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Absorptive capacity, technological collaboration and servitization are analyzed to establish ways to overcome the balance between products and services in manufacturing companies. A fresh perspective is introduced by presenting a framework for innovation strategy, moving beyond product-based R&D.

The hypotheses are tested using data on Spanish firms in the high-tech chemical and pharmaceutical industries through ordinary least squares regression analysis. The sample consists of 112 manufacturing firms included in the Spanish Survey of Business Strategies.

The results show that absorptive capacity facilitates servitization and that technological collaboration moderates the relationship between absorptive capacity and servitization. The synergies between absorptive capacity and technological collaboration for servitization are recognized from the perspective of open innovation as a way of resolving the trade-off between products and services.

Future research should introduce more sources of collaboration by broadening the value chain perspective. Other approaches to innovation may also be considered, including relationships to process innovation.

The results can provide meaningful guidance for companies to determine the key opportunities of servitization driven by absorptive capacity, and the best ways to leverage open innovation and collaboration strategies to exploit such approaches.

This research enriches theories on servitization, open innovation and innovative behavior. Open innovation strategy should be linked to greater servitization activity and should support an open service strategy. This approach is crucial for building innovation capabilities through technological collaboration.

Digital service innovation (DSI) is a type of technological innovation that is recognized in practice in the innovation structure of companies. Given the breadth of digital technologies that enable digital services and the variety of these services, analysis is needed to discern the nature of these services, as well as the process that culminates in co-innovation. The literature on DSI is fragmented and spread across multiple research areas. This fragmentation impedes conceptualization of the elements that constitute DSI. This paper describes the nature of DSI through the process and elements of initiation, adoption and routinization of DSI in the context of digital service platforms (DSPs).

This paper presents a single exploratory case study of a provider of a leading digital solution in customer relations. The data analysis is based on abductive reasoning.

The paper conceptualizes the nature of DSI and describes the process and elements of DSI (phases, actors, functions and interactions). It contributes to building a common language for DSI research in service management. The analysis shows that DSI in DSPs is synonymous with co-innovation. This paper offers insight into how co-innovation occurs, using hybrid agile methodologies with the coordination of multiple actors and multilateral interactions.

The originality and value of the study reside in its conceptualization and analysis of what is meant by DSI. The components of the service and the technological requirements for not only provision but also ideation and development appear to be inseparable. The study unveils the mechanisms that turn a digital service solution into a co-innovative proposal. This knowledge can facilitate scalability in digital services.