With the rapid advancement of modern information technology, the integration of manufacturing and service industries has become a dominant trend in contemporary industrial development. This convergence is not only driving global industrial transformation but also serving as a key engine for economic upgrading. The two sectors now exist in a co-ecological environment, where they are interdependent, interactive, and mutually reinforcing. This synergy continuously fosters new industries and business models, facilitating a shift from a product-based economy to a service-oriented one, and from traditional manufacturing to a more advanced, service-integrated production system.
The integration of manufacturing and services is primarily reflected in six major trends. Understanding these trends is crucial for shaping strategic economic adjustments, promoting industrial upgrades, and accelerating the growth of the service sector.
**Trend 1: Manufacturing Service and Service Manufacturing Develop Opposite Industry Characteristics**
The trend of manufacturing service is evident in both input-output structures and operational models. On one hand, manufacturing increasingly relies on service inputs, with about 70% of manufacturing costs attributed to services such as R&D, finance, logistics, and business services. In developed countries, producer services account for 60–70% of total services, while productive services make up nearly 43% of GDP. On the other hand, the value-added structure of products is shifting—manufacturing processes take up a smaller share, while services like design, R&D, and logistics gain prominence. Many multinational companies now derive over 50% of their revenue from services, effectively transforming them into service enterprises.
Conversely, the service industry is increasingly involved in manufacturing. Service providers, especially those with high-end capabilities in R&D or logistics, are embedding themselves within manufacturing firms through OEMs and chain operations. Some service companies even establish their own manufacturing facilities to capture higher value in the supply chain.
This evolving relationship transforms the traditional industrial value chain into a converged model that includes both manufacturing and service value additions. Compared to pure manufacturing or service chains, this integrated model offers broader profit margins and greater growth potential, leading to significant structural upgrades at the industrial level.
**Trend 2: Service Outsourcing Becomes the Main Mode**
Service outsourcing has become a central driver of global service expansion, deepening the division of labor between manufacturing and service sectors. It enhances specialization, strengthens the link between industries, and promotes the scale, internationalization, and marketization of the service industry. At the same time, it boosts manufacturing productivity and competitiveness, becoming a key tool for enhancing core capabilities.
More manufacturers are outsourcing non-core functions to specialized service providers, allowing them to focus on their main business. This symbiotic relationship between manufacturing and services has led to increased demand for productive services globally, often through onshore or offshore outsourcing. With the expansion of multinational corporations' global networks, service outsourcing has become a powerful force in shaping the global economy.
In 2012, the global service outsourcing market reached $975 billion, growing by 30–40% annually. By 2020, it was expected to exceed $1.65 trillion to $1.8 trillion.
**Trend 3: Agglomeration and Matching Become an Industrial Organization Form**
Industrial agglomeration is a common feature in the development of both manufacturing and service sectors. It serves as a primary organizational model for integrating the two industries and achieving spatial and regional integration. Industrial parks and clusters act as key platforms for this integration. For example, in a pharmaceutical cluster, not only are manufacturing companies concentrated, but also various support services like R&D, logistics, and IP management thrive, forming a comprehensive service ecosystem.
This form of agglomeration enables resource sharing—infrastructure, technology, and talent—reducing costs and increasing efficiency. It fosters collaboration, creates economies of scale, and supports regional economic development by enhancing the competitiveness of both manufacturing and service industries.
**Trend 4: The Entire Industry Chain Becomes a Profit Growth Model**
As the integration of manufacturing and services deepens, the industrial value chain is restructured. New technologies and business models lead to more value-added segments in areas such as R&D, procurement, distribution, and after-sales services. These service-oriented phases now dominate the industrial process, significantly influencing overall efficiency, value creation, and profitability.
The performance of these service sectors becomes a decisive factor in determining the value and control of the entire industry chain, making them central to industrial transformation and upgrading.
**Trend 5: Information Technology Becomes the Technological Carrier**
Information technology acts as a key enabler of the integration between manufacturing and service industries. Since the 1990s, innovations like intelligent manufacturing, crowdsourcing, e-commerce, and online banking have emerged, further deepening and expanding the integration. The boundaries between manufacturing and services are blurring, creating a "you-have-me, I-have-you" relationship.
Companies like IBM and GE exemplify this trend, using IT to drive service innovation and integrate digital solutions into traditional manufacturing processes.
**Trend 6: Production City Integration Becomes an Implementation Model**
The integration of production and cities has become a mainstream model for modern industrial parks. When planning such zones, attention is given not only to industrial support but also to surrounding living facilities, ensuring a livable environment for workers. Catering, shopping, entertainment, and housing create a lifestyle circle around industrial areas, fostering a seamless connection between manufacturing and local services.
This model supports sustainable development and enhances the quality of life for workers, reinforcing the integration of industry and community.
(Professor Wang Xiaohong, China International Economic Exchange Center)
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