IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v196y2023ics0040162523004936.html
   My bibliography  Save this article

Future social change of manufacturing and service industries: Service-oriented manufacturing under the integration of innovation-flows drive

Author

Listed:
  • Liu, Hongda
  • Zhao, Haifeng
  • Li, Shiyuan

Abstract

Based on advanced manufacturing and the modern service industry, service-oriented manufacturing propels the economic transition. It motivates the manufacturing and service system to ascend to the middle and upper levels of the value chain. First, the relationship between service-oriented manufacturing and the logic behind value growth is deconstructed. The mechanism of service-oriented manufacturing is elucidated at the levels of the manufacturing network, service network, and integration network. Second, the manufacturing, service and innovation relationships formed in the industry chain are analyzed in terms of the supply chain of the manufacturing network, service chain of the service network, and innovation chain of the integration network. The coordinated hypernetwork model of service-oriented manufacturing is also established. The node relationships and value flows of each sub-network are resolved using variational inequalities according to the principle of each chain operation. The coordinated optimal solution of the hypernetwork is clarified. Additionally, issues concerning the enhancement of equilibrium profits in the hypernetwork are investigated. Finally, we use numerical simulation for specific situations in the hypernetwork of enterprises. Using the strong correlation network of potential value growth of firms generated by social network analysis, a feasible strategy for coordinated optimization of service-oriented manufacturing is proposed. This study finds that the manufacturing equilibrium formula emphasizes that service-oriented manufacturing firms must break the previous industrial separation and obtain the value-added profits from the iteration of manufacturing and service models to enhance the possibility of risk investment in integration innovation. According to the service equilibrium formula, enterprises must avoid the inferior market of services and excessive concentration of resources. Firms strengthen the access mechanisms of service-oriented manufacturing activities by revising the service model and introducing manufacturing operations. In the integration equilibrium formula, the linear feature of innovation indicates that firms should continuously invest in innovation construction and conduct innovation integration activities without incurring losses. Second, the main chain (supply chain, innovation chain) relationship between the manufacturing sub-network and integration sub-network is stronger than the other node relationships. The service network exhibits the characteristics of a weaker service chain than external nodes. Manufacturing value flows are concentrated on middle and downstream manufacturing activities. Service value flows are aggregated by market-oriented principles. Innovation value flows primarily exhibit continuous input and inherited innovation characteristics. Third, technology application, service penetration, the integration scale of manufacturing and service markets, and the market acceptance scale of service and manufacturing are essentially homogeneously related to the manufacturing relationship, service relationship, and innovation relationship, which positively stimulate the activity of value flows in each network. The cost and attrition of technology and service show inhibitory effects on value flows. Fourth, in the value network, the manufacturing value flows of the manufacturing relationship form a U-shape along with the industrial chain. The service value flow of the market is robust and exhibits a “tick”-like pattern in the service network. The innovation value network is mainly attached to the innovation chain and displays point-scattering characteristics.

