Driving Sustainable Firm Performance through Industry 5.0 Adoption and Organizational Agility in SMEs: A Conceptual Framework for Government Support

Abstract

This study aims to examine the significant drivers of Sustainable Firm Performance (SFP) in the context of Small and Medium-sized Enterprises (SMEs) during the transition to Industry 5.0. The research is underpinned by the Dynamic Capabilities Theory (DCT) and the Natural Resource-Based View (NRBV). A conceptual framework is developed to investigate the effect of Industry 5.0 technology adoption and organizational agility on economic, environmental, and social performance outcomes. The study also aims to investigate the mediating effect of organizational agility and the moderating effect of government support in relationships. The study aims to gather primary data from SME managers using the Partial Least Squares Structural Equation Modeling (PLS-SEM) technique. The conceptual analysis reveals that Industry 5.0 technology adoption is a technological enabler for SMEs, while organizational agility is a vital bridge that enables the achievement of sustainability. Moreover, the study reveals that government support is a vital enabler that can help SMEs achieve sustainability through the adoption of technology and the achievement of agility. The study offers a holistic framework for SMEs to achieve sustainability by matching internal technological focus with external support systems in the modern digital age.