Territorial Servitization Research Articles

Tensions in value spaces: The organizational buying center and advanced services

Advanced services necessitate redistribution of activities and new value co-creation processes and configurations, which are negotiated through interactions between organizations' buying centers (BCs) and selling centers (SCs). Transition to advanced services is rarely smooth because ecosystem actors often move into value spaces or territories (in which value is created/co-created) occupied and/or coveted by other actors. An exploratory qualitative approach was used to explore the value-space tensions (22 semi-structured interviews with senior executives from a range of industrial sectors and ecosystem positions). Our findings identify four advanced services lifecycle phases and demonstrate how managing these tensions across phases and BCs and SCs within the ecosystem is a necessary negotiated process impacting value creation/co-creation. We adopt a new theoretical lens (combining territorial servitization and territoriality from economic geography) to explore value spaces within-and-between BCs and SCs in advanced services ecosystems, and contribute to extant literature by: (1) delineating servitization value-space tensions as either cognitive/relational or Cartesian/physical; (2) illustrating how value-space tensions within-and-between BCs and SCs hamper advanced service implementation; (3) revealing how value-space tensions within-and-between BCs and SCs impact value co-creation; and, (4) demonstrating how different tensions manifest between BCs and SCs across the advanced services lifecycle.

Drivers of territorial servitization: An empirical analysis of manufacturing productivity in local value chains

A recent stream of literature has observed the tendency for advanced services, and particularly knowledge-intensive business services (KIBS), to grow near local manufacturing value chains, supporting a trajectory of growth based on territorial servitization (TS). However, it is still unclear what affects the coupling between KIBS and manufacturing. The paper addresses this research gap by analysing how local drivers of TS moderate the effect of KIBS co-location on manufacturing productivity. To test our hypotheses, we use a functional geographic unit characterized by a well-defined local value chain, i.e., Labour Market Areas (LMAs). The empirical examination of 611 Italian LMAs for the period 2014–2018 provides evidence that human capital availability is a key determinant of KIBS' contribution to manufacturing productivity. Importantly, our analysis shows that human capital impacts variously on TS outcomes, depending on the local setting and industry type. On the one hand, high levels of education help unleash the benefits of proximity to KIBS for manufacturers, especially in urban areas typically hosting high concentrations of knowledge-intensive sectors and supporting infrastructures. On the other hand, medium levels of education play a key role in non-urban areas specialized in traditional, low-tech manufacturing sectors. By helping untangle the drivers of positive TS outcomes, our results are informative for scholars and policymakers interested in developing specific policies to promote the renaissance of local manufacturing. The study may also help manufacturing firms gain a deeper understanding of the conditions allowing them to effectively benefit from TS and increase productivity. • TS varies based on the type of local setting and knowledge base of the area. • We employ a panel analysis on Italian LMAs to test our hypotheses. • KIBS affect manufacturing productivity variously depending on contextual factors. • Urban and Made-In-Italy LMAs rely on high and medium education levels respectively. • In Heavy Manufacturing LMAs, firms own internal capabilities to benefit from KIBS.

Digitalization as a way forward: A bibliometric analysis of 20 Years of servitization research

This paper conducts a bibliometric analysis of servitization and PSS by examining 690 selected papers from Web of Science database. Knowledge mapping techniques including collaboration analysis, co-citation analysis and keywords co-occurrence analysis methods are adopted in the bibliometric analysis. Our findings show that China and England are the top two countries publishing more papers, and Sweden, Germany, Switzerland and Denmark keep tight collaboration relationships with other regions. We also find that some active researchers play critical roles as interfaces to connect different research groups in the servitization and PSS fields. Some authors of highly cited papers in earlier years gradually turned to other research directions. In addition, ‘Digital PSS and servitization’, and ‘territorial servitization’ are found to be emerging trends in recent years. Although the earlier sustainability topics in the servitization field are more associated with eco-design and lifecycle extension, they gradually shift to sustainable business models in recent years. Compared with most of the literature reviews in the field, this study provides insights by revealing the distribution structure of literature, the collaboration relationship and the dynamic change of research trends with a transparent, repeatable and objective procedure.

