The Paradigm Shift from Industry 4.0 Implementation to Industry 5.0 Readiness
Authors: Shadravan Arvin , Parsaei Hamid 
Published: October 2023

"Industry 4.0," initially a German initiative focused on technological advancements within the industrial sector, has garnered global recognition. Other nations have also initiated similar strategic endeavours, leading to extensive research dedicated to the development and implementation of Industry 4.0 technologies. More recently, the European Commission introduced "Industry 5.0," a decade following the inception of Industry 4.0. While Industry 4.0 is commonly perceived as technology-driven, Industry 5.0 is heralded as value-driven. The coexistence of these two industrial revolutions has spurred significant debates and necessitates thorough explanations. The business sector plays a pivotal role in fostering economic growth. However, the integration of new technology and the growing complexity of products and production processes have direct repercussions on industrial companies and their workforce. Critics of the Industry 4.0 paradigm underscore its technocratic focus on digitalization and novel technologies. Consequently, when Industry 5.0 emerged, discussions regarding its function and rationale gained rapid prominence. Industry 5.0 complements Industry 4.0, emphasizing the pivotal role of workers in the industrial process. Industry 4.0 has facilitated remarkable technological advancements, including additive manufacturing, artificial intelligence, augmented reality, cyber-physical systems, blockchain, and cybersecurity. These technologies address issues like demand fluctuations and market instability by minimizing human involvement in decision-making through the integration of computers, materials, and AI. Nonetheless, Industry 4.0 must surmount challenges in data security, supply chain management, human resource administration, and technological integration. In contrast, Industry 5.0 tackles these challenges with innovations such as predictive maintenance, hyper-customization, cyber-physical cognitive systems, and collaborative robots, placing a strong emphasis on human-centricity. The introduction of Industry 5.0 heralds an anticipated paradigm shift, prioritizing holistic, sustainable, and human-centered value generation. However, the escalating complexity of digitalization poses considerable difficulties, particularly for small and medium-sized businesses (SMEs) with limited resources for effective digitalization initiatives. This study delves into the literature surrounding improvements for both Industry 4.0 and Industry 5.0, addressing issues such as data privacy and technical integration problems. In Industry 5.0, resilience emerges as a crucial factor in enabling hyper-individualization and customized product offerings. Additionally, this study provides a concise exploration of the primary drivers and facilitators of the adoption of these new paradigms. It subsequently conducts a literature-based analysis, examining how these two paradigms differ from three essential perspectives: people, technology, and organizations. Moreover, it offers a comprehensive framework to assist researchers and businesses in comprehending the technologies, challenges, and solutions associated with Industry 4.0.