Abstract
Industry 5.0 was introduced in Germany, pursuing the idea of creating smart factories so that emerging technologies such as the internet of things, cloud computing, robotics systems, virtual reality, big data analytics, and additive manufacturing could produce human–equipment interfaces and cyber-physical systems that generate environmental, economic, and socially sustainable manufacturing systems. Therefore, this study effort to evolve a model for the adoption of the 5IR among Malaysian manufacturing SMEs for sustainable growth. This study proposed a research model based on the theory of innovation diffusion (DOI) and TOE. The result of this study can contribute to the realization of the Industry policy. The model itself can provide guidance to industry and policymakers to promote emerging markets growth. The study is expected to benefit regulators and the business ecosystem in understanding the challenges of implementing 5IR in Malaysia and, most importantly, for them to formulate intervention processes and programs for successful adoption.
TopIntroduction
Among the most influential subjects in academic-related fields are known to be the Industrial Revolution, which brought about Industry 5.0 (Chiarello et al., 2018). The recent decade has led business competition towards dynamic and hypercompetitive strategies to manage rapid-changing business environment. Digitalization and globalization are leading organizations not only to adopt the technology but also to rethink their business models (Gusakov, 2020). To deal with this business scenario, business models are relying on strategic innovation as a solution. Further, the emergence of concepts like industry 5.0 poses new dimensions for strategic decisions, particularly for emerging markets. The use of the Industry revolution has been growing rapidly, and numerous companies such as Mckinsey, HP, IBM, Apple, and Google are injecting different dimensions of the Industry revolution as long-term strategies (Knight, Daymond, & Paroutis, 2020).
The concept of industry 5.0 developed from four transition phases. First, industry 1.0, which was focused on manual labor and machine tools. Second, industry 2.0, introduces electricity in manufacturing industries for mass production. Third, in industry 3.0, manufacturers began to incorporate digital technology and automation. Fourth, the emergence of the fourth industrial revolution also known as industry 4.0 has provided a new dimension for business competitiveness such as the internet of things (IoT) and machine learning. Likewise, Industry 5.0 has given organizational competitiveness a new dimension that is more tied to human technology, the environment, ethics, and sustainability to link innovative manufacturing and lower operational costs of enterprises for emerging markets.
In addition, the basic idea of Industry 5.0 is not limited to a specific “industry”. That’s why IR 5.0 can be applied to a wider population than IR4.0. Therefore, for the implication of Industry 5.0 for sustainable growth, we need to consider the broad perspective of several industries. Despite the competitive advantage that Industry 5.0 provides to its adopters, it was reported that Malaysia has been lagging in its adoption process. As of the third quarter of 2019, the national adoption rate for Industry 5.0 was reported to be 15–20%, mainly by tier-one companies, even though it had been almost a year since Malaysia launched its National Policy on Industry 4.0, also known as the Industry4WRD (Bernama, 2019). Only 2.7% of SMEs were reported to be implementing Industry 5.0 initiatives in some production-related processes, and the other 75% had not taken specific measures to embark on Industry 5.0 initiatives. Other reasons contributing to the slow adoption rate were a lack of knowledge about Industry 5.0, a lack of knowledge about automation, and a lack of desire to change. This situation supports the findings of Owen and Darkwa (2000) and Wolcott et al. (2008) that SMEs cannot recognize the potential benefits that ICT and technology adoption can provide to the business (Racheal, 2020; Star, 2019).
Key Terms in this Chapter
Technology Readiness: This refers to the physical assets and human resource skills to adopt new technology such as IR 5.0.
Adoption Cost: This is defined as the combination of initial cost and cost of training to use new technology.
TOE Model: The technological, organizational, and environmental (TOE) factors play important roles in the adoption of technological innovation like IR 5.0.
Competitive Pressure: This refers to the degree of pressure felt by competitors within the industry.
IR 5.0: Industry 5.0 has given organizations a new competitive edge that is more oriented toward the internet of things (IoT), machine learning, human technology, environment, ethics, and sustainability to link smart production and lower operational costs for the companies.
Relative Advantages: These are anticipated benefits that a firm can get by adopting IR 4.0.
Top Management Support: This is defined as the motivation, involvement, and encouragement given by top managers for innovation adoption.