Smart Manufacturing and Enterprise Breakthrough Innovation: Co-Existence Test of “U-Shaped” and Inverted “U-Shaped” Relationships in Chinese Listed Companies

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

Summary

The paper distinguishes the impact of smart manufacturing on the width vs. depth of breakthrough innovations. The width refers to the firm’s innovation into new domains of expertise. Using the degree of industrial robot penetration as a measure of smart manufacturing (along with other measures for robustness), the paper finds that smart manufacturing has a u-shaped impact on the width of innovation – negative impact at low levels of smart manufacturing but positive at higher levels. This supports the idea that venturing into new domains of expertise comes with high degrees of uncertainty initially but pay offs with greater investment as the firm gains domain expertise. In contrast, the paper finds that smart manufacturing has an inverted u-shape effect on the depth of innovation – given the existing expertise, there is less uncertainty initially in pursuing the depth of innovation. However, the benefit tails off at greater scale as there is decreasing returns to investment.

The paper also examines the moderating role of service-oriented transformation on the relation between smart manufacturing and breakthrough innovations. The main hypothesis (as I understood) is that service-oriented transformation moderates the negatives and amplifies the benefits of pursuing breakthrough innovation, in both width and depth. The idea is that service-oriented transformation makes the benefit of pursuing more diversified domain of expertise more valuable in serving the diverse set of customers’ needs. Similarly, it can also expand on the firms’ insights in its existing domain of expertise, which makes the pursuit of depth of innovation easier as well. In the data, though, the paper finds that serve-oriented transformation basically amplifies the u-shape patterns, making the slopes more dramatic in both sides. Thus, it makes the negative stronger, and the positive stronger, which seems a bit inconsistent with the hypothesis.

 

Comments

I think overall the results and the contributions of the paper are straightforward and pretty clear, though it may not be groundbreaking. I have two main comments:

First, it was still unclear to me why the service-oriented transformation would lead to amplifying the u shape (and the inverted u shape) patterns on innovation. It sounded to me like service-oriented innovation would soften the negative impacts, thereby making the u shape flatter. More clarification on this would benefit the paper.

Second, the managerial implication of the study is still unclear. The paper provides very generic guidance. For example, the authors state that “Government agencies should provide differentiated support and guidance according to the needs of enterprises at different stages of intelligent transformation, helping them overcome initial technological barriers and stimulate the width and depth of innovation activities.” This sounds like truism rather than a valid implication from the finding of the study. More specific implication that falls directly form the findings of the paper (u shape patterns) would make the paper’s contribution more attractive for the broader audience.

Author Response

Comments 1: First, it was still unclear to me why the service-oriented transformation would lead to amplifying the u shape (and the inverted u shape) patterns on innovation. It sounded to me like service-oriented innovation would soften the negative impacts, thereby making the u shape flatter. More clarification on this would benefit the paper.

Response 1: Thank you for pointing this out. Based on your Comment, we have made the following modifications to the manuscript: First, In the demonstration part of the research hypothesis, we elaborate on how service-oriented transformation can reduce the negative impact of smart manufacturing by improving customer relationships and market responsiveness, flattening the negative part of the U-shaped relationship. At the same time, we further explain that service-oriented transformation in the mature stage of smart manufacturing applications can improve resource integration and market expansion capabilities, thereby weakening the negative impact and flattening the negative part of the inverted U-shaped relationship. We also modified the research hypothesis accordingly. The content of this part is revised as follows(It's on page 7-8, lines 275-323):

