IFS Report Finds Manufacturing Shifting Toward Service-Led Growth

IFS has released its State of Service 2025: Manufacturing Transformation Report, produced with Accenture, highlighting a global shift in manufacturing toward service-driven growth, announced in a press release. The study, based on insights from 800 senior manufacturing leaders, shows that 39% of manufacturers now view servitization as central to their long-term strategy.

The report finds that Industrial AI, servitization, and sustainability are reshaping how manufacturers operate and deliver value. While 96% of respondents use AI in service delivery, only 28% have fully scaled it across operations, with barriers such as data governance and legacy system integration cited as key challenges.

According to the findings, 98% of manufacturers report labor shortages, prompting investment in workforce reskilling through internal academies, e-learning platforms, and partnerships with academic institutions. Sustainability has also become a strategic priority for 97% of respondents, with 79% tracking emissions from service activities and 37% doing so in real time.

The report concludes that manufacturers able to scale AI, embed new service models, and address workforce and sustainability challenges are positioned to define the next phase of industrial competitiveness.