Service sector response to the Fourth Industrial Revolution: strategies for dissemination and acceptance of new knowledge

ABSTRACT

The Fourth Industrial Revolution (4IR) represents the ongoing fundamental transformation of the economy, based on disruptive technological change, and is not limited to the manufacturing sector but is expanding to the service sector. This study aims to establish transformation strategies for the service sector to embrace 4IR technology by investigating the firm-level determinants of its adoption and development. Our empirical analysis was performed by the integrated perspective of dissemination and acceptance of new knowledge, and we checked robustness of analysis result by verifying through various estimation methods. This study finds that, for service firms, the business family network and the external collaboration as well as the internal resources (patent rights and internal R&D) play a significant role in decision of adopting or developing 4IR technology. In the perspective of new knowledge acceptance, we found that increasing labour flexibility and labour productivity by performance incentives enhances an organisation’s capability to swiftly adjust to technological change. This study contributes to a better understanding of 4IR in the service sector with the knowledge-based and innovation resistance view, and suggests novel strategic implications for technology diffusion.

KEYWORDS:

• Fourth Industrial Revolution
• Knowledge-based view
• Innovation resistance theory
• Technology adoption

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 The first industrial revolution can be described by mechanization through steam power, the second made mass production possible by electric power, and the third used ICT for production automation (Schwab 2017).

2 It is converted by Purchasing Power Parity rate in 2018.

Additional information

Funding

This research was supported by the Chung-Ang University Research Grants from 2018 to 2019.

Notes on contributors

Hyuk Chung

Hyuk Chung is an Associate Professor at School of Economics in Chung-Ang University. He received his doctorate at the University at Albany, State University of New York. While his academic interest stems from economic growth and macroeconomic dynamics of technological change, it also lies in firm-level dynamics of ICT development, R&D investment and intangible asset accumulation.

Kyunam Kim

Kyunam Kim is currently an Associate Professor at Department of Economics in Kyonggi University. He obtained his PhD in Economics from Seoul National University. His area of interests include Economics of Innovation, Dynamics in Technological Change, Intellectual Property, and Innovation Policy.