Digital technology implementation and the transition toward industry 5.0: Implications for employee skill development in the public sector
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Published:
Sep 17, 2026
Keywords:
Digital Technology, Government Employees, Industry 5.0, Skills Development
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Articles
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Abstract
This study analyzes the influence of the implementation of digital technology on the development of employee skills with the transition to Industry 5.0 as a mediator in the Banten Provincial DPUPR. The mixed methods approach was applied through a survey of 144 respondents and interviews with 13 informants. Quantitative data were analyzed using PLS-SEM assisted by SmartPLS 4, while qualitative findings were used to clarify statistical results. The implementation of digital technology has a negative effect on employee skill development (β=−0.241; t=3,053; p=0.002), but has a positive effect on the transition to Industry 5.0 (β=0.713; t=16,242; p=0.000). The transition strongly improves employee skills (β=0.956; t=16,009; p=0.000) while mediating the positive influence of digital technology (β=0.681; t=9,980; p=0.001). This pattern indicates competitive mediation. Digitalization that is not accompanied by user readiness can create an adaptation burden. On the contrary, human-centric, collaborative, resilient, and sustainable implementation is able to turn technology into a means of strengthening employee competence.
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How to Cite
Setiadi, M. T., Jajuli, J., Rafiudin, A., Ahdun, A., & Susanti, N. (2026). Digital technology implementation and the transition toward industry 5.0: Implications for employee skill development in the public sector. Indonesia Auditing Research Journal, 15(3), 389–398. https://doi.org/10.35335/arj.v15i3.783
References
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Latupeirissa, J. J. P., Dewi, N. L. Y., Prayana, I. K. R., Srikandi, M. B., Ramadiansyah, S. A., & Pramana, I. B. G. A. Y. (2024). Transforming Public Service Delivery: A Comprehensive Review of Digitization Initiatives. Sustainability, 16(7), 2818. https://doi.org/10.3390/su16072818
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Rožanec, J. M., Novalija, I., Zajec, P., Kenda, K., Tavakoli, H., Suh, S., Veliou, E., Papamartzivanos, D., Giannetsos, T., Menesidou, S. A., Alonso, R., Cauli, N., Meloni, A., Recupero, D. R., Kyriazis, D., Sofianidis, G., Theodoropoulos, S., Fortuna, B., Mladenić, D., & Soldatos, J. (2022). Human-Centric Artificial Intelligence Architecture for Industry 5.0 Applications. http://arxiv.org/abs/2203.10794
Saniuk, S., & Grabowska, S. (2023). Knowledge and Skills Development for Implementing the Industry 5.0 Concept. European Conference on Knowledge Management, 24(2), 1188–1195. https://doi.org/10.34190/eckm.24.2.1329
Satya, V. E. (2018). Strategi Indonesia Menghadapi Industri 4.0. Info Singkat, 10(9), 19–24.
Tahu, G. P. (2025). Implementation of Digital Technology in Industry 5.0 Era. Jurnal Penelitian Pendidikan IPA, 11(5), 557–562. https://doi.org/10.29303/jppipa.v11i5.11191
Tavares, M. C., Azevedo, G., & Marques, R. P. (2022). The Challenges and Opportunities of Era 5.0 for a More Humanistic and Sustainable Society—A Literature Review. Societies, 12(6), 149. https://doi.org/10.3390/soc12060149
Tóth, A., Nagy, L., Kennedy, R., Bohuš, B., Abonyi, J., & Ruppert, T. (2023). The human-centric Industry 5.0 collaboration architecture. MethodsX, 11, 102260. https://doi.org/10.1016/j.mex.2023.102260
Aly, H. (2022). Digital transformation, development and productivity in developing countries: is artificial intelligence a curse or a blessing? Review of Economics and Political Science, 7(4), 238–256. https://doi.org/10.1108/REPS-11-2019-0145
Atobishi, T., Moh’d Abu Bakir, S., & Nosratabadi, S. (2024). How Do Digital Capabilities Affect Organizational Performance in the Public Sector? The Mediating Role of the Organizational Agility. Administrative Sciences, 14(2), 37. https://doi.org/10.3390/admsci14020037
Babkin, A., Shkarupeta, E., Kabasheva, I., Rudaleva, I., & Vicentiy, A. (2022). A Framework for Digital Development of Industrial Systems in the Strategic Drift to Industry 5.0. International Journal of Technology, 13(7), 1373. https://doi.org/10.14716/ijtech.v13i7.6193
Banten, D. P. P. (2023). Rencana Strategis (Renstra) Tahun 2023-2026. Dinas PUPR Provinsi Banten.
Breque, M., Nul, L. De, & Petridis, A. (2021). Industry 5.0: Towards a sustainable, human-centric and resilient European industry. https://doi.org/10.2777/308407
Brodny, J., & Tutak, M. (2025). Assessing human-centric, resilient, sustainable and smart transformation in the EU-27 countries: A new balanced composite index method. Journal of Open Innovation: Technology, Market, and Complexity, 11(4), 100685. https://doi.org/10.1016/j.joitmc.2025.100685
Carayannis, E. G., & Morawska-Jancelewicz, J. (2022). The Futures of Europe: Society 5.0 and Industry 5.0 as Driving Forces of Future Universities. Journal of the Knowledge Economy, 13(4), 3445–3471. https://doi.org/10.1007/s13132-021-00854-2
Carminati, L., Lagorio, A., Cimini, C., Pirola, F., Jurczuk, A., & Boucher, X. (2025). Integrative skills framework for Industry 5.0: insights from a systematic literature review and a European survey study. Journal of Environmental Management, 394, 127425. https://doi.org/10.1016/j.jenvman.2025.127425
Carter, L., Desouza, K. C., Dawson, G. S., & Pardo, T. (2024). Digital transformation of the public sector: Designing strategic information systems. The Journal of Strategic Information Systems, 33(3), 101853. https://doi.org/10.1016/j.jsis.2024.101853
Fatihaturrizqi, M., Galuh, Y., & Salsabila, Z. G. (2025). Analisis Kesenjangan Keterampilan Tenaga Kerja Vokasi di Era Revolusi Industri 5. Manajemen Sumber Daya Manusia, 2(1), 11–19.
