Unveiling the path to the fourth industrial revolution: Exploring technology adoption and firm-level barriers

Technology adoption is an important driving force for economic growth. This study investigates the determinants of technology adoption among firms in Vietnam using nationally representative enterprise survey data focusing on prominent technology in the Fourth Industrial Revolution (4IR). It focuses on three main barriers to adoption – financial constraints, human resource limitations, and perceived practicality – and assesses their empirical relevance towards different measurements of technology adoption levels. Our analysis employs logit, ordered logit, and Poisson regressions, complemented by inverse probability weighting with regression adjustment to represent selection on observables. The findings indicate that financial capacity does not significantly influence firms' adoption decisions. In contrast, human resource factors, especially firms' information technology capability, play a crucial role by underscoring the importance of digital skills in the workforce. Additionally, firms' perceptions of the practical value of technologies, particularly regarding competitiveness and profitability, are strongly associated with higher adoption levels. The findings offer policy-relevant insights for promoting effective 4IR technology adoption in developing economies. • This study examines firm-level technology adoption in Industry 4.0, focusing on finance, human resources, and practical implementation. • Financial capacity does not significantly influence adoption decisions, while human resource barriers are crucial. • Developing digital skills in the workforce is vital for overcoming human resource barriers. • Firms' perceptions of technology practicality positively correlate with higher adoption levels.