Investigating the Impact of Industry 4.0 Technology through a TOE-Based Innovation Model

Abstract

Technological change has drastically shaped developments in the manufacturing and service industries. Integrating Industry 4.0 technologies in business practice is an emerging trend for future-oriented enterprises. By linking the TOE (technology-organization-environment) framework with product innovation, process innovation, and company performance, this research proposes a TOE-based innovation model to investigate Industry 4.0. The test results identified that Industry 4.0 technology adoption can be determined by compatibility, top management support, and competitive pressures, unexpectedly, not cost or employee capability; technology adoption can only indirectly influence company performance through mediation effects of product and process innovation. Results also revealed that industry type and global trade could play moderation roles in the technology adoption process: compared to the manufacturing industry, employee capability seems to be more influential on technology adoption in the service industry; global trade activities cannot significantly impact the technology adoption process, but trade companies are more likely to achieve more process innovation after such adoption. This study can enrich the theoretical bases of Industry 4.0 and confer a better understanding of the ongoing technological revolution in developing countries, which may offer some new insights for practitioners and academics.

Keywords

• Industry 4.0
• innovation
• technology adoption
• TOE framework
• global trade