This Digital Economy (DE) Network Plus will deliver a vibrant community that will position the UK as the internationally leading research hub for Digitally Enhanced Advanced Services. Rather than focus on the product or service that is delivered DEAS focuses on how the product or service is used. This is a major change in how firms earn money and is being enabled by transformative digital technologies that allows for example, payment per use or availability or outcome. The impact of these changes is in firm productivity. The traditional focus of productivity (outputs/inputs) is on internal efficiency. However, digital technologies can also transform the value of the output (payment for use, availability or outcome). Haldane (Chief Economist of the Bank of England) in his recent report on productivity puzzle (essentially stagnant growth since the financial crash) argues that despite the advent of the digital age and their adoption by some leading companies there is a very long tail of poorly productive firms across all sectors. He calls for the development of, for example, online tools that will speed the process of technological diffusion to the long tail. The development of the underpinning digital technologies for the purposes of developing DEAS is the key research challenge adopted by this Network+.

This programme will establish evidence on how servitization impacts both economic productivity and environmental performance (i.e., net-zero and the green economy), and use these insights to influence industrial policy and practice in the UK. It will explain whether, when, and how to encourage the adoption of servitization to maximise the economic and societal impact. The programme will begin by (i) developing a strong theoretical foundation based on prior research on business model innovation and value networks, then (ii) engage in theory building through collaborations with a range of industrial partners that are adopting servitization. These insights will (iii) enable econometric models to quantify impacts on productivity and environmental performances, and through experimentations with these (iv) identify a range of scenarios to maximise the benefits to the UK. Deliverables will include (i) an open-access repository for the scientific, policy, and practice communities, (ii) a set of reference models which will allow firms to translate our findings quickly to shape industrial best practices, and (iii) a series of policy and practice papers and associated workshops and events to influence decisions around industrial policy associated with productivity and de-carbonisation.