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

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  • 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
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