The Digital Pivot: A Systematic Review of Digital Technology's Impact on Manufacturing and Future Research Agenda

Abstract

The manufacturing sector is undergoing a profound transformation driven by the pervasive integration of digital technologies (DTs), often termed "Industrial Digitalization." While previous literature has extensively focused on Industry 4.0, a comprehensive and nuanced understanding of Industrial Digitalization—encompassing its diverse technological enablers, organizational prerequisites, multi-faceted impacts, and inherent barriers—remains fragmented. This systematic literature review synthesizes 150 high-impact studies from 2018 to 2025 to develop a holistic conceptual framework that distinguishes Industrial Digitalization from its predecessors. We classify DTs into five core categories (AI/ML, IIoT, Digital Twin, Cloud/Edge Computing, and Big Data Analytics) and systematically analyze their impact mechanisms. Our key finding is the confirmation of DTs as a critical driver for enhancing Total Factor Productivity (TFP) in manufacturing, primarily through the mediation of data-driven decision-making, resource allocation optimization, and knowledge spillover. Furthermore, we identify critical barriers (e.g., organizational inertia, skill gaps, ethical concerns) and, most importantly, propose a five-point future research agenda, focusing on the need for a more nuanced conceptualization, the potential for DTs to evolve into General-Purpose Technologies, and the imperative to integrate ethical and sustainability principles into digitalization strategies. This review provides a robust theoretical foundation for researchers and actionable insights for practitioners and policymakers navigating the complex landscape of the digital manufacturing era.