  “Service-oriented transformation is a critical strategic synergy condition affecting the relationship between smart manufacturing and enterprise breakthrough innovation [35]. Transitioning from a conventional product-centric model to an approach centered around service and customer value, service-oriented transformation not only changes the business model of enterprises but also enhances their adaptability to market changes and deepens their understanding of customer needs [36]. Additionally, the concept of sustainable degrowth, which involves reducing production and consumption in a fair manner to improve human well-being and ecological health, underscores the importance of service-oriented transformation in modern enterprises [37]. This transformation also impacts the relationship between smart manufacturing and both the width and depth of enterprise breakthrough innovation. Corporate reporting now emphasizes creating value for all stakeholders, not just financial outcomes, highlighting the role of service-oriented transformation in corporate sustainability [38]. This study posits that service-oriented transformation can positively moderate the "U-shaped" relationship between smart manufacturing and the width of enterprise breakthrough innovation, as well as the inverted "U-shaped" relationship between smart manufacturing and the depth of enterprise breakthrough innovation. Specifically, against the backdrop of service-oriented transformation, enterprises place greater emphasis on the diversity and customization of market demands [39], leading to a more proactive exploration of diversified domains in the early stages of smart manufacturing application. This accelerates and accentuates the turning point in the positive "U-shaped" relationship between smart manufacturing and innovation width. Service-oriented transformation deepens the understanding of customer needs [40], promoting rapid expansion in the width of innovation within the application of smart manufacturing technologies. Additionally, the application of digital technologies can significantly improve efficiency and management across various fields [41]. By enhancing customer relationships and market responsiveness, service-oriented transformation reduces the initial negative impacts of smart manufacturing, thereby flattening the negative part of the U-shaped relationship. On the other hand, service-oriented transformation also strengthens the in-depth insights into specific market and technological domains [42], making enterprises focus more on sustained growth in innovation depth during the deep application of smart manufacturing technologies, thereby avoiding a decrease in innovation depth due to over-application after reaching a certain level. In the mature stages of smart manufacturing application, service-oriented transformation enhances resource integration and market expansion capabilities, which helps mitigate the negative impacts, making the inverted U-shaped relationship flatter. Therefore, service-oriented transformation not only enhances the promotional effect of smart manufacturing on the "U-shaped" relationship with enterprise innovation width but also plays a positive moderating role in the inverted "U-shaped" relationship between smart manufacturing and the depth of enterprise breakthrough innovation. Based on this, the study proposes:

  H2a. Service-oriented transformation positively moderates the "U-shaped" relationship between smart manufacturing and the width of enterprise breakthrough innovation, reducing the negative impacts of smart manufacturing on the width of breakthrough innovation and facilitating sustained growth in innovation width.

  H2b. Service-oriented transformation positively moderates the inverted "U-shaped" relationship between smart manufacturing and the depth of enterprise breakthrough innovation, reducing the negative impacts of smart manufacturing on the depth of breakthrough innovation and facilitating sustained growth in innovation depth.”

  Second, we have revised accordingly in our discussion of the regression results (page 12-13, lines 415-433):

  “Table 3 delineates the moderating effects of service-oriented transformation on the nonlinear influence of smart manufacturing. Specifically, the regression outcomes from columns (1) to (3) reveal that the interaction between smart manufacturing and service-oriented transformation is significantly negative, whereas the interaction with its squared term is significantly positive. This indicates that with the augmentation of service-oriented transformation, the "U-shaped" relationship curve between smart manufacturing and the width of enterprise breakthrough innovation becomes flatter. It implies that an increase in service-oriented transformation reduces the initial negative impacts of smart manufacturing on the width of enterprise breakthrough innovation, thereby promoting an increase in innovation width at lower levels and supporting hypothesis H2a. Results in columns (4) to (5) demonstrate that the interaction between smart manufacturing and service-oriented transformation is significantly positive, while the interaction with its squared term is significantly negative. This signifies that as service-oriented transformation increases, the "inverted-U-shaped" relationship curve between smart manufacturing and the depth of enterprise breakthrough innovation becomes flatter. When service-oriented transformation exceeds the critical point of the "inverted-U-shaped" relationship and continues to increase, it mitigates the negative impacts of smart manufacturing on the depth of breakthrough innovation, facilitating sustained growth in innovation depth and supporting hypothesis H2b.”

