The Status of Servitization and its Effects on Productivity in Korea

Despite its importance, government support for firms that adopt servitization in their businesses is severely lacking. This is because there is little known about the status of servitization; little is known about which firms are likely to implement servitization, how many firms have adopted servitization in their businesses, or the degree to which servitization increases business performances. A major problem is that a lack of empirical studies has impaired effective policy development for servitization firms. This paper aims to describe the current status of servitization in Korea and quantify whether servitization firms perform better than non-servitization firms and to what degree. The work also studies the impacts of servitization on firm productivity. This paper concludes with policy implications for servitization