Research has been conducted on the technology plans of manufacturing SMEs.
The vast majority of companies want and plan technological developments and see digitalization as key to increasing competitiveness, but the adoption of automation and Industry 4.0 solutions is still low, according to a recent study that surveyed decision-makers at Hungarian small and medium-sized enterprises (SMEs) manufacturing various products about their development plans.
Digitalization brings increased efficiency and cost optimization
Almost all decision-makers participating in the survey (94%) consider technological innovations important to some extent in maintaining their competitiveness, while every second respondent considers them particularly important. They primarily see their role in increasing efficiency (61%), but every second company also considers them important in achieving good quality, cost optimization, and speed.
Although most companies place their own company at the same technological level as their competitors, with the exception of companies with revenues above HUF 500 million, there are more companies that feel they are in a weaker position compared to their competitors. This subjective assessment is reinforced by the fact that only 14 percent of respondents stated that their manufacturing processes are fully or fairly well automated. Half of the companies considered themselves to be in a weak position in this respect, and one-third of these companies, while 40 percent of companies with annual revenues below HUF 300 million, have no automation in manufacturing at all.
The use of Industry 4.0 solutions therefore also shows a limited picture: 67 percent of respondents do not use such technology at all. Those who do primarily automate manufacturing or use IoT devices and industrial robots. In this respect, companies with revenues above HUF 500 million reported significantly better results. Half of the companies in this category already use Industry 4.0 solutions, also mostly in the areas of automation and robotization.
Illustration: automated manufacturing.
Not just wishes, but plans as well
The vast majority of the surveyed SMEs (86%) plan some kind of technological development in the next 3–5 years. A further 12 percent would like to make developments but do not plan to implement such innovations in the coming years due to a lack of resources.
Plans and wishes also mostly coincide in terms of the purpose of developments: technology modernization combined with capacity expansion and increasing the knowledge level of the workforce are at the top of the list, with 44 and 34 percent of respondents respectively selecting these as planned options. 42 percent of companies would also like to implement energy-related developments (e.g. increasing energy efficiency, renewable energy generation, vehicle fleet electrification), while only 32 percent stated that they actually plan to implement these within the next 3–5 years.
The companies expect a quick return on their developments: 50 percent want to recoup their investment within 3 years at the latest, and only 10 percent would accept a payback period longer than 5 years. In line with this, they predict that the use of technological innovations will increase performance/efficiency (61%), increase revenues (60%), reduce costs (54%), and strengthen their market position (51%).
At the same time, respondents consider technological developments important not only because of their financial consequences: employee retention (53%), the creation of new jobs (37%), and increasing employee motivation (37%) were also mentioned among the benefits of investments. 40 percent of respondents mentioned that they expect existing employees will need retraining or further training. However, this figure was significantly lower (13%) among companies with revenues above HUF 500 million.
What companies are still waiting for
The biggest obstacle to technological developments among survey participants is primarily a lack of internal resources: for more than half of the companies, a lack of capital is the main barrier, while many (40%) also face problems due to labor shortages. In addition, 48 percent of respondents listed access to external financial resources among the difficulties, with a lack of funding opportunities hindering nearly one-third of companies.
In contrast, a lack of knowledge or expertise is considered a barrier by only one in ten companies, while generational conflicts arise in only 7 percent of them. However, external environmental factors such as market prospects, the regulatory environment, macroeconomic stability, or a lack of demand prompt 29 percent of respondents to adopt a wait-and-see approach.
About the research
The survey was conducted in April 2025 on behalf of Siemens Zrt., involving decision-makers from 100 small and medium-sized manufacturing enterprises in Hungary. Data collection was conducted by telephone, and the aim of the research was to map intentions, barriers, and opportunities related to technological development.