Industry digitalization: Value creation, innovation, and opportunities by transforming the products & services

Abstract: Numerous companies experienced the digital transformation of their functional and operationalstrategies. Among all the business sectors, which are being transformed, the industrial sector exhibits aconsiderable delay in transforming its operational strategy. The most significant underlying reason isthe high expenditure involved in upgrading the hardware components and infrastructure. According tothe literature, transformed companies enjoyed higher revenues and became more innovative. However,in most researches, an instant character was given to the transformation, and only a few years wereinvestigated; therefore, there was a need to describe the dynamics of the transformation with differentstages based on how it was executed. The digital transformation variable constructed in this studycontained the missing information from both the time the transformation was implemented and thespecific level it has reached. In particular, the investigated sample included ten firms from theindustrial sector of motion, automation, and robotics over ten years, and a panel data analysis wasconducted by utilizing the developed digital transformation variable. The analysis revealed that boththe business revenue and patented innovations were positively related to the transformation. Thetransformation brought immediate results to the innovation aspects, and all the examined companiesimproved their patented innovations. In contrast, the relationship of the business revenue with thelevel of the digital transformation was found impaired compared to previous studies. The investigationof the impact of the time lag resulted in the same conclusions for both explored variables, whereas themodel has been found robust against changes in the constructed digital transformation variable. Sincemore time and resources are required for the industrial sector to enjoy the transformation benefits, thissector must be studied independently by understanding its unique implications for the interpretation ofthe transformation outcomes.