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

owned firms in the sample, R&D in Canada is almost non-existent: 11of the 14 firms rely "very strongly" on parent company R&D, and twoothers "moderately strongly." The four that do maintain independentR&D programs are, in each case, the parent company's only manufacturingbase for forest-product equipment. These companies doR&D that is "strongly different" from that of their parent company. Ingeneral, however, international equipment manufacturing companiescentralize their R&D in their home countries. Valmet's decision tophase out the R&D group of Dominion Engineering Works of Montreal,following the acquisition of the latter in 1984, is typical.Remaining Canadian firms are small or medium-sized and confinedto increasingly narrow market segments, and these circumstancesdo not favour sustained R&D programs. Therefore withinCanada domestic and foreign-owned firms show little difference interms of level of R&D.IS As a Finnish observer has recently noted,despite high levels of demand in Canada, there is not one importantCanadian-owned multinational company in the forest-product equipmentbusiness." Nor, to the author's knowledge, has any Canadiancompany established a branch outside North America. In contrast,firms such as Beloit, Voith, and Valmet have built manufacturing facilitiesin several countries, including low-wage developing countries. InCanada, foreign subsidiaries typically do not have the mandate andlocally owned firms do not have the size to pursue similar strategies.There is a danger that Canada's equipment manufacturing base willbe gradually lost to developing countries as R& D becomes concentratedin other industrialized countries.Given that so many equipment suppliers are foreign subsidiariesit is not surprising that the 37 surveyed firms do not issue manypatents or licences. Thus 30 reported not licensing their technologyto others. Significantly, 18 firms did manufacture the products offoreign firms under licence. This represents a net inflow of licencesinto Canada and confirms our technological dependency. Thecompanies that issued the licences were based in Scandinavia, Japan,America, Italy, and, in a few recent cases of cross-licensing, Finland.Some examples of licensing arrangements are• leading R&D-oriented firms in wood processing, electronics, andlogging have recently licensed Swedish products.• A Finnish firm, Raute took over Durand of New Westminster andobtained a licence to manufacture the latter's rotary clipper andDurand now manufactures several of Raute's products.• C.A.E. of Vancouver has also entered into a joint venture withAhlstrom of Finland; for C.A.E. the deal meant a licence to manufactureAhlstrom's edger optimizer.73