Relevance and innovation of production-related services in manufacturing industry

Services are playing an increasingly important role in modern economies. But services and innovations in services are not only a phenomenon in the service sectors, they also occur in the manufacturing industry. Services in the manufacturing industry are product-related services which are offered to customers together with the main products as an integrated solution. Based on firm level data from the European Manufacturing Survey 2006 for Germany, this paper explores the empirical relevance of product-related services and service innovations for manufacturing enterprises. The paper empirically analyses which types of traditional and advanced services manufacturing firms offer to their customers. Furthermore, it is shown that product-related services and service innovations significantly contribute to the sales of manufacturing firms. Using a multivariate regression model, it can be shown that services are particularly important for manufacturers of complex products and single unit or small batch size manufacturers.