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inherent capabilities were never fulfilled. This tended to putmechanization into disrepute."The situation has been complicated in recent years by the cost ofcapital rising faster than that of labour. Also, a lack of success indeveloping tree harvesting machines has led Canadian equipmentmanufacturers to slacken their effort. Certainly, Canada's failure tobuild upon the new machinery of the 1960s, notably the skidder andearly types of tree harvesters, has allowed the Scandinavians to takethe technological lead. Silversides has argued that regional preferencesand lack of knowledge about alternatives have militated against aconcerted effort in Canada to develop appropriate silviculturalequipment."Case Study of Equipment SelectionInformation for this case study was obtained in an interview with ageneral manager of woodlands and sawmills of a firm based in easternCanada. He summarized the characteristics of equipment chosen tomechanize the firm's cutting operations. The firm is extremely conservativein adopting new equipment. It rents machines from suppliersand only occasionally buys them outright. It rents feller-bunchers, forexample, which cut about 25 per cent of its wood. In addition, the firmno longer buys prototypes. It considers it was spending enough onR& D without using its woodlands as a guinea pig. Nevertheless itpermits experimentation on its woodlands by "competitive renting"of models from different manufacturers and by allowing suppliers totryout their equipment.The firm's decision to buy a machine is based on costs. In thisrespect there is occasional conflict with head office. Woodlandmanagers, for example, want to keep on buying feller-bunchers andjustify the decision in terms of expected labour shortages andimproved safety. However, especially where trees are relatively small,the power saw remains the most economical method of cutting trees.Whereas head office is clearly in tight control over financial matters,local input is very important in determining the type of machine andchoice of supplier. Local woodland managers are in constant contactwith suppliers and dealers and are knowledgeable about local operatingconditions. For these managers quality and servicing are important.There is no doubt that the head office's emphasis on costs tendsto reduce their options with respect to choice of machines. Althoughhead office has no obvious preference among makers, some localmanagers do.Discussions between buyer and suppliers about sales of newmachines contribute to technological innovation. For example, the96
case study firm recently purchased 66 wide tires to put on skidders. Itexperimented with tires from four firms, which led to drastic modifications.ConclusionDuring the past decade the Canadian forest-product industries haveincreased capacity and introduced new technology. In sawmills andpulp and paper mills there have been significant changes in millenvironments and operating procedures. During this same periodconcern for the technological capability and innovativeness of forestproductfirms and their suppliers has increased. It is widely supposedin the industry that Scandinavian, German, American, and Japanesefirms are on the leading-edge in terms of creating and adopting newtechnologies. Despite the massive investments of the past decade therate of diffusion of technology in the Canadian industry is now widelyconsidered to be inadequate. In particular, any prior claim thewestern Canadian industry had to be at the state-of-the-art technologicallyhas now disappeared. Indeed, the view that the Canadianindustry is technologically lagging behind its main competitors is widespreadamong senior industry personnel with worldwide contacts.The apparent paradox between massive investment in "modernization"and a widening technological gap with major rivals can beexplained in several ways. First, investment decisions in Canadaalmost invariably emphasize "proven equipment." Adoption of innovativemachinery is rare. Before choosing equipment Canadianbuyers want to see it in operation. Second, although changes in technologyhave occurred in reaction to market demands, the industryhas not foreseen these demands. Canadian industry has continued torely on natural advantages, as it always could in the past. Third,decisions about investments in the Canadian forest-product industrieshave been dominated by short-run financial considerations. Thistendency has resulted in step-by-step upgrading or replacement ofindividual machines at periodic intervals rather than in the rebuildingof entire mills. Moreover, equipment and buildings are only replacedwhen operating revenues fail to cover operating costs." This piecemealapproach to modernization neglects the dynamics that existbetween technological and market changes.In the Canadian forest-product industries, each firm makes itsown plans. Resulting competitive investment strategies put pressureon financial resources and market opportunities and can lead to overcapacityfor individual firms. Federal government policies have supportedthis state of affairs. The Canadian pulp and paper industry,97
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Science Council of Canada100 Metcal
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ContentsForewordAcknowledgments1113
Page 7 and 8:
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
Page 28 and 29:
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
Page 38 and 39:
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
Page 44 and 45: of which only 18 per cent came from
Page 46 and 47: New information can be generated by
Page 48 and 49: Chapter 3The R&D System andHow It W
Page 50 and 51: 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 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 102 and 103: the concept of flexibility explicit
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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