Product Design

Digital Transformation means the manufacturer must develop smart new products, specifically new products that feature digital technologies built in; that is, software in combination with hardware that provides new functionality for the customer. Historically, the hardware part of combined hardware/software product had been the differentiator in the market; now the situation is reversed: The software component increasingly becomes the factor that leads to differentiation and competitive advantage.

What percentage of manufacturers’ R&D expenditures is now going to software development (as opposed to mechanical, electrical, and materials engineering and design) is unknown.