbound and outbound open innovation on the implementation of Industry 4.0 technologies in small and medium-sized enterprises, with a focus on the moderating role of industry type (manufacturing versus services). Drawing on survey data from 518 Chilean SMEs, we apply partial least squares structural equation modeling and multi-group analysis to examine the impact of open innovation strategies on the adoption of five key I4.0 technologies: big data, artificial intelligence, additive manufacturing, digital platforms, and simulation tools. Results show that both inbound and outbound open innovation positively influence the implementation of I4.0 technologies across the overall sample. However, sectoral differences emerge in inbound innovation, which is significantly more effective in service firms, while outbound innovation exerts a more substantial influence in manufacturing SMEs. These findings highlight the importance of tailoring digital transformation strategies to sector-specific characteristics and suggest that open innovation plays a critical role in overcoming resource and knowledge constraints in emerging economies. The study offers theoretical insights into the interplay between innovation modes and technological adoption, providing practical recommendations for SME managers and policymakers seeking to foster inclusive and effective digital transformation within the SME sector.