Unpacking digital servitization: How its facets drive platformization and Industry 4.0

Giving rise to both incremental and radical changes in manufacturing, digitalization is attracting major interest in servitization research. The diffusion of technologies and their adoption in business settings triggers simultaneous and interconnected phenomena that call for continuous examination of digital servitization, digital platforms, and digital production technologies in the context of Industry 4.0. While these three concepts have been conceptually assumed and qualitatively demonstrated as being interconnected, less is known about the effect of digital servitization on platforms and Industry 4.0, both key elements of the (digital) value creation sphere. This study aims to fill this gap by demonstrating whether and the degree to which digital servitization impacts manufacturers’ platformization process and Industry 4.0 orientation. Using a large-scale representative data set from the German manufacturing sector containing firm-level data from 1256 manufacturers, our results show that a firm needs to establish various digital servitization capabilities, such as digital customer integration, data analytics, and advanced service offerings, before effects on digital platforms and Industry 4.0 can be evidenced. Moreover, our analysis allows conclusions to be drawn about the degree to which the three facets of digital servitization - scope, depth and extent - act as drivers of platformization and Industry 4.0.