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

Some observers argue that Canadian firms should import technologyin the form of equipment, licensing arrangements, andservices because this would be cheaper for them than doing their ownR& 0, and that, where necessary, imported R&0 should be adaptedfor the Canadian situation. However, this argument, which has beenmooted frequently for Canadian R&D in general," ignores the dynamicsthat exist between innovation and technological leadership.Reliance upon imported technology and adapted R&D reinforces technologicaldependence at a time when technological leadership iscritical to profitability and global competitiveness. Our American andScandinavian competitors are wielding technology strategies that promoteR&D and emphasize fully processed wood products and newprocess technology. For Canadian firms as well, healthy and vigorousindigenous R&D will be crucial to productivity and competitiveness.Because they have continued, in this period of rapid technologicalchange, to emphasize "proven" technology to manufacture a narrowrange of standardized commodities, Canadian forest-product firmshave declined in productivity and market-share relative to their majorcompetitors. In the wood-processing industries, for example, Schulerargues that the Scandinavian countries, on the basis of more innovation,have achieved greater productivity increases than Canada hasover the past 15 years," Certainly, sawmills in Scandinavia and theUnited States now convert a higher proportion of log volume intolumber products," Worldwide, Canada's share of forest-product exportmarkets has declined from more than 30 per cent in 1960 to about 19per cent in 1980, whereas countries such as Finland, Sweden, and theUnited States have increased their share.wCanadian forest-product firms have not yet met the challenge ofpenetrating newly emerging, fast growing markets for higher valueaddedproducts. In wood-processing, for example, "miscellaneous"wood products are negligible components of wood-product exports.Similarly, in pulp and paper, bulk commodities still predominate,although there has been a modest shift to higher value papers. In 1981,for example, newsprint still accounted for 49.2 per cent of paper andallied exports and "other papers" only accounted for 7.2 per cent; pulpand paperboard made up the balance. In Finland, by contrast, newsprintdeclined from 54 to 29 per cent of pulp and paper exportsbetween 1959 and 1984 and the remaining exports were mostly finepapers,"A greater commitment to technological leadership and innovationis essential to maximize the quantity and value of products derivedfrom the forest.29