Comments 2: Second, the managerial implication of the study is still unclear. The paper provides very generic guidance. For example, the authors state that “Government agencies should provide differentiated support and guidance according to the needs of enterprises at different stages of intelligent transformation, helping them overcome initial technological barriers and stimulate the width and depth of innovation activities.” This sounds like truism rather than a valid implication from the finding of the study. More specific implication that falls directly form the findings of the paper (u shape patterns) would make the paper’s contribution more attractive for the broader audience.

Response 2: Thank you for pointing this out. We agree with the comment that “More specific implication that falls directly form the findings of the paper (u shape patterns) would make the paper’s contribution more attractive for the broader audience”. Therefore, we have made the following modifications to the manuscript (It's on page 19-20, lines 561-597):

  “For governments, smart manufacturing has differential impacts on the various dimensions of enterprise breakthrough innovation. When formulating and implementing policies to promote smart manufacturing, governments need to dialectically and comprehensively understand the function of this technology in facilitating the progression of enterprise breakthrough innovation. The conclusions of this study suggest that moderate policy support and guidance can encourage enterprises to better utilize smart manufacturing technology, optimizing the width and depth of breakthrough innovation. Governments should provide customized support and guidance tailored to the needs of enterprises at different stages of intelligent transformation. For enterprises in the early stages, service-oriented transformation can mitigate initial technological challenges and negative impacts. Government agencies can provide subsidies, tax incentives, and grants for adopting service-oriented strategies that enhance customer relationships and market responsiveness. For more mature enterprises, government support should focus on facilitating resource integration and market expansion through funding for research and development, infrastructure investments, and policies that promote collaboration between enterprises and research institutions. This support can ensure sustained growth in innovation depth and prevent performance decline after reaching a critical point.

  For enterprises, the integration of smart manufacturing and service-oriented transformation offers new opportunities for growth and innovation. Enterprises should fully recognize the potential of smart manufacturing technology and make strategic plans based on their technological adaptability and market demands. Specifically, enterprise managers should focus on integrating intelligent technology with existing business processes and corporate culture to promote innovation exploration across multiple domains. During the early stages of smart manufacturing implementation, service-oriented transformation can mitigate initial technological challenges by enhancing customer relationships and market responsiveness, thereby promoting an increase in innovation width. As smart manufacturing applications mature, enterprises should emphasize resource integration and market expansion capabilities to ensure sustained growth in innovation depth. Strategic investments in service-oriented technologies, such as customer relationship management (CRM) systems and market analytics tools, are essential. Additionally, training and development programs that emphasize the importance of service orientation and customer value creation can foster an adaptive and innovative culture within organizations. By focusing on these strategies, enterprises can effectively balance and optimize the width and depth of breakthrough innovation, leveraging the moderating role of service-oriented transformation to enhance the positive impacts of smart manufacturing.”

Author Response File: Author Response.docx

Reviewer 2 Report

Comments and Suggestions for Authors

Please add the following references:

- https://doi.org/10.1007/s11356-022-18596-2

- https://doi.org/10.1016/j.ijme.2023.100847

 

- https://doi.org/10.3390/su15086633

Comments on the Quality of English Language

Please add the following references:

- https://doi.org/10.1007/s11356-022-18596-2

- https://doi.org/10.1016/j.ijme.2023.100847

 

- https://doi.org/10.3390/su15086633

Author Response

Comments 1: Please add the following references:

- https://doi.org/10.1007/s11356-022-18596-2

- https://doi.org/10.1016/j.ijme.2023.100847

- https://doi.org/10.3390/su15086633

Response 1: Thanks for your advice, I have added these three references to my references:

“37. Comoli,M.;Tettamanzi, P.; Murgolo, M. Accounting for 'ESG' under Disruptions: A Systematic Literature Network Analysis. Sustainability 2023, 15, 6633.

38. Tettamanzi, P.; Venturini, G.; Murgolo, M. Sustainability and Financial Accounting: a Critical Review on the ESG Dynamics. Environ. Sci. Pollut. Res. 2022, 29, 16758-16761.

