Industry 4.0 implementation: Environmental and social sustainability in manufacturing multinational enterprises

Abstract

By introducing digital technologies, Industry 4.0 may be transforming the traditional systems of the manufacturing industries, which are often blamed for high environmental degradation and social inequalities. Due to their power, size, and scope, manufacturing multinational enterprises (MNEs) are considered by other organizations as best practice references. If there is already evidence that digitalization favours environmental sustainability, social sustainability still needs to be explored. This study aims to analyze the contribution of the implementation of digital technologies in promoting environmental and social sustainability in European manufacturing MNEs using the Resource-Based View (RBV). A research model was formulated comprising five digital technologies (Artificial Intelligence, Cloud Computing, Robotics, Big Data Analytics, and Blockchain) and sustainable environmental and social practices. To test the model, the Partial Least Squares method was applied to a sample of 764 European manufacturing MNEs. The results show that European MNEs still have a low implementation of digital technologies in their business models. Digital technologies positively contribute to achieving these companies' environmental and social sustainability. However, the contributions of implementing each digital technology to environmental and social sustainability are not equal, allowing investment prioritization by manufacturing MNEs according to the strategically defined return. This study contributes to the evolution of RBV considering digital technology as a strategic resource. It focuses on assessing the contribution of five digital technologies to achieving environmental and social sustainability and demonstrates the importance of the digital transition towards greener manufacturing production in environmental and social terms. It also suggests practices managers and policymakers can implement to accelerate digitalization and achieve the United Nations Sustainable Development Goals.