Gasco-Hernandez, M., Nasi, G., Cucciniello, M., & Hiedemann, A. M. (2022). The role of organizational capacity to foster digital transformation in local governments: The case of three European smart cities. Urban Governance, 2(2), 236–246. https://doi.org/10.1016/j.ugj.2022.09.005
Ghobakhloo, M., Mahdiraji, H. A., Iranmanesh, M., & Jafari-Sadeghi, V. (2024). From Industry 4.0 Digital Manufacturing to Industry 5.0 Digital Society: a Roadmap Toward Human-Centric, Sustainable, and Resilient Production. Information Systems Frontiers. https://doi.org/10.1007/s10796-024-10476-z
Grabowska, S., Saniuk, S., & Gajdzik, B. (2022). Industry 5.0: improving humanization and sustainability of Industry 4.0. Scientometrics, 127(6), 3117–3144. https://doi.org/10.1007/s11192-022-04370-1
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (3rd ed.). SAGE Publications.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Hidayatno, A., Destyanto, A. R., & Hulu, C. A. (2019). Industry 4.0 Technology Implementation Impact to Industrial Sustainable Energy in Indonesia: A Model Conceptualization. Energy Procedia, 156, 227–233. https://doi.org/10.1016/j.egypro.2018.11.133
Höyng, M., & Lau, A. (2023). Being ready for digital transformation: How to enhance employees’ intentional digital readiness. Computers in Human Behavior Reports, 11, 100314. https://doi.org/10.1016/j.chbr.2023.100314
Jefroy, N., Azarian, M., & Yu, H. (2022). Moving from Industry 4.0 to Industry 5.0: What Are the Implications for Smart Logistics? Logistics, 6(2), 26. https://doi.org/10.3390/logistics6020026
Khan, G. F., Sarstedt, M., Shiau, W.-L., Hair, J. F., Ringle, C. M., & Fritze, M. P. (2019). Methodological research on partial least squares structural equation modeling (PLS-SEM). Internet Research, 29(3), 407–429. https://doi.org/10.1108/IntR-12-2017-0509
Latupeirissa, J. J. P., Dewi, N. L. Y., Prayana, I. K. R., Srikandi, M. B., Ramadiansyah, S. A., & Pramana, I. B. G. A. Y. (2024). Transforming Public Service Delivery: A Comprehensive Review of Digitization Initiatives. Sustainability, 16(7), 2818. https://doi.org/10.3390/su16072818
Mhaske, P., Bhattacharjee, B., Haldar, N., Upadhyay, P., & Mandal, A. (2025). Bridging digital skill gaps in the global workforce: A synthesis and conceptual framework building. Research in Globalization, 11, 100311. https://doi.org/10.1016/j.resglo.2025.100311
Mikalef, P., Lemmer, K., Schaefer, C., Ylinen, M., Fjørtoft, S. O., Torvatn, H. Y., Gupta, M., & Niehaves, B. (2023). Examining how AI capabilities can foster organizational performance in public organizations. Government Information Quarterly, 40(2), 101797. https://doi.org/10.1016/j.giq.2022.101797
Rožanec, J. M., Novalija, I., Zajec, P., Kenda, K., Tavakoli, H., Suh, S., Veliou, E., Papamartzivanos, D., Giannetsos, T., Menesidou, S. A., Alonso, R., Cauli, N., Meloni, A., Recupero, D. R., Kyriazis, D., Sofianidis, G., Theodoropoulos, S., Fortuna, B., Mladenić, D., & Soldatos, J. (2022). Human-Centric Artificial Intelligence Architecture for Industry 5.0 Applications. http://arxiv.org/abs/2203.10794
Saniuk, S., & Grabowska, S. (2023). Knowledge and Skills Development for Implementing the Industry 5.0 Concept. European Conference on Knowledge Management, 24(2), 1188–1195. https://doi.org/10.34190/eckm.24.2.1329
Satya, V. E. (2018). Strategi Indonesia Menghadapi Industri 4.0. Info Singkat, 10(9), 19–24.
Tahu, G. P. (2025). Implementation of Digital Technology in Industry 5.0 Era. Jurnal Penelitian Pendidikan IPA, 11(5), 557–562. https://doi.org/10.29303/jppipa.v11i5.11191
Tavares, M. C., Azevedo, G., & Marques, R. P. (2022). The Challenges and Opportunities of Era 5.0 for a More Humanistic and Sustainable Society—A Literature Review. Societies, 12(6), 149. https://doi.org/10.3390/soc12060149
Tóth, A., Nagy, L., Kennedy, R., Bohuš, B., Abonyi, J., & Ruppert, T. (2023). The human-centric Industry 5.0 collaboration architecture. MethodsX, 11, 102260. https://doi.org/10.1016/j.mex.2023.102260
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