Digital Transformation and Industry 4.0 and Its Impact on SME Business

This research addresses the following guiding question: Do Industry 4.0 and digital transformation inherently drive the progress of small and medium-sized enterprises (SMEs)? Starting from this assumption, the authors proposed a hypothesis suggesting that digital transformation has a direct impact on improving innovation and operational efficiency within small and medium-sized enterprises. The focus of this study is the digital transformation and Industry 4.0 adoption among SMEs in the Republic of Srpska, one of the two entities of Bosnia and Herzegovina. The study combined desk-based literature analysis with a practical component that involved organizing panel discussions featuring representatives from all three pillars of the Triple Helix model: representatives of the academic community, business companies, and state institutions. The empirical research was organized in the period from November 2023, to June 2024. Findings from the research indicate that digital transformation plays a significant role in enhancing business processes and fostering the growth of small and medium-sized enterprises, while also highlighting the importance of effectively motivating employees to embrace organizational change. Organizational culture, employees who are affirmative in acceptance changes allow them to change indeed events. Digital transformation by itself represents tools that can improve business, but employees are key part of changes.