Industry 4.0 (I4.0) enables companies to become more efficient and competitive, yet research often centers on larger businesses in industrialized nations. The potential of microenterprises (MEs), which absorb up to 70% of the total labor force in low and middle income countries, remains understudied. This paper investigates the readiness of MEs in low-resource settings to adopt I4.0 and explores the necessary conditions for successful adoption. Through qualitative interviews and observations conducted in manufacturing MEs in Oman, the study analyzes existing production processes, the types of machines currently used, and the workforce’s skills and experiences to identify deficiencies potentially impeding the path towards digitalization and I4.0. Key findings reveal that many businesses lacking basic automated tools and having limited capital, effectively operate at Industry 2.0 levels. The research highlights the role of cost-effective open source machine tools and enhancing manual machines with open source ‘Internet of Things’ technologies. These solutions aim to enhance readiness and transform basic production into intelligent, interconnected systems by lowering the threshold to access. By addressing the prerequisites for I4.0 adoption, this paper contributes to advancing industrial capabilities in the global south and offers practical insights into empowering MEs through open-source technologies.