Impact of Industry 4.0 on firms' sustainable development in the GCC economies

Abstract

Goal: This paper utilizes a practice-based view (PBV) and technology-organization-sustainable framework to create and evaluate a research model. The model examines how industry 4.0 (I4.0) affects sustainable development, focusing on the mediating role of 10R advanced manufacturing capabilities. Furthermore, the study also analyzes the moderating influence of environment dynamism (ED). Sustainable development is assessed based on two key factors - financial performance (FP) and sustainable performance (SP). Design / Methodology / Approach: The data is collected by surveying upper management in the GCC manufacturing sector through questionnaires. A total of 232 responses were included in the primary analyses. Data analysis was carried out with the help of SPSS 25.0 and SmartPLS 3.2.8. The dependability and path analysis were established using structural equation modeling (SEM). Results: The results show that I4.0 increases FP, whereas the I4.0-SP relationship is statistically insignificant. However, the I4.0-SP insignificant relationship is moderated by ED. Further, ED also moderates the relationship between I4.0 and 10R advanced manufacturing capabilities, as well as 10R advanced manufacturing capabilities and sustainable development (FP and SP). The 10R capabilities partially mediate the I4.0-FP relationship, whereas the study finds full mediation for the I4.0-SP association. Research limitations: The study employed Google forms to conveniently collect data from GCC industrial senior management using a cross-section design. Originality / Value: This study has identified a business model that impacts sustainable development by integrating I4.0 technologies, ED, and 10R. The study findings have significant implications for managers and policymakers.