Industry 5.0 prioritized the balance between technology and the social and environmental aspects of industry, as well as the ethical and socially responsible application of advanced technologies. While Industry 4.0 focused exclusively on optimizing industry through technological efficiency, Industry 5.0 promoted the importance of human–machine collaboration within socio-technical systems. Engaging with recent publications, the research evaluated the extent of the digital economy, sustainability, and inclusive stakeholder frameworks in Malaysia, as well as existing implementation gaps. The study revealed that, despite the availability of numerous technologies such as building information modeling, artificial intelligence, the Internet of Things, digital twins, and advanced traceability systems, their adoption remained unstable, technology-centered, and largely confined to dominant large organizations. Environmental degradation within the palm oil sector, the absence of substantial and comprehensive sustainability tools, skills gaps, and limited financial accessibility for small and medium enterprises and smallholders continued to hinder an inclusive transition to Industry 5.0. This study advocated an inclusive socio-technical framework for Industry 5.0 in Malaysia to semi-automate human work through the system design of a circular economy, resilient climate systems, and low-carbon risk mitigation, while prioritizing governance mechanisms for overlooked stakeholder groups. The study proposed innovative financing mechanisms, digital and sustainability co-initiatives, and the rapid adoption of collaborative governance frameworks as primary policy approaches. The dissertation aimed to contribute to emerging Industry 5.0 discourse in developing economies by emphasizing the importance of balancing technological advancement, social justice, and environmental stewardship. It also encouraged further research at the firm, supply chain, and community levels to operationalize Industry 5.0 more effectively.