Technology and the Canadian Forest-Product Industries ... - ArtSites

size of the conglomerates would certainly prove a great advantageshould they decide to promote innovation. It makes it easier for themto justify investment in risky activities, to plan over the long term, tofend off corporate predators, and to increase Canadian control byacquisition of foreign subsidiaries.Because conglomerates control activities in different industriesthey can potentially establish production and technological linkagesbetween equipment suppliers, forest-product firms, and constructioncompanies, and they can engineer marketing connections. Also theyoften have overseas subsidiaries that enable greater flexibility inindustrial planning and marketing of innovations.Conrad Black has recently justified the presence of huge Canadianownedand -controlled conglomerates as the only effective way ofoffsetting the power of large foreign-controlled multinationals in theCanadian economyf He urges that the role of conglomerates in preservinga degree of sovereignty in the Canadian economy should beformally recognized - not attacked by more rigorous federal competitionlaws. Black is essentially offering a kind of social bargain betweenthe most powerful corporate interests in Canada and the government.This offer should be seriously considered if conglomerates would inreturn promise to enhance Canadian industrial strengths, especiallyby committing themselves to increased R&D.The acceptance by Canadian conglomerates of an obligation to abroad social interest may be Canada's last chance to build industrialstrength through innovation in the resource sector. Although R&Dbasedsmall and medium-sized firms in high-value-added segmentsof the forest-product industries can also playa part, given the structureof the industries, whether attitudes toward innovation within thesector change significantly depends on leaders in the conglomeratesand other big firms.Getting R&D out of the Lab and into ProductionThe challenges of mature industries are becoming more and morelike those of high technology: automation of production, incorporationof advanced technology into the final products, thenecessity to compete in global markets, and the need for a moreeducated and professional labour force?To develop their full potential the Canadian forest-product industrieswill have to become more innovative. Policy makers mustremember that innovation includes not only the science and engineeringactivities of the R&D system but also the entrepreneurial (market­102