Effect of manufacturing service transformation management on technological innovation

Abstract

The immediate need for servitization and digital technologies like the Internet of Things (IoT), cloud computing and predictive analysis must be addressed in manufacturing industries. This research aims to analyze the impact of manufacturing services transformation management from traditional methods to technological innovation. This research approached the panel data of Chinese multinational equipment manufacturing industries for the analytical purpose from 2011 to 2017. The unit-root test has checked the stationarity of panel data and cointegration regression checked the long-term relationship among selected variables. The research results have confirmed a long-run and positive relationship between service transformation management of manufacturing enterprises and technological innovation. The positive upward trend among these two variables is because of increasing market demand-driven, open innovation network construction and increase in capital (intellectual, human & financial capital). The negative sign of values is declared the validity of an inverted “U-Shaped” analysis, which confirms the relationship's longevity. The adaptation of technological innovation has also indicated the growing performance trend in service management enterprises. As per the rule of inverted “U-Shaped” law, at a specific point, the manufacturing enterprises’ servitization management will start declining, and it will continue as a cyclic process. This research suggests that enterprises should prepare for the declining phase of servitization and sort out the other performance growth area, which will help to balance the performance of manufacturing enterprises wholesomely.