Exploring the relationship between KIBS co-location and the innovativeness of the manufacturing firms in Latin America

Literature has provided empirical evidence showing the importance of location for understanding KIBS effective service provision. According to territorial servitization postulates KIBS are also fundamental for the development of the manufacturing firms. Despite KIBS can be an important source of innovation, limited attention is paid of KIBS in Latin America region. The purpose of this research is analysing the relationship between KIBS co-location and innovativeness of the manufacturing firms. Drawing on the World Bank Enterprise Survey 2017 for Latin-American countries, authors analyse 3,029 manufacturing firms using OLS method. Findings indicate that manufacturing firms’ location based on KIBS proximity is a critical determinant of innovativeness. This relationship is considerably stronger in Central American countries, where according to our data there is KIBS scarcity.

Territorial servitization: Conceptualization, quantification and research agenda

Territorial servitization is the analysis of how manufacturing firms and knowledge-intensive business service (KIBS) sectors collaborate in working towards a renaissance of manufacturing competitiveness within regions of developed economies. This editorial note provides four insights. First, it sums up the existing body of knowledge on the topic. Second, it quantifies and maps the territorial servitization activity in Spanish regions. Third, it presents and reflects on the collection of five papers in this special issue, which bring new insights into how geographical proximity, innovation systems, and KIBS heterogeneity benefit our understanding of territorial servitization. Finally, the study provides a number of yet unresolved topics that deserve further academic attention.

Does distance really matters? Assessing the role of KIBS proximity in firm´'s servitization capacity: evidence from the Basque Country

Servitization strategy is increasingly recognized as a key source of value with important competitive and economic potential across the globe. Over the years, it has been proven to contribute to territorial performance through the provision of services to manufacturing businesses. Such contribution, however, has been to a large extent consequential to the configuration of local industrial structures, and most importantly, by interconnectedness between manufacturing firms and knowledge intensive business services (KIBS) firms. Hence, the process of territorial servitization is highly conditioned to the association between manufacturing businesses and KIBS firms. To date, territorial servitization literature mostly describes the implications of KIBS firms for service deployment and service innovation in manufacturing, considering knowledge and technological capabilities as main variables for its success. Nevertheless, the literature is silent on how geographical distance between KIBS firms and manufacturing companies may affect servitization capacity. Therefore, this research attempts to disclose the importance of geographical distance of KIBS firms in manufacturers´ servitization capacity. In doing so, we analyze two manufacturing companies; Alpha and Beta, both located in the Basque country but collaborating with KIBS firms in different geographical areas, “inside” and “outside” the Basque region. Through a qualitative study based on (1) measuring firm’s capacity for servitization, and (2) in-depth interviews, results suggest that geographical distance in terms of proximity plays a key role on the KIBS-Manufacturer relationship for servitization capacity, and require to be considered as an important aspect for successful territorial servitization.

The role of county competitiveness and manufacturing activity on the development of business service sectors: A precursor to territorial servitization

This study evaluates how regional competitiveness and relevant properties of the manufacturing industry—i.e., size and rate of manufacturing firms—impact changes in the rate of business service firms. By employing fixed-effects regression models on a sample of 81 Costa Rican counties during 2010-2016, the findings reveal that the quality of the local environment positively affects business service specialization. Besides, manufacturing businesses contribute to increase in rate of business services; however, this effect is only significant in counties with a greater manufacturing base, that is, in counties with a critical mass of manufacturers, in terms of number of manufacturers.

Servitization and bioeconomy transitions: Insights on prefabricated wooden elements supply networks

Abstract Despite the academic research on servitization in the recent past, few studies have investigated how the increasing role of services as a change in production processes affects the evolving bioeconomy, pursuit of resource efficiency and improved sustainability. The servitization of manufacturing companies, the blurring of the lines between the manufacturing and services sectors as well as the role of territorial servitization in emerging technology fields are already being studied in several disciplines, but bioeconomy strategies connect these questions to primary production, natural resources and new bio-industries. To fill this void, we 1) elaborate an analytic framework for addressing servitization at multiple levels of transitions (individual companies, supply networks and socio-technical systems), 2) test it with data on three prefabrication supply networks for wooden elements, and 3) discuss the system dynamics how servitization affects bioeconomy transitions. The analyses exemplify that servitization resides at multiple levels in the increasingly integrated manufacturing processes. The analytical framework elaborates how renewal of wood products companies and the forest-based industries that supply to them is determined by these companies’ responses to the changes in customer industries and their ability to adapt to the evolving socio-technical regime. Better understanding is needed on the non-technological innovations and gradual reconfigurations due to servitization that can contribute to increasing efficiency and improve sustainability in bioeconomy transitions.

