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

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the concept of flexibility explicit in their investment plans, and toconsider a wider range of technological choices.A firm's "flexibility" is judged by how easily it adapts its geographicscope and strategy, internal structure, product design, productiontechniques, and design of industrial systems to changes, oranticipated changes, in market demands. Flexibility may be a characteristicof a specific mill or of the firm as a whole. Investment inin-house R&D is an attempt to promote the flexibility of the wholefirm. As corporate environments become more dynamic, firms need todevelop broadly based flexibility with more diverse products andproportionately more liquidity."How firms enhance their flexibility to meet changing marketneeds depends upon particular circumstances. During the 1950s and1960s several west coast firms improved flexibility by concentratinglumber, plywood, and pulp and paper operations on one site therebyproviding for easy diversion of raw materials from one end use toanother, as well as allowing for considerable cost savings, for example,in the use of energy. Those integrated facilities located on tide-wateralso enjoyed access to diverse markets and sources of timber.'? Othermore specialized factories may be able to sell to new geographicalmarkets and/or differentiate their product by introducing more versatiletechnology. Sawmills, for example, can potentially manufacturelumber, pulp chips, particleboard furnish, energy, specialty products(for example, sawdust for cattle feed) and thus generate multiple cashflows. If they are integrated with pulp and paper making processes aspart of forest-product complexes, they can bring together a variety ofengineering and technical skills and provide a focus for a variety ofinnovations.P Another way firms can achieve flexibility is byinvesting in specialty mills.'!For the firm, "horizontal and vertical" diversification into newproducts for existing markets and new products made with old equipmentextends the range of forest-products that can be manufacturedfrom a given resource base and increases flexibility by permittingcounter-cyclical revenue generation. If the opportunity costs of"related," if non-conventional, forest-products, such as chemicals andenergy, increase rapidly, firms will be tempted to invest in theseactivities. In this regard, the extent to which the firm can diversify itsuse of the forest resource is partly determined by its technologicalcapability. Similarly, such a strategy would exercise a firm's technologicalresources and in turn would enhance the range of potentiallyrelevant innovations available to the firm.How firms become flexible also depends on their size." Smallfirms can develop fast response to markets, high internal efficiency,and service to specialized market niches. In contrast, Canadian-based104
multinationals can achieve market connections and understanding;wide investment, financing, and trading options; extensive networksto gather technical information; and higher rates of innovation.Canadian-based forest-product multinationals have the additionalflexibility offered by direct operating presence and experience in internationalmarkets. Because they operate in such a wide range ofrapidly evolving and complex environments these firms are underparticular pressure to develop formal technology strategies.An important corollary to increasing flexibility is for Canadianforest-product firms to move up-market. Wood processors and pulpand paper makers could give greater emphasis to higher qualitygrades of product, add manufacturing steps, and develop new products.Indeed, key technological leaders and R&D advocates within theindustry have recently argued for a much greater commitment toenhancing the value of forest products manufactured in Canada."Opportunities for product development clearly exist, for example,lignin-based chemicals, new kinds of pulps (including fluffy pulps),specialty papers, and a variety of wood products for both decorativeand structural purposes. In fact, the demands for new structural usesof wood are potentially massive, especially for non-residential constructionand for preserved wood foundations in residential construction.Certainly there are barriers to moving up-market. They includetariffs, transportation rates, and the high cost of product development.As some leading companies realize, however, growth and profitabilityincreasingly depend upon penetration of higher value marketsegments.If the Canadian forest-product industry is to embrace valueaddedproduction and more flexible production, the prevailing practiceof processing as many logs as possible must give way to thepractice of value maximization." Second, firms will have to markettheir products more aggressively, emphasizing direct identificationand anticipation of consumer demands. Third, firms will have tospend more on technology and its development, absorption, and use.Technology Strategies....we have entered an intensively competitive period, in whichtechnology and marketing have joined productivity as keystrategies."There is a close interrelationship between marketing, production, andtechnology policies. An emphasis on production flexibility and valuemaximization principles in turn requires more explicit and innovativetechnology policies.105
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Science Council of Canada100 Metcal
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ContentsForewordAcknowledgments1113
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In-House R&D by Equipment Suppliers
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Table 2.5: R&D Employment in 10 Can
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ForewordTechnological innovation an
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adapted sufficiently rapidly to the
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Finally, the author interviewed sen
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Table 1.3: Degree of Foreign Contro
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Figure 1.1: Innovation Patterns and
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Since 1945 the pace of technologica
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Toward Reliance on Research rather
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science occurred between 1900 and 1
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Forestry Sector R&D SystemIn Canada
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up its forestry research group at N
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and one other that was strongly ori
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closely involved in the establishme
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to vet and control research priorit
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In-House R&D by Equipment Suppliers
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product. One, by no means atypical,
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only internal source of dissolving
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of which only 18 per cent came from
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New information can be generated by
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Chapter 3The R&D System andHow It W
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Table 3.2: Summary Characteristics
Page 52 and 53: Sixteen firms provided details on s
Page 54 and 55: The Opco Process: A Case Study of I
Page 56 and 57: however, within the last two decade
Page 58 and 59: in 1959, and a full-scale experimen
Page 60 and 61: Papritection was developed as follo
Page 62 and 63: Further tests were conducted in 198
Page 64 and 65: fully automatic machines, and its s
Page 66 and 67: Chapter 4Technological Capability a
Page 68 and 69: Table 4.2 provides measurements of
Page 70 and 71: forest-product equipment patents, w
Page 72 and 73: Foreign-Ownership and In-House R&DT
Page 74 and 75: Technological Liaisons: Forest-Prod
Page 76 and 77: for this deficiency the federal gov
Page 78 and 79: On the other hand, three of the lea
Page 80 and 81: one of Sweden's forest-products gia
Page 82 and 83: Capital Investments in the Canadian
Page 84 and 85: and Quebec accounted for 33.9 per c
Page 86 and 87: Table 5.5: Canadian Forest-Product
Page 88 and 89: Scandinavian manufacturers are in t
Page 90 and 91: was implemented smoothly and manage
Page 92 and 93: the foundations were poured, until
Page 94 and 95: inherent capabilities were never fu
Page 96 and 97: especially in the east, has receive
Page 98 and 99: "export staples mentality." The bel
Page 100 and 101: size of the conglomerates would cer
Page 104 and 105: This author therefore recommends th
Page 106 and 107: with respect to technology transfer
Page 108 and 109: of the R&D system and influence the
Page 110 and 111: operations, attitudes toward innova
Page 112 and 113: limited R&D base, but they do empha
Page 114 and 115: The small size and non-innovative n
Page 116 and 117: Promoting In-House R&D in the Fores
Page 118 and 119: Notes1. The Technological Challenge
Page 120 and 121: 7. For example, nj. Daly, "Weak Lin
Page 122 and 123: 7. P.G. Mellgren and E. Heidersdorf
Page 124 and 125: this R&D facility has become even s
Page 126 and 127: 3. K. Noble, "Forest Industry Urged
Page 128 and 129: Publications of the ScienceCouncil
Page 130 and 131: Reports on Matters Referred by the
Page 132 and 133: No. 40. Government Regulation of th
Page 134 and 135: 1981An Engineer's View of Science E
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