Redefining sustainability through dual-servitization and circular economy in Industry 5.0

Technological improvements characterise Industry 4.0, whereas Industry 5.0 (I5.0) focuses on green and sustainable practices. Industry 5.0 redefines sustainability concepts, enabling firms to accomplish the 2030 target for the Sustainable Development Goals. Although I5.0 is a growing area for research, there is a scarcity of research on green and sustainable Industry 5.0. Furthermore, a paucity of research on the dual-servitization (green and servitization) strategy to promote sustainability in Industry I5.0. This study aims to fill this gap by examining how dual-servitization promotes circular economy practices, ultimately enhancing the sustainable performance of Malaysian and Japanese manufacturing firms operating in Malaysia. Based on the Natural Resource-Based View (NRBV) theory, a robust framework has been developed. A questionnaire-based survey approach was used to collect data from 251 manufacturing firms, employing a stratified sampling technique. The findings indicate that the dual-servitization strategy is most effective for implementing circular economy practices and strengthening sustainable performance. According to the multigroup analysis, Malaysian firms place more emphasis on the environmental pillar, while Japanese firms prioritise the social pillar of sustainability and product-related attributes. Based on the findings, the study's contributions, practical implications, and future research directions are discussed.