The study is set in the 21st century business landscape, where executives emphasize productivity and value addition in a highly competitive market. IR 4.0 is presented as a solution to optimize business operations, decision-making, and communication through technologies such as robotics, big data analytics, IoT, cyber-physical systems, and virtual networks. The Fourth Industrial Revolution is believed to hold positive impacts not only for large-scale businesses but also for SMEs. SMEs in developing economies, including Malaysia, are striving to adopt IR 4.0 to enhance their business ecosystem and remain competitive. However, the state of adoption IR 4.0 among manufacturing SMEs in Malaysia remained unknown. Hence, the study's objective is to investigate the impacts and challenges of IR 4.0 adoption among SMEs in Malaysia. The chosen research methodology is qualitative, employing face-to-face interviews with 20 manufacturing SME owners in Johor. Purposive sampling is used to select participants. The results of the study indicate that manufacturing SMEs owners in Malaysia recognize the positive impacts of adopting IR 4.0 on their businesses, the economy, and society as a whole. However, the main challenges they face are internal aspects of their companies and their employees. These challenges include financial constraints (cost) associated with adopting IR 4.0 technologies and employees lacking the necessary knowledge and skills to work with such technologies. The study suggests that the government should take more actions to promote the adoption of IR 4.0 at the grassroots level. This could involve providing technical, financial, and consultative support to SMEs to overcome the obstacles they face. Additionally, preparing a skilled workforce is essential. The education system should incorporate relevant skills and knowledge related to big data analytics, machine learning, robotics, and business model transformation in alignment with IR 4.0 technology.
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