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Digital dark matter within product service systems

Ferran Vendrell-Herrero (Managerial Economics, University of Birmingham, Birmingham, UK)
Vasileios Myrthianos (Polytechnic University of Catalonia, Barcelona, Spain)
Glenn Parry (Strategy and Operations Management, University of the West of England, Bristol, UK)
Oscar F. Bustinza (Faculty of Economics and Business Studies, University of Granada, Granada, Spain)

Competitiveness Review

ISSN: 1059-5422

Article publication date: 16 January 2017

740

Abstract

Purpose

The unobserved benefits of digital technologies are described as digital dark matter. Product service systems (PSSs) are bundles of products and services that deliver value in use, which is unobserved but generates benefits. This paper aims to empirically quantify digital dark matter within PSSs and correlates that measure with national competitiveness.

Design/methodology/approach

A novel methodology establishes the link between customer needs and a product and digital service portfolio offered across ten developed economies. The case context is the music industry where product and services are often substitutes – a cannibalistic PSS. Consumer information is obtained from a unique database of more than 18,000 consumer surveys. Consumer demand for digital formats is modelled and predicted through logistic regressions.

Findings

The work provides inverse estimations for digital dark matter within PSSs by calculating the gap between supply and demand for digital offers – described as the business model challenge. The USA has the lowest business model challenge; the home of major companies developing digital technologies. Digital dark matter is shown to be positively correlated with national competitiveness and manufacturing competitiveness indices.

Practical implications

The success of a cannibalistic PSS requires good understanding of market demand. Governments embarking on soft innovation policies might incentivise the development of service-orientated business models based on digital technologies.

Originality/value

Work expands theory on the concept of digital dark matter to the PSS literature. Empirically, a novel method is proposed to measure digital dark matter.

Keywords

Citation

Vendrell-Herrero, F., Myrthianos, V., Parry, G. and Bustinza, O.F. (2017), "Digital dark matter within product service systems", Competitiveness Review, Vol. 27 No. 1, pp. 62-79. https://doi.org/10.1108/CR-11-2014-0037

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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