Despite the potential of Industry 4.0 and the increasing interest from the manufacturing industry, the adoption of Industry 4.0 is still lacking behind in SMEs in the manufacturing industry. In this paper, we explore why this is happening. The research is based on a multiple case study of 24 small and medium sized Danish manufacturing companies, which have all started their Industry 4.0 journey. We analyze the case data from the perspective of dynamic capabilities. Our findings show that the companies experience multiple barriers related to the sensing and seizing capabilities, which hinder their engagement with Industry 4.0. The lack of capabilities to sense and seize opportunities in relation to Industry 4.0 leads us to question whether manufacturers understand Industry 4.0 as a strategic asset or a set of disconnected technology improvements which may bring benefits to the operations, but do not utilize the systemic potential of Industry 4.0.