39. Tettamanzi, P.; Minutiello, V.; Murgolo, M. Accounting education and digitalization: A new perspective after the pandemic.Int. J. Manag. Educ. 2023, 21, 100847.”

The specific references are on page 7, line 280-287 and page 8, line 299-300 of this study.

In addition, I invited a colleague whose native language is English to help me revise this study to ensure the correctness of the English language.

Author Response File: Author Response.docx

Reviewer 3 Report

Comments and Suggestions for Authors

I recommend adding definitions for key concepts such as smart manufacturing, breakthrough innovation, intelligent technology, U-shaped relationship, and the width and depth of enterprise breakthrough innovation in the chapter 2.1.

Please remove the references no 43 - 50.

The article is well-structured, the research is relevant, and the methodology and results are presented with high quality. As the authors point out, the outcomes are limited by the sample of Chinese companies from the A-list. It would be interesting to analyze the companies outside of China, for example in the EU and the USA.

Author Response

Comments 1: I recommend adding definitions for key concepts such as smart manufacturing, breakthrough innovation, intelligent technology, U-shaped relationship, and the width and depth of enterprise breakthrough innovation in the chapter 2.1.

Response 1: Thank you for pointing this out. We agree with this comment. Therefore, we have added definitions for key concepts of smart manufacturing, breakthrough innovation, intelligent technology in the chapter 2.1. We added the following(page 4, lines 148-160):

    “Smart manufacturing refers to the process by which the manufacturing industry utilizes advanced manufacturing technology and next-generation information and communication technology to conduct intelligent design, production, management, and services [18]. The core system of smart manufacturing is intelligent technology, because intelligent design, intelligent production, intelligent management, and intelligent service are all supported by intelligent technology [19]. Intelligent technology refers to the integration of advanced computing systems and artificial intelligence (AI) to enable machines and systems to perform tasks that typically require human intelligence [20]. Breakthrough innovation is characterized by significant, cutting-edge, discontinuous, and revolutionary advancements that have a substantial impact on markets and industries [21]. The relationship between smart manufacturing, with its core of intelligent technology, and breakthrough innovation can be explained using the Technology Acceptance Model (TAM) and the diffusion theory of innovation.”

    In addition, definitions for the width and depth of enterprise breakthrough innovation have already been explained in Chapter 1. Introduction (page 3, lines 87-96), such as: “drawing from Mitchell's (2024) classification of enterprise innovation motives [14], this study starts with the motives for enterprise breakthrough innovation and divides it into two dimensions: diversity and cross-domain expansion aimed at entering new markets, developing new technologies or services, and implementing new business models across various business domains, which is the width of breakthrough innovation; and significant technological breakthroughs in specific fields aimed at fundamentally improving or completely redesigning specific technologies, products, or services, leading to significant performance improvement, substantial cost reduction, or the creation of completely new user experiences, which is the depth of breakthrough innovation [15].” This placement is more appropriate for the context. 

Comments 2: Please remove the references no 43 - 50.

Response 2: Thank you very much for your correction. We apologize for the oversight in not removing the superfluous content from the template during our initial submission. Based on your suggestion, we have removed the original references no. 43-50. Additionally, due to comments from other reviewers, we have added some new references. The current list of references is now accurate. Thank you again for your careful reading and valuable feedback.

Comments 3: The article is well-structured, the research is relevant, and the methodology and results are presented with high quality. As the authors point out, the outcomes are limited by the sample of Chinese companies from the A-list. It would be interesting to analyze the companies outside of China, for example in the EU and the USA.

Response 3: Thank you for your positive comment and valuable suggestion. We acknowledge that the sample being limited to Chinese A-share listed companies might restrict the broader applicability of our findings. Based on your comment, we plan to extend our sample to include companies from the EU and the USA in future research. This will help verify and enrich our study's conclusions by exploring the relationship between smart manufacturing and enterprise breakthrough innovation, as well as the moderating role of service-oriented transformation in different regions and cultural contexts. We appreciate your guidance and recommendation for our research direction.

