The bioeconomy has potential, but it still has a long way to go before it becomes a large and profitable business.
Since the time between must be lived, the forest industry's basic business must first be fixed - only then can we invest in product development. There is also a multi-stage work ahead in developing new business models.
Chairman of the Board of Directors of Vision Hunters, a forestry consulting company Rainer Häggblom According to him, the biggest problem in the Finnish forest industry today is the printing paper market, which is not growing.
“In the current situation, competitiveness determines who will survive. The competitiveness of the printing paper industry in Finland is not good. In addition, logistics costs are rising significantly.”
Can globalization be blamed for the current challenges facing the forest industry?
"No, because most of the predicament is due to Finland's own lack of competitiveness."
Doctor of Technology with a long career in the forest industry Ainomaija Haarla is on the same lines.
"Absolutely not. Every industry has to adapt to constant change, preferably anticipate it," says Haarla.
“The challenge in the 2000st century has been more about understanding customers’ business and its changes, as well as consumer behavior, than developing more efficient processes. The industry’s traditional seven-year cycles began to accelerate in the late 1990s, and this was not immediately noticed. Consumer demand for many printing papers began to decline in the USA in the late 1990s. Weak signals had been identified and were discussed within companies. However, money was still being made from existing businesses and there seemed to be no rush.”
According to Haarla, it is also worth remembering that old products were constantly being developed and cost competitiveness was optimized.
"New products were also developed, but it has been slow. Risks should have been taken more quickly."
Bioeconomy streams
Haarla, a government professional and Executive in Residence for Bioeconomy at Aalto University's School of Chemical Engineering, points out that wood has always been at the heart of the bioeconomy in Finland. There is no shortage of this versatile raw material.
As Haarla, who is considering the creation of bioeconomy concepts, lists, in addition to traditional products, wood raw material can be used for fuel, composite materials, chemicals, medicines, cosmetics, food and even clothing.
Multidisciplinary teams are also developing a wide variety of biomaterials enabled by new technologies.
"Among them, engineering students and designers who know the processes are making consumer products, at least prototypes. In the absence of customers, testing new materials has been challenging at times."
However, developing the bioeconomy into a commercially significant area takes time and requires strong basic research before application trials.
"We should have significant new businesses based on Finnish wood fiber, with much more added value than the current ones, in about ten years. The scale of individual new businesses will probably be significantly smaller than at present."
A sense of realism
Rainer Häggblom also believes that the potential of the bioeconomy is significant. However, the challenge, he says, is precisely the time between the present and the new.
"The potential is there, and there is no shortage of innovation, but the market for new products is small. It takes years of work before the market demands them, so now we need to ensure the competitiveness and profitability of small industries so that long-term opportunities are realized."
According to Haarla, the basic industry has three major strategic challenges to solve in bridge construction.
“How to secure the cost competitiveness and profitability of existing capacity, how to participate in structural change and how to develop new business at the same time.”
“Ideally, large companies would lead the industry’s renewal, as they still have revenue streams in their existing businesses. They could complement their expertise with the specialist expertise of smaller companies, through thoughtful partnerships with the small and medium-sized enterprises (SMEs) sector and startups.”
Text: Jaakko Liikanen
Photo: Stora Enso