Servitization as A Tool to Increase Vitality of Ageing Rural Community

Abstract Recently, the EU policy measures have been widely applied to encourage early retirement from farming. Current age structure of society requires opposite approach. Key challenges for rural development policy aiming to increase quality of life of elder people are dealing not only with traditional help and support measures, but also with the involvement of elder generation into economic and social life. New EU agricultural policy measures should ensure that funding and institutional incentives support extending working and active social life of elder farmers. One of the possible ways to change the approach deals with servitization. However, despite implementation of service-driven business model in agriculture, which opened new possibilities to use knowledge and experience of old generation, the servitization movement is still weak in agriculture. Restricted adoption of service-driven business models in agriculture largely depends on the lack of research on this topic and guidelines for practitioners. The aim of this paper is to conceptualize the organizational model aiming to implement product-service system in agricultural business by joint efforts of elder farmers and beginning gardeners. Case study on innovative servitization initiative “Rent a piece of garden” in rural areas of Lithuania is used as an illustration of innovative business model in agriculture and territorial servitization with multifaceted impact on vitality of ageing rural community and as a source to gain new knowledge on how to organize similar projects.

Does public entrepreneurial financing contribute to territorial servitization in manufacturing and KIBS in the United States?

ABSTRACTThis study uses territorial innovation theory and research advances on territorial servitization to examine the effect of public financing on firm survival and performance in two critical sectors in the United States. The goal is to inform servitization efforts on the effect of public entrepreneurial financing to support the renaissance of manufacturing and the ever-growing knowledge-intensive business services (KIBS) sector. Results indicate that public start-up and expansion capital, as government loans and guaranteed loans, decrease firm survival in the KIBS sector and firm receipts in both sectors, when compared with private sources of capital. In sensitivity analyses, no effect is observed for government grants.

Servitizing industrial regions

ABSTRACTThe paper explores the evolving role of service sectors in relation to manufacturing activities within local systems of production and it discusses whether issues related to spatial proximity have shaped the value chains of manufacturing activities. Territorial servitization is defined here as the symbiotic recoupling between services and manufacturing that impacts on their relative value creation contribution to both value chains and consumers. The paper presents empirical evidence from the UK by means of employment data at the NUTS-2 level and by five-digit sector level.

Territorial servitization in Marshallian industrial districts: the industrial district as a place-based form of servitization

ABSTRACTThis paper is the first general study of territorial servitization in Marshallian industrial districts (MIDs). It introduces the novel idea of place-based servitization as a form of territorial servitization, which is then used conceptually to reframe the traditional perspective on MIDs, manufacturing places par excellence. Drawing on comparable quantitative data from Italy and Spain for 1991, 2001 and 2011, the paper then provides generalizable empirical evidence about the stylized facts of servitization in MIDs, casting a light on the transition to services of the MID as one model of place-based servitization.

The emergence of collaborative partnerships between knowledge-intensive business service (KIBS) and product companies: the case of Bremen, Germany

ABSTRACTRegional science research is silent on how collaborative partnerships between knowledge-intensive business services (KIBS) and product companies emerge. The paper addresses this theoretical gap by examining the role played by KIBS firms and by their interactions with product companies. It proposes a typology of territorial servitization – namely knowledge gap, regulation gap and capacity gap – wherein KIBS firms respectively play the pivotal roles of knowledge brokers, intermediators and integrators in driving collaborative partnerships. By conducting qualitative case studies, this paper explores the mechanisms by which product companies located in a high-tech multi-industry cluster in Bremen, Germany, collaborate with KIBS firms in fostering regional competitiveness.