Author Response File: Author Response.docx

Reviewer 4 Report

Comments and Suggestions for Authors

I am grateful for the opportunity to review this work. The material is of high quality and scientifically based. It is based on relevant literary sources, of which fifty are cited - never enough, as far as I'm concerned, but this is still a decent number. The order of presentation in the material develops nicely (in a classical school way), research questions are asked, then hypotheses and everything is clear. This is followed by a presentation of the results, which is also very transparent. And then... nothing. It seems to me that we got an incomplete material, or this is some "lightened" version of the material. The paper has no discussion - what the authors call "Discussion and conclusions" is, to put it mildly, insufficient.

- I ask that the discussion be reworked and conclusions drawn according to the set hypotheses.

- I also ask that something be written about the limitations of the research in the abstract - the abstract is not written in a classical-school style, what the material refers to, it is too broad and there is no mentioned part.

- Literature could be more and it could be a greater novelty - is it necessary to have literary invitations from the eighties and nineties of the last century?

Regards.

Author Response

Comments 1: I ask that the discussion be reworked and conclusions drawn according to the set hypotheses.

Response 1: Thank you for pointing that out. We agree with your comment and have revised the conclusions drawn according to the set hypotheses. Chapter 5.1 Research Conclusion is now as follows (It's on page 18-19, lines 527-553):

    ”This study, utilizing data from Chinese A-share listed manufacturing companies from 2010 to 2022, empirically examines the impact of smart manufacturing on the width and depth of enterprise breakthrough innovation, as well as the moderating role of service-oriented transformation. The research identifies a "U-shaped" relationship between smart manufacturing and the width of enterprise breakthrough innovation, and an inverted "U-shaped" relationship between smart manufacturing and the depth of enterprise breakthrough innovation. Furthermore, service-oriented transformation plays a significant moderating role in the relationship between smart manufacturing and enterprise breakthrough innovation. Specifically:

    The U-shaped relationship between smart manufacturing and the width of enterprise breakthrough innovation of hypothesis H1a is confirmed. In the early stages of smart manufacturing application, unfamiliarity with technology and initial resource constraints lead to narrower innovation width. As enterprises adapt and deepen their application of smart manufacturing, innovation width significantly expands.

    The inverted U-shaped relationship between smart manufacturing and the depth of enterprise breakthrough innovation of hypothesis H1b is also confirmed. In the early stages of technology application, innovation depth gradually increases, but as the technology becomes more widely applied, resource dispersion leads to a decrease in innovation depth within specific domains.

    Service-oriented transformation positively moderates the U-shaped relationship between smart manufacturing and the width of enterprise breakthrough innovation of hypothesis H2a is confirmed. Service-oriented transformation mitigates the initial negative impacts of smart manufacturing, promoting an increase in innovation width.

    Service-oriented transformation positively moderates the inverted U-shaped relationship between smart manufacturing and the depth of enterprise breakthrough innovation of hypothesis H2b is also confirmed. It reduces the negative impacts of smart manufacturing on innovation depth, facilitating sustained growth in innovation depth.”

Comments 2: I also ask that something be written about the limitations of the research in the abstract - the abstract is not written in a classical-school style, what the material refers to, it is too broad and there is no mentioned part.

Response 2: Thank you very much for your suggestions. I have rewritten the abstract in a classical-school style as you recommended and included the limitations of the research. The revised abstract is as follows (It's on page 1, lines 13-24):

    “This study, using the Technology Acceptance Model and Innovation Diffusion Theory, utilizes datasets from A-share manufacturing companies listed on China's stock exchange from 2010 to 2022 to examine the impact of smart manufacturing on the dimensions of enterprise breakthrough innovation and the moderating role of service-oriented transformation. The findings reveal a "U-shaped" relationship between smart manufacturing and the width of breakthrough innovation, and an inverted "U-shaped" relationship between smart manufacturing and the depth of breakthrough innovation. Furthermore, enterprises' service-oriented transformation positively moderates these relationships. This study is limited by its focus on Chinese listed companies, which may restrict the generalizability of the results to other regions. Future research should consider a broader sample to validate and extend these findings. Nevertheless, the research findings provide a theoretical basis and practical insights for enterprise intelligent transformation and service transformation, promoting enterprise breakthrough innovation.”

