Beyond single solutions: harnessing capability configurations for enhanced digital service innovation

What the paper says

Purpose Digital service innovation (DSI) is a crucial strategy for the manufacturing firms to capitalize on digital innovation and maintain competitiveness. DSI can be affected by the interaction of technological tools, technological applications and innovation environments. Little is known about how the configurations of these capabilities drive DSI. Therefore, this paper aims to investigate the harnessing capability configurations for enhanced DSI. Design/methodology/approach This paper, based on 401 manufacturers operating in China engaged in digital servitization, uses a multimethod strategy integrating symmetric (partial least squares-structural equation modeling [PLS-SEM]) and asymmetric (fuzzy set qualitative comparative analysis [fsQCA]) analyses to comprehensively examine the impact of digital service innovation capabilities on digital service innovation performance (DSIP). Findings The results of PLS-SEM show that five capabilities have a positive impact on DSI, but their effects are small. From a combination perspective, the results of the fsQCA show the presence of complementary effects among capabilities at the technological tool level, subject-activated level and contextual support level, revealing four equivalent paths that promote high DSIP. Originality/value Using a perspective from the technology affordance theory, this paper provides a holistic understanding of the role of single capabilities in promoting DSI and pioneers a tripartite capability framework, including the technological tool level, the subject-activated level and the contextual support level in DSI. Most significantly, the authors develop an equifinality matrix that identifies four archetypal capability configurations that achieve DSI equivalence, providing managers with strategic portfolio options under resource constraints.