Industrial management
Maghsoud Amiri; HamidReza Talaie; Shahab Bayatzadeh
Abstract
In an era of intensifying global competition and unprecedented environmental, economic, and technological changes, organizations require a high level of readiness to adopt Industry 5.0-based technologies and business models. This study aims to investigate the impact of Industry 5.0 readiness on sustainable ...
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In an era of intensifying global competition and unprecedented environmental, economic, and technological changes, organizations require a high level of readiness to adopt Industry 5.0-based technologies and business models. This study aims to investigate the impact of Industry 5.0 readiness on sustainable business growth, considering the mediating roles of efficiency, responsiveness, and competitive advantage, with a case study of Mobarakeh Steel Company in Iran. Despite the growing body of research on Industry 5.0, a literature review indicates that the impact of Industry 5.0 readiness on efficiency, responsiveness, competitive advantage, and sustainable business growth has not yet been examined within an integrated framework. The research is applied in nature and follows a descriptive-correlational design. Data were collected using a standardized questionnaire from a purposive sample of 105 employees. The validity of the instrument, including content, convergent, and discriminant validity, as well as its reliability, was confirmed. The data were analyzed using structural equation modeling (SEM). The results revealed that Industry 5.0 readiness significantly enhances organizational efficiency and responsiveness. These two factors, in turn, strengthen competitive advantage and ultimately lead to sustainable business growth. Moreover, efficiency and responsiveness were found to mediate the relationship between Industry 5.0 readiness and competitive advantage. These findings offer practical guidance for industrial managers aiming to strategically transition toward Industry 5.0 and effectively leverage emerging technologies through a human-centric approach to achieve sustainable growth.
Introduction
The growing complexities of global supply chains, the imperative for sustainability, and the limitations of automation-focused paradigms have accelerated the shift toward Industry 5.0. Unlike Industry 4.0, which predominantly emphasizes automation and digitalization, Industry 5.0 integrates human-centricity, resilience, and sustainability as core values. Industry 5.0 readiness promotes a collaborative interface between humans and smart machines to enhance operational performance while considering social and environmental responsibilities. In this context, Industry 5.0 readiness emerges as a critical construct that reflects an organization’s capability to adopt, internalize, and benefit from emerging technologies such as artificial intelligence, collaborative robots, digital twins, blockchain, and big data analytics in a manner aligned with human and environmental values. While this concept has gained attention globally, empirical investigations into its impact on business outcomes remain limited. The steel industry, given its scale, energy intensity, and central role in economic development, represents a compelling sector for exploring Industry 5.0 transformation. Among leading firms in this domain, Mobarakeh Steel Company (MSC) in Iran has launched several digital transformation initiatives aligning itself with the broader agenda of Industry 5.0. This study examines the impact of Industry 5.0 readiness on sustainable business growth, considering the mediating roles of operational efficiency, organizational responsiveness, and competitive advantage. Despite the growing body of research on Industry 5.0, a literature review indicates that the impact of Industry 5.0 readiness on efficiency, responsiveness, competitive advantage, and sustainable business growth has not yet been examined within an integrated framework.
Methodology
This study employed a quantitative, applied, and correlational design to investigate the effect of Industry 5.0 readiness on sustainable business growth, mediated by efficiency, responsiveness, and competitive advantage. The target population comprised employees of Mobarakeh Steel Company, which has undertaken several initiatives aligned with Industry 5.0 principles. A structured questionnaire was designed to capture respondents' perceptions of their organization's readiness for Industry 5.0, its operational and strategic capabilities, and sustainable growth outcomes. The instrument included 17 items distributed across six constructs: Industry 5.0 readiness, efficiency, responsiveness, competitive advantage, and sustainable business growth. All items were measured on a five-point Likert scale, ranging from strongly disagree (1) to strongly agree (5). The sampling strategy was purposive, aimed at selecting employees involved in digital transformation initiatives or operational excellence programs. A total of 105 valid responses were collected. Despite the limitation of not including executive-level policymakers, the selected respondents possessed relevant knowledge of the technological and operational transformations within MSC. To ensure validity and reliability, several procedures were undertaken. Convergent and discriminant validity were assessed through Confirmatory Factor Analysis (CFA) using outer loadings, Average Variance Extracted (AVE), and the Fornell–Larcker criterion. The composite reliability (CR) and Cronbach’s alpha values for all constructs exceeded the accepted threshold of 0.7, indicating acceptable internal consistency. The hypothesized relationships were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS 3.0.