Comments 3: Literature could be more and it could be a greater novelty - is it necessary to have literary invitations from the eighties and nineties of the last century?

Response 3: Thank you very much for your valuable suggestion. We have removed some of the literature from the eighties and nineties of the last century and added several recent references from the past three years to make the article more novel.

    Deleted:

“1. Carpenter, MP., Narin, F. and Woolf, P. (1981), “Citation rates to technologically important patents”, World Patent Information, Vol.3 No.4, pp. 160-163.

2.Davis, FD., Bagozzi, RP. and Warshaw, PR.(1989), “User acceptance of computer technology: a comparison of two theoretical models”, Management science, Vol.35 No.8, pp. 982-1003.

3.Griliches, Z. and Lichtenberg, FR.(1984), “R&D and productivity growth at the industry level: is there still a relationship?”, University of Chicago Press, pp. 465-502.”, etc.

    The new references include:

”1.Luisa, T.T.; Indiraa, E.S.; Bernardo, G.O. On developing a green and intelligent manufacturing system. Expert Syst. Appl. 2024, 243, 122876.

3.Wang, Z.X.; Shou, M.H.; Wang, S.; Dai, R.N.; Wang, K.Q. An Empirical Study on the Key Factors of Intelligent Upgrade of Small and Medium-sized Enterprises in China. Sustainability 2019, 11, 619.

5.Sun, L.P.; Saat, N.A.M. How Does Intelligent Manufacturing Affect the ESG Performance of Manufacturing Firms? Evidence from China. Sustainability 2023, 15, 4.

6.Ma, Z.Y.; Bai, Y.L.; Zhang, L.X. Sustainable Development of the Rural Labor Market in China from the Perspective of Occupation Structure Transformation. Sustainability 2024, 16, 1-22.   

9.Abudureheman, M.; Jiang, Q.Z.; Gong, J.; Yiming, A. Estimating and Decomposing the TFP Growth of Service-Oriented Manufacturing in China: A Translogarithmic Stochastic Frontier Approach. Sustainability 2023, 15, 6027.

10.Wang, Y.; Han, P. Digital Transformation,Service-Oriented Manufacturing,and Total Factor Productivity: Evidence from A-Share Listed Companies in China. Sustainability 2023, 15, 9974.  

11.Momeni, B.; Rapaccini, M.; Martinsuo, M. Manufacturers managing complexity during the digital servitization journey. J. Manuf. Technol. Manag. 2024, 35, 9, 51-72.

18.Tang, G.H.;  Mai, H.X. How Does Manufacturing Intelligentization Influence Innovation in China from a Nonlinear Perspective and Economic Servitization Background? Sustainability 2022, 14, 14032.

19.Abubakr, M.; Abbas, A.T.; Tomaz, I.; Soliman, M.S.; Luqman, M.; Hegab, H. Sustainable and Smart Manufacturing:An Integrated Approach. Sustainability 2020, 12, 2280.

20.Sajadieh, S.M.M.; Son,Y.H.; Noh, S.D.A. Conceptual Definition and Future Directions of Urban Smart Factory for Sustainable Manufacturing. Sustainability 2022, 14, 1221.

21.Zhou, J.; Guo, A.F.; Chen, Y.T.; Chen, J. Original Innovation through Inter-Organizational Collaboration: Empirical Evidence from University-Focused Alliance Portfolio in China. Sustainability 2022, 14, 6162.   

28.Wang, Q.L.; Jiang, Q.Q.; Yu, H.X. Analysis of the Influence of Entrepreneurial Apprehension and Entrepreneurial Strategic Orientation on Breakthrough Innovation. Sustainability 2023, 15, 1-14.  