Suggested Citation

  • Liu, Hongda & Zhao, Haifeng & Li, Shiyuan, 2023. "Future social change of manufacturing and service industries: Service-oriented manufacturing under the integration of innovation-flows drive," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    • Handle: RePEc:eee:tefoso:v:196:y:2023:i:c:s0040162523004936
    DOI: 10.1016/j.techfore.2023.122808
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162523004936
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2023.122808?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vandermerwe, Sandra & Rada, Juan, 1988. "Servitization of business: Adding value by adding services," European Management Journal, Elsevier, vol. 6(4), pages 314-324, December.
    2. Woodfield, Paul J. & Ooi, Yat Ming & Husted, Kenneth, 2023. "Commercialisation patterns of scientific knowledge in traditional low- and medium-tech industries," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    3. Sarkar, Soumodip & Mateus, Sara, 2022. "Value creation using minimal resources – A meta-synthesis of frugal innovation," Technological Forecasting and Social Change, Elsevier, vol. 179(C).
    4. Jens Matthias Arnold & Beata Javorcik & Molly Lipscomb & Aaditya Mattoo, 2016. "Services Reform and Manufacturing Performance: Evidence from India," Economic Journal, Royal Economic Society, vol. 126(590), pages 1-39, February.
    5. Hongda Liu & Haifeng Zhao, 2022. "Upgrading models, evolutionary mechanisms and vertical cases of service-oriented manufacturing in SVC leading enterprises: Product-development and service-innovation for industry 4.0," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-24, December.
    6. Youngjin Yoo & Richard J. Boland & Kalle Lyytinen & Ann Majchrzak, 2012. "Organizing for Innovation in the Digitized World," Organization Science, INFORMS, vol. 23(5), pages 1398-1408, October.
    7. Hartwig, Jochen & Krämer, Hagen, 2019. "The ‘Growth Disease’ at 50 – Baumol after Oulton," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 463-471.
    8. Korkeamäki, Lauri & Kohtamäki, Marko & Parida, Vinit, 2021. "Worth the risk? The profit impact of outcome-based service offerings for manufacturing firms," Journal of Business Research, Elsevier, vol. 131(C), pages 92-102.
    9. Amy Z. Zeng, 2013. "Coordination mechanisms for a three‐stage reverse supply chain to increase profitable returns," Naval Research Logistics (NRL), John Wiley & Sons, vol. 60(1), pages 31-45, February.
    10. Arnold Tukker, 2004. "Eight types of product–service system: eight ways to sustainability? Experiences from SusProNet," Business Strategy and the Environment, Wiley Blackwell, vol. 13(4), pages 246-260, July.
    11. Rath, Badri Narayan, 2018. "Productivity growth and efficiency change: Comparing manufacturing- and service-based firms in India," Economic Modelling, Elsevier, vol. 70(C), pages 447-457.
    12. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-1997, December.
    13. Jens Matthias Arnold & Aaditya Mattoo & Gaia Narciso, 2008. "Services Inputs and Firm Productivity in Sub-Saharan Africa: Evidence from Firm-Level Data," Journal of African Economies, Centre for the Study of African Economies, vol. 17(4), pages 578-599, August.
    14. Marco Paiola & Tatiana Khvatova & Francesco Schiavone & Fauzia Jabeen, 2022. "Paths toward advanced service-oriented business models : A configurational analysis of small- and medium-sized incumbent manufacturers," Post-Print hal-04325566, HAL.
    15. Steven Payson, 1997. "Difficulty of measuring capital, revisited: Does science offer an alternative?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(3), pages 330-330, August.
    16. Zeng, Shouzhen & Zhou, Jiamin & Zhang, Chonghui & Merigó, José M., 2022. "Intuitionistic fuzzy social network hybrid MCDM model for an assessment of digital reforms of manufacturing industry in China," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    17. Guoqi Liu & Yuli Zhao & Zhuang Wang & Ying Liu, 2014. "A Service Chain Discovery and Recommendation Scheme Using Complex Network Theory," Mathematical Problems in Engineering, Hindawi, vol. 2014, pages 1-6, January.
    18. Xi Chen & Tengyu Ma & Jiawei Zhang & Yuan Zhou, 2019. "Optimal Design of Process Flexibility for General Production Systems," Operations Research, INFORMS, vol. 67(2), pages 516-531, March.
    19. Yu, Jiang & Wen, Yating & Jin, Jing & Zhang, Yue, 2019. "Towards a service-dominant platform for public value co-creation in a smart city: Evidence from two metropolitan cities in China," Technological Forecasting and Social Change, Elsevier, vol. 142(C), pages 168-182.
    20. Xia, Tangbin & Sun, Bowen & Chen, Zhen & Pan, Ershun & Wang, Hao & Xi, Lifeng, 2021. "Opportunistic maintenance policy integrating leasing profit and capacity balancing for serial-parallel leased systems," Reliability Engineering and System Safety, Elsevier, vol. 205(C).
    21. Li, Kai & Qi, Shouzhou & Shi, Xunpeng, 2023. "Environmental policies and low-carbon industrial upgrading: Heterogenous effects among policies, sectors, and technologies in China," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    22. Haochang Yang & Faming Zhang & Yixin He, 2021. "Exploring the effect of producer services and manufacturing industrial co-agglomeration on the ecological environment pollution control in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(11), pages 16119-16144, November.
    23. Lambert, Abbie & Jones, Robert Paul & Clinton, Suzanne, 2021. "Employee engagement and the service profit chain in a quick-service restaurant organization," Journal of Business Research, Elsevier, vol. 135(C), pages 214-225.
    24. Liu, Caihong & Ji, Hannah & Ji, Jonah, 2022. "Mobile information technology's impacts on service innovation performance of manufacturing enterprises," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    25. Liu, Hongda & Huang, Feipeng & Huang, Jialiang, 2022. "Measuring the coordination decision of renewable energy as a natural resource contracts based on rights structure and corporate social responsibility from economic recovery," Resources Policy, Elsevier, vol. 78(C).
