The Synergy Between Industry 5.0 and Circular Economy for Sustainable Performance in the Chinese Manufacturing Industry

Muhammad Noman Shafique, Umar Adeel and Ammar Rashid ()
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Muhammad Noman Shafique: CESAM—Centre for Environmental and Marine Studies, Department of Environment and Planning, University of Aveiro, 3810-193 Aveiro, Portugal
Umar Adeel: Department of Computer Science and Engineering, American University of Ras al Khaimah, Ras al Khaimah 72603, United Arab Emirates
Ammar Rashid: Department of IT, College of Engineering and IT, Ajman University, Ajman P.O. Box 346, United Arab Emirates

Sustainability, 2024, vol. 16, issue 22, 1-17

Abstract: The industrial shift from Industry 4.0 to Industry 5.0 has transformed organizational thinking, moving the focus from purely technological implementation to a more human-centered approach. The current study has focused on the Industry 5.0 technological capabilities to bring into circular economy practices aligned with sustainable development goals, aiming to enhance sustainable performance. Moreover, the resource-based theory has grounded the development of the comprehensive framework on Industry 5.0 technological capabilities (artificial intelligence capabilities, big data analytical capabilities, Internet of Things capabilities, machine learning capabilities, and blockchain technology capabilities) and circular economy practices (eco-design, management system, and investment recovery) to achieve sustainable performance (environmental performance, social performance, and economic performance). Data have been collected from 179 respondents from the Chinese manufacturing industry. Additionally, data have been analyzed using the structural equation modeling technique. The results showed that Industry 5.0 technological capabilities directly affect sustainable performance. Moreover, circular economy practices played a dual, moderating, and mediating role between Industry 5.0 technological capabilities and sustainable performance. The current study has contributed to filling a gap in the literature on Industry 5.0 capabilities, especially in the circular economy and sustainable performance perspective. The practical contribution recommended is that if organizations focused on their Industry 5.0 technological capabilities, it would boost circular economy practices and sustainable performance to achieve sustainable development goals.

Keywords: Industry 5.0 capabilities; internet of things; artificial intelligence; big data; blockchain; machine learning; circular economy practices; sustainability; structural equation modelling (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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