Adopting Industry 4.0 through absorptive capacity and innovation ambidexterity with the moderation of learning capability

Abstract

Purpose

Based on a quantitative investigation, this paper endeavors to examine Industry 4.0 (I4.0) adoption process by studying the impacts of absorptive capacity (AC) and innovative ambidexterity (exploration, exploitation), while also considering the moderating influence of learning capability (LC).

Design/methodology/approach

Data has been gathered through administering questionnaire to 468 managers representing 175 manufacturing firms. Subsequently, PLS-SEM technique has been employed to verify the research hypotheses.

Findings

Study findings reveal that AC is significantly associated with I4.0 adoption and innovation ambidexterity. However, innovation ambidexterity demonstrates partial (only exploration) significant association with the adoption of I4.0. Similarly, the findings indicate that LC acts as a partial moderator between innovation ambidexterity (exploration) and I4.0 adoption.

Research limitations/implications

The study presents significant insights into I4.0 adoption process. The findings may support managers of manufacturing firms to understand and assess the influence of integrating contextual factors facilitating successful adoption of I4.0. The study emphasizes necessity of managers’ awareness regarding the importance of firm’s AC to transform smoothly to I4.0 technologies. In addition to, encouraging the innovation ambidexterity along with LC to enhance the adoption of I4.0.

Originality/value

While researchers demonstrate increasing interest in applying I4.0, concrete evidence to support the I4.0 adoption process is, still, insufficient due to ongoing challenges in digital transformation. Consequently, further research is needed, particularly in exploring how a firm’s ability to realize knowledge and foster innovation contributes to implementing I4.0. This paper seeks to tackle this lack of research by examining the connection between AC, innovation ambidexterity, and LC and the adoption of I4.0 in an emerging economy.