    26. Geum, Youngjung & Kim, Moon-Soo & Lee, Sungjoo, 2016. "How industrial convergence happens: A taxonomical approach based on empirical evidences," Technological Forecasting and Social Change, Elsevier, vol. 107(C), pages 112-120.
    27. Botchie, David & Sarpong, David & Meissner, Dirk, 2022. "Chain upgrading, technology transfer, and legitimacy: The Schumpeterian character of China in the information and communication technology sector in SSA," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    28. Su, Dan & Zhang, Lijun & Peng, Hua & Saeidi, Parvaneh & Tirkolaee, Erfan Babaee, 2023. "Technical challenges of blockchain technology for sustainable manufacturing paradigm in Industry 4.0 era using a fuzzy decision support system," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    29. Gao, Qiang & Cheng, Changming & Sun, Guanglin, 2023. "Big data application, factor allocation, and green innovation in Chinese manufacturing enterprises," Technological Forecasting and Social Change, Elsevier, vol. 192(C).
    30. Chen, Shengqi & Zhang, Hong, 2021. "Does digital finance promote manufacturing servitization: Micro evidence from China," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 856-869.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fida Karam & Chahir Zaki, 2020. "A new dawn for MENA firms: service trade liberalization for more competitive exports," Applied Economics, Taylor & Francis Journals, vol. 52(1), pages 19-35, January.
    2. Chen, Guo & Liu, Yishuang & Gao, Qizheng & Zhang, Jianqing, 2023. "Does regional services development enhance manufacturing firm productivity? A manufacturing servitization perspective," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 451-466.
    3. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    4. Siri Jagstedt & Magnus Persson, 2019. "Using Platform Strategies In The Development Of Integrated Product-Service Solutions," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(04), pages 1-36, May.
    5. David Opresnik & Maurizio Fiasché & Marco Taisch & Manuel Hirsch, 0. "An evolving fuzzy inference system for extraction of rule set for planning a product–service strategy," Information Technology and Management, Springer, vol. 0, pages 1-17.
    6. Alberto de la Calle & Inmaculada Freije & Aitor Oyarbide, 2021. "Digital Product–Service Innovation and Sustainability: A Multiple-Case Study in the Capital Goods Industry," Sustainability, MDPI, vol. 13(11), pages 1-29, June.
    7. Beverelli, Cosimo & Fiorini, Matteo & Hoekman, Bernard, 2017. "Services trade policy and manufacturing productivity: The role of institutions," Journal of International Economics, Elsevier, vol. 104(C), pages 166-182.
    8. Faridah Djellal & Faïz Gallouj, 2018. "Services, service innovation and the ecological challenge," Chapters, in: Faïz Gallouj & Faridah Djellal (ed.), A Research Agenda for Service Innovation, chapter 2, pages 27-45, Edward Elgar Publishing.
    9. Martinez, Veronica & Neely, Andy & Velu, Chander & Leinster-Evans, Stewart & Bisessar, Dav, 2017. "Exploring the journey to services," International Journal of Production Economics, Elsevier, vol. 192(C), pages 66-80.
    10. Bernhard Dachs & Sabine Biege & Martin Borowiecki & Gunter Lay & Angela Jäger & Doris Schartinger, 2014. "Servitisation of European manufacturing: evidence from a large scale database," The Service Industries Journal, Taylor & Francis Journals, vol. 34(1), pages 5-23, January.
    11. David Hidalgo-Carvajal & Ruth Carrasco-Gallego & Gustavo Morales-Alonso, 2021. "From Goods to Services and from Linear to Circular: The Role of Servitization’s Challenges and Drivers in the Shifting Process," Sustainability, MDPI, vol. 13(8), pages 1-26, April.
    12. Bas, Maria, 2020. "The effect of communication and energy services reform on manufacturing firms’ innovation," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 339-362.
    13. Li, Ai Qiang & Kumar, Maneesh & Claes, Björn & Found, Pauline, 2020. "The state-of-the-art of the theory on Product-Service Systems," International Journal of Production Economics, Elsevier, vol. 222(C).
    14. Julian T. M. Pinto & Manuel E. Morales & Mariia Fedoruk & Marina Kovaleva & Arnaud Diemer, 2019. "Servitization in Support of Sustainable Cities: What Are Steel’s Contributions and Challenges?," Sustainability, MDPI, vol. 11(3), pages 1-18, February.
    15. Tarr, David, 2012. "Impact of services liberalization on industry productivity, exports and development : six empirical studies in the transition countries," Policy Research Working Paper Series 6023, The World Bank.
    16. Green, Maxwell H. & Davies, Philip & Ng, Irene C.L., 2017. "Two strands of servitization: A thematic analysis of traditional and customer co-created servitization and future research directions," International Journal of Production Economics, Elsevier, vol. 192(C), pages 40-53.
    17. Shen, Lei & Sun, Wanqin & Parida, Vinit, 2023. "Consolidating digital servitization research: A systematic review, integrative framework, and future research directions," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    18. Vinit Parida & Joakim Wincent, 2019. "Why and how to compete through sustainability: a review and outline of trends influencing firm and network-level transformation," International Entrepreneurship and Management Journal, Springer, vol. 15(1), pages 1-19, March.
    19. Omar Bamieh & Francesco Bripi & Matteo Fiorini, 2022. "Services trade and labor market outcomes: Evidence from Italian firms," Review of International Economics, Wiley Blackwell, vol. 30(3), pages 673-701, August.
    20. Pejvak Oghazi & Rana Mostaghel, 2018. "Circular Business Model Challenges and Lessons Learned—An Industrial Perspective," Sustainability, MDPI, vol. 10(3), pages 1-19, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:196:y:2023:i:c:s0040162523004936. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.