37.Comoli, M.; Tettamanzi, P.; Murgolo, M. Accounting for 'ESG' under Disruptions: A Systematic Literature Network Analysis. Sustainability 2023, 15, 6633.  

38.Tettamanzi, P.; Venturini, G.; Murgolo, M. Sustainability and Financial Accounting: a Critical Review on the ESG Dynamics. Environ. Sci. Pollut. Res. 2022, 29, 16758-16761.

41.Tettamanzi, P.; Minutiello, V.; Murgolo, M. Accounting education and digitalization: A new perspective after the pandemic.Int. J. Manag. Educ. 2023, 21, 100847.”

Author Response File: Author Response.docx

Round 2

Reviewer 4 Report

Comments and Suggestions for Authors

Thank you for accepting my suggestions.

We may not have understood each other, but a discussion is a discussion, and conclusions are conclusions. There is still no discussion! From the results, you immediately move on to conclusions, which is neither logical nor clear - from soup and appetizers (which you mixed with the main course), you go straight to dessert, that's not how it's done. OK!?!

Author Response

Comments 1: We may not have understood each other, but a discussion is a discussion, and conclusions are conclusions. There is still no discussion! From the results, you immediately move on to conclusions, which is neither logical nor clear - from soup and appetizers (which you mixed with the main course), you go straight to dessert, that's not how it's done. OK!?!

Response 1: Thank you very much for your correction. We may have made some mistakes in our understanding before, but this time we have revised it according to your opinions and written the discussion and conclusion respectively. In the Discussion section, we explain and discuss the results of the research hypotheses, explain their significance, and compare the results of this paper with those of other studies. In the conclusion section, we summarize the entire research, answer the research questions definitively, and test the hypotheses. Chapter 5 Discussion and Conclusion is now as follows (It's on page 18-20, lines 525-628):

”5. Discussion and Conclusion

5.1. Discussion

      This study, utilizing data from Chinese A-share listed manufacturing companies from 2010 to 2022, empirically examines the impact of smart manufacturing on the width and depth of enterprise breakthrough innovation, as well as the moderating role of service-oriented transformation. The results confirm hypotheses H1a, H1b, H2a, and H2b. This research holds significant theoretical implications.

      Firstly, previous studies have noted a significant nonlinear relationship between smart manufacturing and enterprise breakthrough innovation, but they mainly focused on overall innovation rather than segmented dimensions. By dividing breakthrough innovation into innovation width and depth, this study found a "U-shaped" relationship between smart manufacturing and innovation width and an inverted "U-shaped" relationship between smart manufacturing and innovation depth. This finding broadens existing research, providing a more comprehensive understanding of the differentiated impacts of smart manufacturing on various innovation dimensions.

     Secondly, service-oriented transformation serves as a critical strategic synergy factor, significantly positively moderating the relationship between smart manufacturing and enterprise breakthrough innovation. Previous studies primarily explored the direct relationship between technology and innovation, often neglecting the synergistic effects of strategic transformations. This study finds that service-oriented transformation can alleviate the initial negative impacts of smart manufacturing on innovation width, promoting growth at lower levels, and reduce the negative impacts on innovation depth, facilitating sustained growth. This discovery further enriches the literature on strategic synergy effects, emphasizing the importance of service-oriented transformation in driving enterprise innovation.

      Lastly, the results indicate that the moderating effect of service-oriented transformation on the relationship between smart manufacturing and innovation varies across different types of enterprises. Specifically, the moderating effect is more significant in high-tech enterprises than in non-high-tech enterprises. This finding reveals the critical impact of enterprise type on strategic synergy effects, expanding the perspective of current research.