Regional benefits of servitization processes: evidence from the wind-to-energy industry

ABSTRACTBy studying servitization processes and service competencies in the wind-to-energy industry in European regions, this paper provides a framework for territorial servitization. The framework resonates with the concepts of knowledge-intensive business services (KIBS) and industry life cycles, and its elements can be embedded into concepts of regional development (e.g., lead-market models, sustainability transitions, territorial innovation models). The framework suggests that regions benefit from servitization processes via the interplay of generating employment opportunities, enabling an efficient allocation of technology resources, opening up new markets, strengthening territorial competitiveness, raising the odds of securing employment in the consolidation period and enabling technological leaps.

Territorial servitization and new local productive configurations: the case of the textile industrial district of Prato

ABSTRACTThis paper addresses territorial servitization in manufacturing systems of small and medium-sized enterprises, introducing a framework for the interpretation of changes in local productive configurations and the assessment of territorial servitization trajectories. It includes three main variables: multiplicity of know-hows, transaction costs and the entrepreneurial drive. Moreover, it proposes a mixed methodology that elaborates proxies of these variables for empirical analysis. The methodology is tested by investigating the changing features of an archetypal case of Italian industrial district, the textile district of Prato, throughout the period 2005–13. Different scenarios seem to open up, highlighting the opportunities and difficulties of transition to strong territorial servitization trajectories.

Knowledge-intensive territorial servitization: regional driving forces and the role of the entrepreneurial ecosystem

ABSTRACTThis study analyzes how regional manufacturing characteristics, i.e., specialization and the size of new manufacturers, and the entrepreneurial ecosystem, i.e., contextual factors driving entrepreneurial actions, impact the rate of new knowledge-intensive business service (KIBS) firms. Its spatial analysis of 121 European regions reveals that the entrepreneurial ecosystem plays a decisive role in supporting KIBS formation rates in territories with a solid industrial fabric. The economic potential of more attractive neighbouring regions can be detrimental to regional KIBS formation rates. The study offers valuable implications on how the entrepreneurial ecosystem can facilitate the interaction between manufacturing and KIBS firms.

Antecedents and implications of territorial servitization

ABSTRACTThis paper examines the key antecedents and implications of territorial servitization in Central Europe and the Mediterranean. Territorial servitization is analyzed using 17 Spanish and 38 German NUTS-2 regions during the period 2010–14. The results indicate that, in terms of market size and economic activity, territorial servitization is significantly higher in regions with more knowledge-intensive business services (KIBS) deepening and where air and maritime transport have positive effects on territorial servitization. Interestingly, while the results confirm a positive relationship between patents and territorial servitization, patents show decreasing returns. Important implications for research, firms and policy-makers are discussed.

Territorial servitization: Exploring the virtuous circle connecting knowledge-intensive services and new manufacturing businesses

The mainstream servitization literature mostly describes the success of manufacturing firms in integrating services for their corporate clients. However, the literature is relatively silent on how territories capitalize on the potential interconnectedness between manufacturing firms and the knowledge-intensive business service (KIBS) sector. The analysis of the outcomes that result from the mutually dependent associations between manufacturing businesses and KIBS firms, a process that we call Territorial servitization, is of great relevance for academics and policy makers. This research hypothesizes that there is a positive symbiotic and bidirectional link between the growth in KIBS activity and employment generation by manufacturing sector start-ups. Furthermore, we scrutinize the mediating role over this relation of relevant industry characteristics, in our case the stock of manufacturing firms and the total number of freights transported. The empirical application considers a unique dataset created from multiple sources—the Global Entrepreneurship Monitor (GEM), the Spanish Institute of Statistics and Eurostat—for the 17 Spanish regions during the period 2006–2012. The results support the view that territorial servitization contributes to employment creation in manufacturing sectors. Territories with a vigorous manufacturing base benefit from a virtuous circle in which KIBS start-ups and newly formed manufacturers are connected through the economic activity of incumbent manufacturing firms. The study offers valuable insights for scholars and policy makers on how to implement specific policies—e.g., the development of digital infrastructures—that facilitate the interaction between manufacturing and KIBS businesses, thus fuelling territorial development.