Digital dark matter within product service systems

Abstract

Purpose The unobserved benefits of digital technologies are described as digital dark matter. Product service systems (PSSs) are bundles of products and services that deliver value in use, which is unobserved but generates benefits. This paper aims to empirically quantify digital dark matter within PSSs and correlates that measure with national competitiveness. Design/methodology/approach A novel methodology establishes the link between customer needs and a product and digital service portfolio offered across ten developed economies. The case context is the music industry where product and services are often substitutes – a cannibalistic PSS. Consumer information is obtained from a unique database of more than 18,000 consumer surveys. Consumer demand for digital formats is modelled and predicted through logistic regressions. Findings The work provides inverse estimations for digital dark matter within PSSs by calculating the gap between supply and demand for digital offers – described as the business model challenge. The USA has the lowest business model challenge; the home of major companies developing digital technologies. Digital dark matter is shown to be positively correlated with national competitiveness and manufacturing competitiveness indices. Practical implications The success of a cannibalistic PSS requires good understanding of market demand. Governments embarking on soft innovation policies might incentivise the development of service-orientated business models based on digital technologies. Originality/value Work expands theory on the concept of digital dark matter to the PSS literature. Empirically, a novel method is proposed to measure digital dark matter.