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The European Commission and EASME (the agency that carries out SME-focused programs on behalf of the European Commission) has recently published the above-mentioned servitization study by a consortium of Technopolis, Cambridge Service Alliance, and Dialogic. The goal of the study was to assess to what extent the European SME manufacturing industry is able to transition to more service-based business models. Can small and medium-sized companies succeed in providing various services in addition to physical products, and actually adapt their business model to this?
The study also provided tools to monitor the development of servitization in the near future. Various methods were used for the study, including literature review, text mining of the Capital IQ database, web scraping of company websites (both methods were used to estimate the level of servitization of the respective companies), Input-Output analysis, a survey of 1000 SMEs in 10 EU countries, and 10 case studies in the same 10 EU countries.
The study shows that from 2000-2014 (for all 28 EU countries), servitization in SMEs has increased, but significant differences exist between countries and industries. The study also illustrates how the five distinct archetypes of servitization have evolved, as well as the development towards three cross-cutting services namely digital services, financial and related services, and circular economy-related services.
The main barriers to servitization for SME manufacturing include the lack of skills among the existing workforce and the challenges SMEs face in attracting employees with the right skills, regulations (product and market), and (lack of) standards.
Policy recommendations include:
- Encouraging employees/workforce to have the necessary skills to make the transition to new product-service combinations;
- Promoting crossovers between companies;
- Ensuring that sufficient funding is available for innovation in product-service combinations;
- Promoting an integrated European market in this area;
- Initiatives to raise awareness of the potential of product-service combinations among SMEs in the European manufacturing industry.
In addition to the main report, the results of individual research methods are also extensively explained.
