Transformations  in
Business & Economics

CONVERGENCE OF ADVANCED MANUFACTURING AND MODERN SERVICES: AN ANALYSIS BASED ON CORRELATION AND HETEROGENEITY⁷
Lihua Zeng, Yongshi Hu, Lijuan Hou

ABSTRACT: The industrial convergence of advanced manufacturing and modern services represents a vital pathway for embracing the new wave of technological revolution and industrial transformation, which concurrently enhances the core competitiveness of the manufacturing, fosters the development of a modern industrial system, and facilitates the achievement of high-quality development.Promoting the deep convergence of the two industries has become a research hotspot worldwide. However, there are few studies that specifically focus on the factors influencing this convergence based on industrial correlation and heterogeneity.In this study, the forward-backward correlation degrees and positive-negative convergence levels were measured using the 2002-2020 input-output tables of China to explore the ways to improve the industrial convergence levels under various correlation degrees. A correlation-convergence matrix was built to identify the key industries with low convergence levels and to analyze the influencing factors under various correlation degrees. Moreover, the means to improve the convergence level of advanced manufacturing and modern services were explored. Results show that, the advanced manufacturing drives demand for the modern services, while the modern services increasingly support the supply of the advanced manufacturing. The positive convergence level increases in a fluctuating manner, whereas the negative convergence level declines continuously. While the advanced manufacturing and new service industries undergoing digitalization exhibit a high level of convergence, despite the digital transformation and upgrading of traditional service industries, their degrees of correlation and levels of convergence with advanced manufacturing remain low. The grey relational degrees of the industrial convergence level and the influencing factors under various correlation degrees are highly consistent. Industrial convergence level has the highest relation with policy support, openness, research and development input, population concentration, and information technology level. This study supplements the research on the driving mechanism of the convergence of advanced manufacturing and modern services. It is conducive to facilitate deep convergence of the two industries and provides a decision-making reference for high-quality economic development and global competitiveness improvement of countries and regions in the world.

KEYWORDS:  advanced manufacturing, modern services, industrial correlation, industrial convergence, input-output method.

JEL classification:  L6, L8, O14, R11.

⁷Acknowledgments:  We gratefully acknowledge the financial support by Fujian Provincial Social Science Foundation(Grants: FJ2021B038); Fujian University of Technology Scientific Research Start-up Foundation (Grants: GY-S20009).