Jari Kuusisto 1

Fortune Capturing User Value

in Every Part of Forest life-cycle

Tekesin strategiset tutkimusavaukset 2012

Jari Kuusisto • University of Vaasa Sami Berghäll • University of Helsinki

Marja Toivonen • VTT Anne Toppinen • University of Helsinki

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Introduction •  Finnish economy relies on three main sectors

•  Electronics and software •  Metals and metal products •  Forest industry

•  Forest industry is increasingly investing overseas •  Traditional Forest related jobs and value added is shrinking in Finland •  There is a need to renew this industry

• Renewal efforts have not made break through so far •  New strategic R&D organisation is in place See:

•  http://www.forestcluster.fi/ •  -> finds difficult to work ‘out of the box’

• See also other links: •  http://www.forestindustries.fi/Pages/default.aspx •  http://www.forest.fi/smyforest/foresteng.nsf

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Fortune project • Pre-project looking into the renewal of forest sector from

•  User perspective •  Intangible value creation point of view •  Opposite to dominant logic: mass production of paper, pulp, timber

• Pre-project seeks to prepare a proposal for main project •  Aiming at 5-10 mill. Euros strategic project looking at interesting new

opening discovered during the pre-project

• Pre-project partners •  Helsinki University – Forestry & marketing – forest owners perspective •  VTT – ethnographic methods •  University of Vaasa – user perspective & intangible value creation

• Main project consortia to be decided •  International network is important •  Also business consortia / linkages are important

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FORTUNE abstract •  User value perspective to Forest during its life-cycle

•  Creating and capturing intangible value •  Identification of existing and potential new types of values •  Value can be captured from tangible / intangible forest products •  Value can be economic, aesthetic, sustainability related, psychological,

societal etc..... •  Users can be businesses, communities and individuals

•  Value capture during the entire life-cycle of forest •  Forestry as sustainable environment

•  Carbon capture, erosion barrier, element of living environment, ecological pockets for wild nature etc.

•  Forestry as a source of biomass and jobs •  Pulp, paper, viscose, building material, renewable energy •  Forestry and forest related jobs

•  Forest as a friend, source of inspiration and design artefacts etc. •  Forest relates Spiritual values and life-style issues

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Fortune is •  New perspective and ambitious openings to Forest related research

•  Forests represent sustainable national asset for Finland •  At present Forest related research and economic activities are suffering from the

industrial era legacies •  Focus on mass produced products: timber, pulp, paper… •  Dominance of raw material extraction and economic exploitations •  Research tends to support established industries and forestry actors •  Producer perspective dominates R&D&I activities

•  The novelty aspects Fortune project include •  Dominance of user perspectives contrasts the conventional wisdom •  Multi-disciplinary research consortia

•  Draws resources and knowledge from key national research performers •  University of Helsinki, University of Vaasa, Lappeenranta University of Technology •  VTT

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Fortune project - expected impacts •  New knowledge and perspectives making an impact •  The maintenance of supremacy in Forest related science and innovation

capability •  Fortune project supports this long-standing feature of the Finnish policy stance •  To achieve this radical change and new perspectives are needed

•  Fortune project impacts are expected •  Through renewal ideas for existing industries and services •  By stimulating new business models and enterprise creation •  By introducing societal aspects of innovation as a source of vitality and empowerment in

Finland •  Connects research and its agenda closely with businesses, policy-makers, citizens and

communities •  By addressing challenges that originate from geostrategic changes affecting traditional mass

production focused forest industry •  Hollowing out of the forest industry in Finland •  Potentially catastrophic degradation in ecological systems and natural resource

availability

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Evolving value chain perspective

The emerging importance of users and intangibles

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In the past...

