Internal Market, Industry, Entrepreneurship and SMEs

Study on the potential of servitisation and other forms of product-service provision for EU small and medium-sized enterprises

Study on the potential of servitisation and other forms of product-service provision for EU small and medium-sized enterprises
Published on: 12/07/2018

This study refers to the provision of product-service combinations (specific types of combinations and solutions) and the process of servitisation (the process of adding 1 or more services to a product) among manufacturing small and medium-sized enterprises (SMEs) in the EU.

The objective of this study was to provide an evidence base to the European Commission to allow it to support SMEs to seize the opportunities offered by servitisation and move towards other forms of product-service provision, notably, by adopting digital service-based business models. The study aimed to estimate the EU servitisation market in terms of employment, turnover and value added, and analyse drivers, barriers and success factors behind servitisation. It also provided tools for the Commission to monitor developments in this field in the future.

A combination of methods were used to arrive at the results such as a literature review, text mining of a database with company information, extracting data from company websites, input-output analysis, an SME survey and case studies. The study concludes with policy recommendations on skills, external collaboration (including clusters), access to finance, the Single Market and awareness.

Main findings of the study:

  • The interaction between services and manufacturing industries increased between 2000 and 2014 for all EU countries. However, the extent to which small and medium-sized firms are servitised is diverse across these countries.
  • The service component amounts to 12% of EU manufacturing turnover in SMEs.
  • 10% of full time employees of all manufacturing SMEs are responsible for developing service offers.
  • Servitisation brings a 1-10% increase in annual turnover to the servitised SME.
  • The main barriers to servitisation are:
    • The skill set of current staff and difficulties in hiring staff with the right skills
    • Organisational structure and culture not fit for providing services
    • Finding the right suppliers and partners
    • Access to financial resources
    • Barriers related to regulation (data, privacy, and the Single Market)

More information:

Study on the potential of servitisation and other forms of product-service provision for EU SMEs – main report

Study on the potential of servitisation and other forms of product-service provision for EU SMEs – appendices

The study was financed by the COSME programme.