Findings
The analysis of the structural model using PLS-SEM revealed several statistically significant relationships that validate the hypothesized impact pathways of Industry 5.0 readiness on sustainable business growth. The R² values for key endogenous variables, efficiency (0.57), responsiveness (0.54), competitive advantage (0.62), and sustainable business growth (0.66), indicate a good level of explanatory power for the model. The effect sizes (f²) were also moderate to strong, particularly for the paths from Industry 5.0 readiness to efficiency and responsiveness. The results confirmed that Industry 5.0 readiness has a significant and positive impact on both operational efficiency and organizational responsiveness. This finding aligns with Nazarian and Khan (2024), who demonstrated similar performance outcomes in European manufacturing contexts, and supports the idea that transitioning toward human-machine collaboration and real-time data systems yields operational improvements. In turn, efficiency and responsiveness were found to enhance competitive advantage, highlighting their mediating roles significantly. This corroborates Madhavan et al. (2024), who found that Industry 5.0-oriented capabilities in Thai marine SMEs improved competitive positioning through operational excellence. In the case of MSC, efficiency gains through AI-based predictive maintenance and responsiveness improvements via flexible scheduling systems contributed to a stronger market stance. Moreover, competitive advantage was shown to influence sustainable business growth significantly, suggesting that firms that achieve superior operational and strategic performance are more likely to maintain long-term viability and growth. This is consistent with studies by Alabi et al. (2025) and Bayatzadeh & Talaei (2024), who emphasized the link between technological transformation and long-term sustainability in industrial ecosystems. Importantly, the indirect effects of Industry 5.0 readiness on competitive advantage, through both efficiency and responsiveness, were also significant, confirming the partial mediating roles of these two capabilities. These results suggest that readiness for Industry 5.0 contributes not only to immediate performance benefits but also to longer-term strategic positioning, especially when internal capabilities are leveraged effectively.
Discussion and Conclusion
This study provides a nuanced exploration of how Industry 5.0 readiness contributes to sustainable business growth by enhancing efficiency, responsiveness, and competitive advantage, using the case of Mobarakeh Steel Company (MSC) in Iran. The study confirms the arguments of Nazarian and Khan (2024) that efficiency and responsiveness are critical conduits for the value generated by Industry 5.0 principles, such as smart automation and AI-human collaboration. It also aligns with the model proposed by Madhavan et al. (2024), showing that Industry 5.0 readiness can trigger significant organizational improvements when accompanied by complementary capabilities. Practically, the research illustrates how Industry 5.0 readiness serves as an enabler of sustainable growth, even in emerging economies where full deployment of Industry 5.0 technologies is not yet widespread. In the case of MSC, evidence from internal reports and strategic documents confirms the the Industry 5.0 readiness. Moreover, the results indicate that efficiency and responsiveness function as effective mediators, reinforcing the notion that performance benefits are not direct consequences of technology adoption, but instead are of the organization’s capacity to integrate and leverage such technologies. Looking ahead, these findings suggest that companies aiming to embark on their Industry 5.0 journey should focus not only on acquiring advanced technologies but also on developing internal capabilities, promoting a human-centric culture, and aligning operations with sustainability goals. Future research could explore cross-industry comparisons or longitudinal analyses to assess the evolution of Industry 5.0 readiness and its impact over time.
