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The digital transition process is an important strategic initiative for manufacturing companies to ensure continued competitiveness. The purpose is to investigate the relationship between firms' additive manufacturing (AM) readiness and product and process innovation and how this process is mediated by firms' make-or-buy decisions regarding performing AM processes internally or buying AM services from external partners.

The paper is based on a questionnaire survey including full answers from 157 small- and medium-sized manufacturing companies.

Results show a positive relationship between AM readiness and both product and process innovation. Results also reveal that firms with higher readiness invest more in in-house AM, which in turn promotes innovation. There was no significant association between AM readiness and the use of external AM services. Nonetheless, buying external AM services is still associated positively with innovation.

Data in the questionnaire survey are provided by single respondents from each company and are only based on Danish respondents.

The results indicate that firms' product and process innovation benefits from higher AM readiness derive from increased investment in in-house AM rather than from increased use of external AM services. This also signifies that firms with lower levels of AM readiness buy external AM services and derive the innovation benefits hereof.

The paper delivers new, empirically found knowledge about how small- and medium-sized manufacturing can improve innovation by both making and buying AM services.