What's Happening?
IFS has released the State of Service 2025 report, revealing a significant shift in the manufacturing sector from product-focused to service-driven growth. The report, developed with Accenture, indicates
that servitization is becoming a strategic profit engine, with 39% of manufacturers prioritizing it for long-term growth. Industrial AI and sustainability are key factors driving this transformation, with manufacturers increasingly adopting cloud infrastructure and emerging technologies. Despite high AI usage in service delivery, many manufacturers have yet to scale AI across operations, highlighting a gap in technological integration.
Why It's Important?
The shift towards service-driven growth in manufacturing represents a fundamental change in industry dynamics. As manufacturers focus on servitization, they can enhance customer experiences and create new revenue streams. The integration of Industrial AI and sustainability practices is crucial for maintaining competitiveness and meeting evolving consumer expectations. This transformation could lead to increased efficiency, reduced environmental impact, and improved profitability for manufacturers.
What's Next?
Manufacturers are expected to accelerate their AI integration and modernization efforts to fully leverage service-driven growth. Addressing barriers such as data governance and cybersecurity will be essential for scaling AI across operations. Companies may invest in workforce reskilling to adapt to new service models, ensuring they have the capabilities to thrive in a digitally enabled environment.
Beyond the Headlines
The emphasis on sustainability and circular economy practices reflects broader industry trends towards environmental responsibility. As manufacturers embed these practices, they contribute to global efforts to reduce waste and extend asset lifecycles. The successful adoption of service-driven models could redefine industrial competitiveness, influencing regulatory frameworks and investment strategies.
