Service Adoption in The Agricultural Sector - A case study about the role of product-service offerings for Swedish cattle farmers

Abstract

Even in traditional sectors such as the agricultural sector, digitalization has significantly impacted operations. Because of the sector’s fundamental role in society, understanding this digital evolvement to support further development is of essence on a grand societal level. Although an increase in the use of product-service offerings is prevalent in the sector, the uncertainties regarding farmers’ willingness to adopt service-focused offerings constitutes a gray area in practice and theory. Furthermore, the servitization literature lacks research pertaining to the users’ perspectives and the factors influencing servitization, which opens for further contributions to this research domain. Therefore, this study aims to investigate servitization of IoT products and what impact these services will have on farmers as well as service providers within the agricultural sector. The study applies a case study design, including semi structured interviews with Swedish farmers as well as secondary data from the case company and from other service providers within the sector. It was found that multiple groups of factors influence user adoption of servitized IoT offerings within the sector: First, factors concerning the impact on working conditions, animal welfare and financial position. Second, farmer’s general attitude and mindset towards technological development, provider survivability and trust in technology, mediates adoption. Third, there are factors relating to the intrinsic characteristics of a product-service offering. Fourth, extrinsic factors such as actions from the service provider have the possibility to influence the user adoption of a service. Lastly, various contextual factors, such as access to service connection and government policies and regulations moderates adoption. In relation to these factors, the paper provides a conceptual framework regarding their interdependencies. Additionally, using a business model innovation perspective, suggestions for how a servitizing firm can consider these factors and their interdependencies are presented.