A study explored questions on changing skill requirements of small firms in the services sector that are internationalizing their activities. These seven European Union (EU) member states were involved: Greece, Spain, Italy, Ireland, Austria, the Netherlands, and the United Kingdom. The services sector accounted for a significant part of the EU economy. Its share of gross domestic product is estimated at more than 70 percent and services account for more than two-thirds of total employment in most member states. Investigations of factors inducing small firms to start operating abroad suggested the decision was triggered by the consideration that the firms seek growth but cannot achieve it in their home markets and expansion opportunities are identified in other markets. The most important "keys to success" of internationalized small firms were finding the right agents/distributors; choosing the right export market(s); being committed, confident, and persistent; using fast communications; and having foreign language abilities. Firms needed to develop such competency as foreign language, negotiation, and communication skills. Small firm owners preferred practical results-oriented mechanisms--on-the-job training and exchange of experience--as alternative mechanisms through which internationalization-related competency could be developed. Results of individual countries were synthesized. Recommendations regarding crucial shortages of specific types of skills were addressed to public and private providers of support to small firms, national governments, and the European Commission. (YLB)