Industry 4.0 and Triple Bottom Line Sustainability - a Crunch Point for Malaysian SMEs

Abstract

Current industrialization has generated many challenges, including ecological hazards, climate change, and overuse of non-renewable natural resources creating an increasing demand for achieving the goal of Triple Bottom Line (TBL). In this regard, Industry 4.0 can contribute to the the production process that can help in achieving sustainable development. Using Dynamic Capability view (DCV), this paper explores the role of Industry 4.0 as firm-level Dynamic Capabilities (DC) to achieving the goals of the triple botton line. Employing simple random sampling, the study adopted a quantitative approach based on 199 useable respondent’s feedback collected through a survey of 900 employees from the Malaysian SMEs. The results exhibit that top management and IT infrastructure significantly impact Industry 4.0 implementation and sustainability. In contrast, the analysis also demonstrates that supply chain integration is insignificant to Industry 4.0 implementation in SMEs. The study findings also show that the relationship between the firm-level DC and TBL sustainability can be mediated by the “effective implementation” of Industry 4.0. The study highlights the practical consequences of the role and use of firm capabilities in Industry 4.0 implementation and findings to notify managers and policy-makers to optimize value creation to achieve the sustainable development goals.