Effect of resources and capabilities for integrating Industry 4.0 and sustainable production to unlock circular economy : a South African experience

Abstract

Abstract: The study aspires to develop a theoretical model linking Industry 4.0 and cleaner production to unlock circular economy in an emerging economy of South Africa. Drawing upon Resource based view theory; the study aims to explore the firm resources and capabilities that are necessary to integrate Industry 4.0 technologies and sustainable production to further enhance circular economy performance and secondly, to investigate the impact of each research and capabilities on circular economy performance and finally, to outline agenda for ethical business development. The review of literature led to identification of thirty-five resources and capabilities that are essential for the integration of Industry 4.0 and sustainable production that will aid in unlocking circular economy. Further, exploratory factor analysis is used to group the variables under relevant factors and thereafter path modelling is performed using PLS-SEM technique. Research findings indicate that Project resources, Green team resources, Technological resources, Production and operations capabilities, Human resources capabilities, Management capabilities, Circularity capabilities, Information technology capabilities and Relationship capabilities are required for integration of I4.0 and sustainable production and further enhance CE performance. However, the Technological resources, Production and Operations capabilities and Circularity capabilities are found to have a stronger relationship with CE performance compared to rest of the resources and capabilities. The study concludes with theoretical and practical implications and agenda for ethical business developments