iufro all-division-5 conference "forest products and environment – a productive symbiosis”...

IUFRO ALL-Division-5 Conference "Forest Products and Environment – A Productive Symbiosis” October 29 – November 2, 2007 - Taipei, Taiwan.

Value-Focused Forestry in British Columbia: Competitiveness and Sustainability Issues in the

Secondary Wood Products Industry

Wellington Spetic, Robert Kozak, and Thomas Maness

Faculty of Forestry

The University of British Columbia

4th Floor - Forest Sciences Centre

2424 Main Mall

Vancouver, BC V6T 1Z4, Canada

Email: [email protected]


1. Background

2. Objectives

3. Methodology

4. Results

5. Future Research


Background:

- The forest sector is one of Canada’s major economic

powerhouses:

- the world’s largest exporter of forest products;

- forest industry accounts for nearly 3% of the GDP;

- over 10% of its total exports.


Background:

...in the primary sector,

BC - with its large endowment of unique wood resources and access to strong markets - is Canada’s frontrunner…

Source: www.wildnatureimages.com


Background:

however, this scenario is changing quickly for BC’s primary sector:

- mountain pine beetle infestation;- higher input prices (e.g. energy);- shifting demand for traditional commodities;- changes in export markets;- competition from lower-cost regions;- trade disputes (i.e. softwood lumber agreement);- appreciation of the Canadian dollar.


Background:

MPB infestation

Source: BC’s Ministry of Forests and Ranges

Source: BC’s Ministry of Forests and Ranges

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Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07

US$

Oct 07 = US$ 1.03

All-time high = US$ 1.06

C$ appreciation


Background:

A new paradigm change for British Columbia - shift from a volume-based to a more value-focused forest sector.

In line with sustainability concepts (i.e. economic + ecological + social values).


Background:

...a value-focused forest sector in BC would better take into account notions like:

- commodity industries wherever most appropriate;

- higher value commodities from more flexible mills;

- secondary wood products;

- non-timber forest products;

- ecosystem services.


Background:

Competitiveness - A Dynamic Concept

The term is used interchangeably with:

- comparative advantage (economic cost of production);

- financial performance of firms;

- productivity or technical efficiency;


Background:

Competitiveness - A Dynamic Concept

The term is used interchangeably with:

- overall performance of countries, regions, or industries;

- qualitative management concepts (firms’ capacities, human capital, innovativeness, knowledge-based value creation).


Background:

Increasingly, firms are incorporating sustainability issues

into their business strategies and operations.

for larger, multinational corporations:

- access to potential new markets and to ethical

investment funds;

- the ability to attract and retain top human resources;

- the creation of non-tangible product value;

- competitiveness, legitimization, and ecological

responsibility.


Background:

for Small and Medium Enterprises (SMEs):

...the jury is still out!

when compared to larger firms...

- SMEs tend to be more reactive, small-scale and ad hoc in their changes.

- virtually all secondary wood products industries are SMEs.


Objectives:

For BC’s secondary wood industries, we want to assess:

- long-term competitiveness factors of firms;- sustainability issues; and- their interrelationship.


Methodology:

There is an increasing need for inter- and multi-disciplinary research strategies.

Yet, literature indicates that there is no single universally adopted and practised methodology for measuring competitiveness, sustainability issues, and the relationship between the two.


Methodology:

... on the negative side: it may hinder the ability to easily draw from existing

studies.

... on the positive side:unique opportunity to address these issues in BC’s secondary wood industry and benchmark them against other producing regions.


Methodology:

• Existing literature• Theoretical ideas and

notions

• Qualitative and quantitative empirical evidence or data

• Descriptive and inferential results

• Refining and understanding of the phenomenon

• Final representation

• Analytical framework• Classification and

categorization of the phenomenon

Deduction

Retroduction

Induction

Research Framework

Adapted from: Ragin (1994); Jeucken (2004)


Methodology:

Today’s presentation includes information from:

a. the current literature; and

b. in-person and telephone interviews.

Content Analysis

Descriptive statistics


BC's Total Wood Products Manufacturing Shipments

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2

4

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10

12

1996 1999 2002 2005

C$ b

il.

Primary

Secondary

...the current situation:


Denmark

Germany

US Great Lakes

Ontario

BC

5 -

1 -

3 -

Management

Capability

Workers Skill Level

Clustering

Policy

Industry & Market Structure

Te chnology

Raw

Material

Secondary Wood Products Manufacturing: performance on selected qualitative dimensions of five global regions

Source: Jaakko Poyry


Few (if any) scientific studies on competitiveness, sustainability, and their interrelationship on BC’s (SMEs) wood products manufacturing sector.

As far as other developed economies and industries are concerned...

1. Competitiveness & SMEs:

- under unprecedented pressure from globalization;- need to learn to cope with a new production

paradigm;- need to engage in knowledge-based economic

activities;



1. Competitiveness & SMEs:

- innovations and value generating activities;- (-) SMEs lack the resources for large investments;

but- (+) SMEs are flexible and quicker to adapt;- (+) SMEs have increased in most developed

countries;



2. Sustainability & SMEs:

- almost entirely focused on larger enterprises;- linkages with larger companies’ supply chains;- SME’s cumulative impact high importance for

sustainability;- business case for sustainability can create

opportunities; but can also act as a market barrier.

3. Competitiveness Sustainability:

- Literature shows positive, negative, and no relationships.


Results:

1. Long-term competitiveness factors for BC’s secondary

sector:

a. innovative management.

- entrepreneurial culture

- “business people”

- market forces government

- ability to attract capital

- design

- good sourcing

- customers services


Results:

b. specialization.

- higher-end customized market

- commoditizing product markets

d. branding.

- technology & design

e. each segment needs its own mix of traditional factors.

- i.e. access to technology, fibre, capital, markets,

and labour.


Results:

2. Sustainability.

a. the Green Building effect

- green value-chain

- BC’s booming construction sector (residential,

2010 Olympics) specifiers LEED points

secondary producers and their suppliers


Results:

3. Competitiveness Sustainability.

a. the Green Buildings and Healthy Houses effects

- SMEs dependent on value chain

relationships.

- first-mover advantages

- differentiation opportunities

b. others

- “green” capital? targets for SRI?

- “green” process innovations vs. end-of-pipe

remedies?


Future Research:

- complete the inductive phase

- empirical measurements (survey research)

- as a benchmark, extend the study to NZ, Chile, and Brazil

- finalization (retroductive) phase (policy recommendations)


Thank you!

Email: [email protected]

iufro all-division-5 conference "forest products and environment – a productive symbiosis”...

Documents

conference forest products

iufro alldivision

productive symbiosis

valuefocused forest

appreciation slide

floor forest sciences

bc s primary sector

future research slide