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Digital Transformation and Industry 4.0 and Its Impact on SME Business

Vesna Novaković

Vesna Novaković

Pan-European University ApeironBanja Luka, Bosnia and Herzegovina
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Novaković, Vesna
, 
Mirjana Milovanović

Mirjana Milovanović

Banja Luka CollegeBanja Luka, Bosnia and Herzegovina
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Milovanović, Mirjana
, 
Tanja Škorić

Tanja Škorić

Pan-European University ApeironBanja Luka, Bosnia and Herzegovina
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Škorić, Tanja
 and 
Vedran Šupuković

Vedran Šupuković

Pan-European University ApeironBanja Luka, Bosnia and Herzegovina
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Šupuković, Vedran
  
Jul 01, 2025
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Article Category: Preliminary report
Published Online: Jul 01, 2025
DOI: https://doi.org/10.32676/n.11.1.3
Keywords
© 2025 Vesna Novaković et al., published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Figure 1

A chronological overview of industrial revolutions through the lens of economic growthSource: Raheman (2022).
A chronological overview of industrial revolutions through the lens of economic growthSource: Raheman (2022).

Figure 2

Process, Product, People – 3 P's of Organizational SuccessSource: Author's illustration.
Process, Product, People – 3 P's of Organizational SuccessSource: Author's illustration.

Figure 3

Porters Model of Five ForcesSource: Author's illustration.
Porters Model of Five ForcesSource: Author's illustration.

Figure 4

A Triple Helix ConfigurationSource: Adjusted to Leydesdorff (2012).
A Triple Helix ConfigurationSource: Adjusted to Leydesdorff (2012).

The difference between the basic concepts

Terms Etymologies
Digitization The term “digitization” originates from the modern verb “digitize” a combination of “digit” and the suffix “-ize” which emerged around 1954 in the context of computer programming. It refers to the process of converting information into a digital format, particularly into binary digits, for use by computers (Merriam-Webster, n.d.).
Digitalization The term “digitalization” originates from the adjective “digital” which derives from the Latin digitus (meaning “finger” or “toe”) and later the modern Latin digitalis. It has been used in the context of “using numerical digits” since 1938, with more specific references to computers processing data in digitized form emerging around 1945, and its application to recording and broadcasting technologies appearing by 1960 (Online Etymology Dictionary, n.d.).
Transformation The term “transformation” originates from the Old French transformation (14th century) and directly from the Latin transformātiō (nominative), meaning “change of shape.” It is derived from the verb transformare, which combines trans (“across, beyond”) and formare (“to form”). While originally used in a transitive sense to denote changing the shape of something, its intransitive use meaning “to undergo a change of form” emerged around the 1590s (Online Etymology Dictionary, n.d.).
Digital transformation The concept of digital transformation is composed of two distinct terms: “digital” and “transformation”. The naming strategy that combines these words leverages the halo effect of each term's meaning in everyday language, thereby generating a new interpretation within scientific discourse (Dumez, 2011). However, the absence of a universally accepted, seminal definition of digital transformation in the academic literature has led to conceptual ambiguity. This confusion is compounded by the merging of two terms that carry strong but distinct connotations in both common and specialized usage. While the meaning of “transformation” is relatively stable and well-understood across both practitioner and academic contexts, the term “digital” introduces significant uncertainty. A review by Mertens et al. (2017) identified over 2,500 different terms associated with “digital” in recent scientific and financial publications spanning nearly every aspect of modern social and economic life.
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