5.2. Conclusion

      The main conclusions are as follows: There is a "U-shaped" relationship between smart manufacturing and the width of enterprise breakthrough innovation. In the early stages of smart manufacturing application, unfamiliarity with technology and initial resource constraints lead to narrower innovation width. As enterprises adapt and deepen their application of smart manufacturing, innovation width significantly expands. There is an inverted "U-shaped" relationship between smart manufacturing and the depth of enterprise breakthrough innovation. In the early stages of technology application, innovation depth gradually increases, but as the technology becomes more widely applied, resource dispersion leads to a decrease in innovation depth within specific domains.

   Service-oriented transformation positively moderates the "U-shaped" relationship between smart manufacturing and the width of enterprise breakthrough innovation. It mitigates the initial negative impacts of smart manufacturing, promoting an increase in innovation width. Service-oriented transformation positively moderates the inverted "U-shaped" relationship between smart manufacturing and the depth of enterprise breakthrough innovation. It reduces the negative impacts of smart manufacturing on innovation depth, facilitating sustained growth in innovation depth.

5.3. Management Implications

     By empirically testing the relationship between smart manufacturing and both the width and depth of enterprise breakthrough innovation, as well as exploring the moderating role of service-oriented transformation, this study offers managerial insights for governments and enterprises in strategic planning and tactical decision-making under the push of smart manufacturing. Based on the findings of this study, insights are offered from both government and enterprise perspectives:

   For governments, smart manufacturing has differential impacts on the various dimensions of enterprise breakthrough innovation. When formulating and implementing policies to promote smart manufacturing, governments need to dialectically and comprehensively understand the function of this technology in facilitating the progression of enterprise breakthrough innovation. The conclusions of this study suggest that moderate policy support and guidance can encourage enterprises to better utilize smart manufacturing technology, optimizing the width and depth of breakthrough innovation. Governments should provide customized support and guidance tailored to the needs of enterprises at different stages of intelligent transformation. For enterprises in the early stages, service-oriented transformation can mitigate initial technological challenges and negative impacts. Government agencies can provide subsidies, tax incentives, and grants for adopting service-oriented strategies that enhance customer relationships and market responsiveness. For more mature enterprises, government support should focus on facilitating resource integration and market expansion through funding for research and development, infrastructure investments, and policies that promote collaboration between enterprises and research institutions. This support can ensure sustained growth in innovation depth and prevent performance decline after reaching a critical point.

  For enterprises, the integration of smart manufacturing and service-oriented transformation offers new opportunities for growth and innovation. Enterprises should fully recognize the potential of smart manufacturing technology and make strategic plans based on their technological adaptability and market demands. Specifically, enterprise managers should focus on integrating intelligent technology with existing business processes and corporate culture to promote innovation exploration across multiple domains. During the early stages of smart manufacturing implementation, service-oriented transformation can mitigate initial technological challenges by enhancing customer relationships and market responsiveness, thereby promoting an increase in innovation width. As smart manufacturing applications mature, enterprises should emphasize resource integration and market expansion capabilities to ensure sustained growth in innovation depth. Strategic investments in service-oriented technologies, such as customer relationship management (CRM) systems and market analytics tools, are essential. Additionally, training and development programs that emphasize the importance of service orientation and customer value creation can foster an adaptive and innovative culture within organizations. By focusing on these strategies, enterprises can effectively balance and optimize the width and depth of breakthrough innovation, leveraging the moderating role of service-oriented transformation to enhance the positive impacts of smart manufacturing.

5.4. Limitations and Future Research

      This study is anchored in data from manufacturing companies listed on China's A-share market, which might restrict the widespread applicability of its outcomes. Future research should contemplate an expanded sample set that encompasses non-listed entities and manufacturing firms from various global contexts to validate the robustness and broaden the generalizability of this study's conclusions. Moreover, while this study zeroes in on service-oriented transformation as a pivotal strategic synergy factor in augmenting the width and depth of enterprise breakthrough innovation within the realm of smart manufacturing, forthcoming inquiries are encouraged to explore additional strategic synergy factors that could significantly impact this complex interplay.”

      If we still have a mistake in understanding, please point it out for us again. Thank you very much for your patience and seriousness.

Author Response File: Author Response.docx