Leveraging Industry 4.0 and Knowledge Management for Enhanced Innovation Performance: The Mediating Role of Organizational Learning

Abstract

This current article empirically examines the relationship between Knowledge Management (KM), Organizational Learning (OL), and Industry 4.0 (ID) in driving Innovative Performance (IP). Data was collected from (N=466) employees working at various levels in the manufacturing sector organizations of Pakistan through personally administered questionnaire. The findings validate KM as a primary driver of innovation (β = 0.564), with OL acting as a pivotal mediator. While OL partially mediates the KM-IP relationship, KM retains a stronger direct effect, underscoring the intrinsic value of knowledge assets beyond learning processes. Industry 4.0 exhibits a significant direct impact on OL (β = 0.554) but only a weak moderating effect on the KM-OL link (β = 0.079), suggesting its role is more additive than transformative. The moderated mediation effect is statistically negligible (β = 0.028), reinforcing those digital technologies enhance learning independently rather than amplifying KM’s influence on innovation. KM’s effectiveness grows with higher ID adoption, as advanced digital infrastructure improves knowledge capture and sharing. Practically, organizations should prioritize KM and OL foundations while selectively deploying ID as a secondary enabler. Theoretically, the results refine assumptions about Industry 4.0’s disruptive potential, positioning it as a supportive rather than central force in innovation dynamics. Moreover, this article offers a nuanced framework for balancing knowledge, learning, and digitalization in innovation strategies, guiding both academic discourse and managerial decision-making.