As incumbents strive to collaborate with start-ups in the pursuit of cutting-edge digital solutions, the complexities posed by disparate partners and their innovative endeavours often lead to intricate tensions. Our research underscores the critical role of innovation intermediaries in enabling a successful digital co-creation, yet a deeper understanding of this novel and evolving context is required. Through a comprehensive study of two innovation intermediaries, five incumbent companies, and eleven start-ups, we shed light on how intermediaries can effectively mitigate the hard-to-manage tensions that emerge. Our analysis uncovers three primary tensions: incompatible digital co-creation cultures, divergent digital innovation operations, and misaligned technical capabilities. We further propose a four-phase process for innovation intermediation, including the establishment of digital co-creation foundations, catalysing digital innovation projects, orchestrating the co-creation process, and scaling the resulting outcomes.

Purpose: Digital servitization provides new opportunities for manufacturers to compete acrossmultiple markets. However, global digital service provision is complex and knowledge intensive, as itrequires alignment with subsidiaries to ensure adaptation to local customers’ needs. The purpose ofthis study is to understand how manufacturers engaging in digital servitization can leverage reverseknowledge transfer (RKT) from subsidiaries to achieve global competitive advantages.

Design/Methodology/Approach: A qualitative multiple-case study including 43 interviews is used toinvestigate the RKT in three manufacturer-subsidiary cases taking place during the provision of digitalservitization solution packages in progressive global markets.

Findings: This study identifies three crucial types of subsidiary generated knowledge namely, digitalknowledge, customer knowledge, and needs analysis knowledge. Leveraging such knowledge,manufacturers are able to mitigate the operational challenges of global digital service provision, andrealise the benefits in the forms of financial performance, efficient rollout of the digital servitizationsolution, and the expansion of the digital service portfolio.

Originality/Value: Even though there has been increasing interest of scholars towards global digitalservice provision, there is limited knowledge about how manufacturers manage knowledge flowsbeyond the boundaries of a single market. This study extends current knowledge by focusing onmanufacturers’ digital service provision in multiple global markets. In addition, by focusing onsubsidiaries’ perspective, this study brings forward their critical role and impact on the achievementof global competitive advantages. This study introduces the concept of RKT in digital servitizationliterature exploring the role and impact of the subsidiary, actor that has received scant attention inthe servitization literature.