Industry 4.0 and environmental sustainability of Manufacturing firms in Nairobi, Kenya

Abstract

The adoption of Industry 4.0 technologies has become increasingly important in promoting environmental sustainability within the manufacturing sector. However, in Nairobi, Kenya, many manufacturing firms continue to face challenges in integrating these advanced technologies to minimize their environmental footprint. This study sought to establish the effect of Industry 4.0 on the environmental sustainability of manufacturing firms in Nairobi, Kenya. Specifically, the study aimed to examine the influence of smart manufacturing, determine the effect of cyber-physical systems, assess the influence of Internet of Things, and evaluate the effect of big data analytics on environmental sustainability. The study was anchored on four key theories: the Natural Resource-Based View theory, the Ecological Modernization Theory, the Technology-Organization-Environment framework and the Dynamic Capabilities Theory. The study adopted a descriptive correlational research design and targeted the 418 manufacturing firms operating within Nairobi County. A stratified random sampling technique was used to select 204 respondents from various manufacturing subsectors, and primary data was collected using structured questionnaires administered to operations and environmental sustainability managers. Quantitative data was analyzed using both descriptive and inferential statistics, including multiple regression analysis to test the hypothesized relationships. SPSS version 27 was used. The regression results revealed that Industry 4.0 technologies significantly enhanced environmental sustainability among manufacturing firms in Nairobi, with an R² of 0.776, F (4,176) = 152.580, and p < 0.001. The standardized coefficients indicated that cyber-physical systems (β = 0.363, p < 0.001) and smart manufacturing (β = 0.316, p < 0.001) had the strongest effects, followed by Internet of Things (β = 0.199, p < 0.001) and big data analytics (β = 0.133, p = 0.002). The study concluded that the adoption of Industry 4.0 technologies significantly enhances environmental sustainability by improving energy efficiency, reducing waste, minimizing emissions, and promoting resource optimization in manufacturing firms. The study recommends that policymakers and regulators formulate supportive policies and incentives to encourage the adoption of Industry 4.0 technologies across the manufacturing sector. This may include tax rebates, innovation grants, and infrastructure development to enhance technological readiness.