Digitizing SMEs in the EU: A scalable model for retrofitting machinery to Industry 4.0

Abstract

Small and Medium-sized Enterprises (SMEs) have faced significant economic challenges since the COVID-19 pandemic, compounded by high inflation, rising energy costs, and the cessation of government financial support. War-related disruptions in Europe have further exacerbated these issues. As the backbone of the European economy, SMEs must embrace Industry 4.0 to remain competitive. However, many lack the resources or expertise to adopt smart technologies. This article proposes a cost-effective, scalable model to guide SMEs in transitioning towards Industry 4.0 by retrofitting existing machinery. By assessing machinery readiness and identifying critical areas for digitization, the model enables targeted investments that optimize production and reduce costs. A gradual, tailored approach ensures alignment with SMEs’ financial and technical capacities, fostering modernization and long-term growth. The successful implementation of the AFB production system highlights the feasibility of retrofitting existing systems to meet modern manufacturing demands.