An Exploration of Digital Servitization Business Models in Manufacturing SMEs

Digital servitization, the integration of digital technologies into service-based business models, has gained significant traction in the industrial manufacturing sector. However, there is limited understanding of the conditions under which small and medium-sized enterprises (SMEs) develop specific digital servitization business models, owing partly to the lack of an appropriate business model typology. In this study, we develop a generalizable and operationalizable classification of digital servitization business models and identify the environmental and organizational factors that drive such business model innovation. We apply a multinomial logistic regression framework to analyze a dataset of 326 responses from UK manufacturing SMEs, providing insight into how the seven studied factors differentiate among SMEs following different digital servitization business models and more traditional ones (pure product or “just” servitized). The study contributes to the scarce empirical research on digital servitization in SMEs and provides implications for policy and practice.