Authors: M.A. Cherevko, P.P. Lukyanenok

Title of the article: Multi-Level Reduction of the Innovation Portfolio as a Method for Forming the Cumulative Effect of Industry 4.0 Technologies in the Oil and Gas Sector

Year: 2026, Issue: 2, Pages: 86-91

Branch of knowledge: 5.2.3 Regional and sectoral economics

Index UDK: 338.012

DOI: 10.26730/2587-5574-2026-2-86-91

Abstract: This paper addresses the problem of assessing and managing the economic effects of Industry 4.0 technologies in the oil and gas sector. It is shown that the prevailing fragmented project-based approach to digital transformation does not allow companies to identify and manage the cumulative economic effect at the level of the production system as a whole. To overcome this limitation, a multi-level reduction method of the innovation portfolio is proposed. The method is based on the sequential aggregation of local innovation initiatives into a limited number of system-level solutions, enabling the identification and management of concentrated economic effects. The empirical basis of the study comprises corporate data on 1,229 innovation initiatives implemented across subsidiaries of an oil and gas company. As a result of applying the proposed method, a long list of 45 aggregated initiatives and a short list of 7 system-level initiatives were identified, accounting for the largest share of the total economic effect. The findings demonstrate that Industry 4.0 technologies should not be considered as an independent source of economic value, but rather as a mechanism for integrating and scaling innovations within core production processes. In addition, a maturity framework is proposed, reflecting companies’ ability to perform multi-level reduction of innovation portfolios and to manage cumulative economic effects. The proposed approach can be applied to innovation portfolio structuring and to the development of digital transformation strategies in oil and gas companies.

Key words: Industry 40 innovation portfolio digital transformation cumulative economic effect multi-level reduction oil and gas industry innovation portfolio management system-level initiatives

Receiving date: 13.05.2026

Approval date: 20.05.2026

Publication date: 11.06.2026

CITE DOWNLOAD