Competence-related challenges for micro-enterprises entering the field of servitization

Abstract The purpose of this study was to examine the competencies that micro-enterprises (micros) need in order to enter the field of servitization. Servitization is a great business opportunity for micros, but it is important to know what competencies a firm needs when targeting the longer and more profitable customer relationships that servitization may offer. Micros possess limited human resources and thus competencies, and it is crucial for them to understand competence-related challenges in order to operate successfully. This empirical study was conducted by employing a qualitative research approach in order to enrich the collected data and the findings. The multiple case strategy used here allowed for an extensive examination of the phenomenon of interest. Data were collected by means of interviews in eight Finnish subcontracting micros in the fields of forestry and mining in order to produce new information about the competence-related challenges faced by micros entering the field of servitization. The results show that micros face competence-related challenges in servitization in terms of entrepreneurship, functioning under change and financing. Entrepreneurial competencies are strongly linked to recognising opportunities and envisioning future business opportunities. There is also a need for change competencies, both for micros and customers, including the ability and willingness to change by renewing employees’ skills and methods of working. Financial difficulties and a lack of understanding regarding future economic responsibilities were highlighted as challenges. This competence-based approach to studying micros in the context of limited human resources allowed us to identify the competence-related challenges that micros face in the industrial mega-trend of servitization. In addition, this study addressed academic and practical application gaps in the study of micros