Chapter 2: Industry 5.0: A New Paradigm in Business and Management

Industry 5.0 is an emerging concept that shapes the foundations of Industry 4.0, by highlighting a people orientation, sustainable, and resilient approach to corporate development. According to the European Union (EU) view, Industry 5.0 pursues to go beyond mere efficiency and productivity, converging to enhance the welfare of workers, the use of recent technological advancements to create success beyond jobs and growth and concerning a planetary sustainability threshold. This change supports Industry 4.0 as well through the accurate merging of research, developments, and innovations to enhance a balanced, human-centered, and powerful European industry. Industry 5.0 focuses on a human-centric strategy with an emphasis on talent development, diversity, and empowerment (Santhi & Muthuswamy, 2023). Thus, it helps organizations to reposition individuals at the center of the manufacturing process, recognizing their intrinsic value and ceasing to consider only the resource-based perspective. This helps industrial processes to use flexible and adaptable technologies to build agility and effectively use the resilient strategy of organizations.

Industry 5.0 focuses on actions that respect planetary boundaries and contribute to long-term ecological balance, thus maintaining a sustainable strategy (Martini et al., 2024). This chapter aligns with climate goals and sustainable development, highlighting Industry 5.0’s benefits and challenges. It emphasizes the need for new skills, collaboration with artificial intelligence (AI) and robotics, and notes that high investment costs may hinder adoption. Foundations, challenges, and opportunities of Industry 5.0 are also discussed.