Servitisation of European manufacturing: evidence from a large scale database

Abstract

Manufacturing firms increasingly produce and provide services along with or instead of their traditional physical products. The goal of this paper is to provide new evidence for this servitisation of European manufacturing and test previous findings based on case studies with a large, firm-level data set. Empirical results indicate that service turnover of manufacturing firms is still small compared to the turnover with physical products. National differences play only a minor role in explaining the degree of servitisation. Firm size is of more relevance. Results reveal a U-shaped relationship between firm size and servitisation which points to advantages of both, small and large firms in servitisation. Moreover, servitisation is positively related to product complexity and the likelihood that the firm introduces product innovation.

Keywords:

• servitisation
• knowledge intensive services
• structural change

Acknowledgements

The authors thank Mats Marcusson (European Commission, DG Enterprise and Industry), Michael Peneder (Austrian Institute for Economic Research), and Robert Stehrer (the Vienna Institute for International Economic Studies) and two reviewers for their valuable comments. We also thank Andrea Bikfalvi (University of Girona), Paul Ligthart (Radboud University of Nijmegen), Iztok Palčič (University of Maribor), Mette Preaest Knudsen (University of Southern Denmark), Jasna Prester (University of Zagreb), Robert van der Have (VTT Technical Research Centre of Finland), and Bruno R. Waser (Lucerne University of Applied Sciences and Arts) for providing the data. Part of the work was done within the European Commission project B2/ENTR/05/091-FC and was financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Support by the European Commission in the analysis and interpretation of the data is gratefully acknowledged.