This study explores the evolution of the manufacturing industry, focusing on the transition to Industry 5.0 and its integration of advanced technologies like artificial intelligence, big data, and the Internet of Things (IoT). Industry 5.0 represents a radical shift towards adaptive, autonomous systems, building upon the advancements of its predecessors, particularly Industry 4.0. The analysis compares and contrasts Industry 4.0 and Industry 5.0, highlighting significant data-driven insights, including notable increases in AI applications and corresponding improvements in production efficiency and cost reduction during Industry 4.0. The study also investigates the rapid deployment of transformative technologies like 5G connectivity and quantum computing within Industry 5.0, projecting substantial growth in human–machine cooperation and decreases in error rates by 2033. Ultimately, the abstract outlines how Industry 5.0 will revolutionize smart manufacturing into intelligent, flexible, and responsive production systems, addressing both its potential benefits and challenges. This paper presents a detailed case study exploring the practical applications of IoT-driven innovations in Industry 5.0. Through analysis of IoT sensor data, specific operational conditions including factory temperature, warehouse humidity, and manufacturing line pressure are revealed. A data-driven strategy led to notable reductions in energy use and CO2 levels, facilitated by the diverse skills of case study participants. Key indicators of Industry 5.0, such as production efficiency, energy usage, quality control, and inventory turnover, demonstrate significant improvements, highlighting the importance of metrics evaluation and data-driven methodologies in showcasing the transformative potential of IoT-driven innovations within Industry 5.0.