Owing to innovations in digital smart technologies such as IoT, big data, artificial intelligence, and so on, many machines and devices have become automated, smaller, and smarter. These digital smart technologies powered by innovative sensors and AI for automation have significant impact on manufacturing technologies and are at the core of 4th industrial revolution, and these sensing and AI-powered technologies can enable survival and prosperity of small and medium sized manufacturing enterprises. In this talk, innovative sensor fabrication and development and use of machine learning for various applications are discussed. A contact-based sound sensor has been developed and used to listen to machines as if an experienced operator is listening to the machine in order to monitor machine status and conditions using artificial intelligence. After creating artificial neural network (ANN) from sound sensor input, the acoustic signals were featured with MEL frequency spectrogram, then human’s decision from sensory information was implemented as ANN like counting finished parts. Also, immersive and interactive Cyber-Physical System (I2CPS) was developed to enable human skill teaching and interaction with machines or robots for effective automation in manufacturing applications. The framework also enables better human involvement, training, and remote operation.