•  Focus on mass production • Value chain of pulp, paper and wood products industries

• Draws knowledge from several related fields •  Increasing role of expert services • Customer and user are introduced in the picture

•  More obvious since 2006

•  Forests are still seen as a source of biomass •  Extraction of raw material

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Forest cluster development t0

•  External KISA play a key role in the development of the industry

Source: ETLA, 2004

FOREST INDUSTRY• Pulp and paper technology• Wood products industry• Machines, machinery and processes

INFORMATION TECHNOLOGY

• Sensors, measuring and control• Computational intelligence,

simulation and machine vision• Multimedia and

telecommunication• Tomography

FORESTRY

ENERGY AND ENVIRONMENTAL TECHNOLOGY

• Biofuels, combustion technology• Ecobalances • Closed systems• Energy saving and emissions

CHEMICAL TECHNOLOGY• Paper bleaching chemicals• Surface treatment substances• Pigments• Adhesives

BIOTECHNOLOGY• Enzymes• Rot prevention• Gene technology

MARKETS• Quality competitiveness• Price competitiveness• Environmental expertise

CONSTRUCTION AND WOOD TECHNOLOGY

• Modification of wood• Construction technology and

architechture• Logistics, assembly

MANUFACTURING TECHNOLOGY

• Forest machines• Process and production

machinery• Material technology

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Forest cluster t1 (2006) •  Need for new types of knowledge/KISA

FOREST INDUSTRY• Pulp and paper technology• Wood products industry• Machines, machinery and processes

INFORMATION TECHNOLOGY

FORESTRYENERGY AND

ENVIRONMENTAL TECHNOLOGY

CHEMICAL TECHNOLOGY

BIOTECHNOLOGY

MARKETS• Quality competitiveness• Price competitiveness• Environmental expertise

CONSTRUCTION AND WOOD TECHNOLOGY

MANUFACTURING TECHNOLOGY

Scientific knowledge, Technology developmentKISA actors: Universities, Research institutes,

KIBS, Suppliers, Internal R&D

Scientific knowledge on; customers, segments, demand... KISA actors: Universities,

Research institutes, KIBS, clients,Customer interface

Behavioural science

TAILOREDSOLUTIONS FOR

USERS

• High value added• High service content

Psychology

Socio-economy

Logistics

Market analysis

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Sources of competence

•  ‘Those who control customer interface, control the future of the paper production’

•  Invaluable learning & information from the customers •  High Margins at the near consumer end of the value chain •  Totally new markets/products and market dynamics

Business unitas the sourceof knowledge

Corporation asa portfolio of

competencies

Supplier baseand partnersas a source ofcompetence

Consumers andconsumer

communities as a source of

competence

Stage 1:Pre-1990

Stage 2:1990 onward

Stage 3:1995 onward

Stage 4:2000 onward

Source: Pralahad et al., 2004

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Fortune concept I - value chain • Value chain diversification

Tourism

Construction

Decoration, interior design, cosiness

Textiles & clothing

Hygiene, healthcare

Food and nutrition

Packaging and logistics

Communications

Energu

Forest Industry Forest User

consumer

Temmes and Välikangas, 2011

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Fortune concept II - value chain

Tourism

Construction

Cosiness, tabletop ware

Textiles & clothing

Hygiene and healthcare

Packaging and logistics

Food and drinks

Communications and information

Energy

Forests

Forest industry

User and consumer perspective to all segments of the forest value chain

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Strategic initiative – Identifying core hubs

Different  types

of  user  contact/

experience

Different  product  spheres

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Results for a multitude of needs

•  The results thus have meaning for: •  a) Business management •  b) Personnel management •  c) Technological development projects striving for user co-created

innovations and test-labs. •  d) Researchers tackling forest sector renewal •  e) Government official seeking to find bench-marking information

concerning challenging sectoral development projects.

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Examples of new perspectives

•  Forest has many faces – forest as a friend •  Forests represent value as such •  Bioeconomy in its various forms •  Quality of life, eco-tourism etc.

•  Functional food, medical substances •  Wild berries and mushrooms •  Need for commercialization, e.g super food

•  Forest as sources of user value •  Wide range of opportunities need elaboration

• Sustainability •  Carbon capture, renewable energy

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International network consortia

• Potential partners •  MIT Sloan School of Management •  Harvard Business School •  Chinese Academy of Science •  University of Sussex