Impact of Industry 4.0 on sustainability of Malaysia’s manufacturing industry in post-COVID era

PurposeThe purpose of this study is to investigate how Industry 4.0 (IR 4.0) operates within the context of the post-COVID-19 environment and its impact on the economic, environmental and social sustainability of the manufacturing industry in a developing economy. By delving into this subject, the authors aim to understand the mechanisms through which IR 4.0 influences various facets of sustainability within the manufacturing sector.Design/methodology/approachA cross-sectional research design is used using purposive sampling and hypotheses were developed based on seminal theories and literature. Data was collected from 191 Malaysian manufacturing firms that use IR 4.0 technologies. The partial least squares structural equation modeling technique was used to explore how post-COVID uncertainty environment impacts manufacturing sustainability through IR 4.0 adoption.FindingsDuring the highly uncertain era of the post-COVID-19 pandemic, the implementation of IR 4.0 adoption has had a favorable effect on the manufacturing industry, enhancing process efficiency, automation and data granularity. However, it is worth noting that automation does not significantly contribute to environmental sustainability and data granularity does not have a noteworthy impact on economic sustainability. On the other hand, process efficiency has a positive and significant influence on all three dimensions of sustainability. Moreover, data granularity positively affects environmental sustainability, whereas automation positively impacts both social and economic sustainability.Research limitations/implicationsThis study emphasizes the importance of policy interventions to harness the transformative power of IR 4.0 and address the identified concerns. In addition, the findings offer valuable insights for mid-level operational managers, enabling them to actively participate in the creation of sustainable policies in partnership with top management. It is expected that these actions, which involve making necessary adjustments in the manufacturing process, will yield tangible outcomes for sustainable development.Originality/valueThis study offers valuable insights into the relationship between the uncertain post-COVID-19 environment, referred to as hyper-uncertainty and the adoption of IR 4.0 in the context of manufacturing sustainability.