Small ruminant (sheep and goat) production of meat and milk is undertaken in diverse topographical and climatic environments and the systems range from extensive to intensive. This could lead to different types of welfare compromise, which need to be managed. Implementing Precision Livestock Farming (PLF) and other new or innovative technologies could help to manage or monitor animal welfare. This paper explores such opportunities, seeking to identify promising aspects of PLF that may allow improved management of welfare for small ruminants using literature search (2 reviews), workshops in 9 countries (France, Greece, Ireland, Israel, Italy, Norway, Romania, Spain, and the United Kingdom) with 254 stakeholders, and panels with 52 experts. An investigation of the main welfare challenges that may affect sheep and goats across the different management systems in Europe was undertaken, followed by a prioritisation of animal welfare issues obtained in the 9 countries. This suggested that disease and health issues, feed access and undernutrition/malnutrition, maternal behaviour/offspring losses, environmental stressors and issues with agonistic behavioural interactions were important welfare concerns. These welfare issues and their indicators (37 for sheep, 25 for goats) were categorised into four broad welfare indicator categories: weight loss or change in body state (BWC), behavioural change (BC), milk yield and quality (MY), and environmental indicators (Evt). In parallel, 24 potential PLF and innovative technologies (8 for BWC; 10 for BC; 4 for MY; 6 for Evt) that could be relevant to monitor these broad welfare indicator categories and provide novel approaches to manage and monitor welfare have been identified. Some technologies had the capacity to monitor more than one broad indicator. Out of the 24 technologies, only 12 were animal-based sensors, or that could monitor the animal individually. One alternative could be to incorporate a risk management approach to welfare, using aspects of environmental stress. This could provide an early warning system for the potential risks of animal welfare compromise and alert farmers to the need to implement mitigation actions.