Irene Kuhmonen, Annukka Näyhä, Miisa Solaranta, Janne Keränen. (2024). Can small and medium-sized companies increase the value added from wood-based side streams? Silva Fennica vol. 58 no. 5 article id 23080. https://doi.org/10.14214/sf.23080

Keywords: circular bioeconomy; dynamic capabilities; forest-based sector; strategic niche management; sustainability transition; wood-based SMEs

Highlights: Upgrading the use of wood-based side streams is necessary for circular bioeconomy; Small and medium-sized companies offer innovative solutions for using wood-based side streams; Companies utilizing the side streams host a variety of dynamic capabilities; Strong technological orientation reduces horizontal networking among innovative small and medium-sized companies; The forest-based regime resists the spread of innovations aiming for higher value added.

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One of the central goals of circular bioeconomy in the Finnish forest-based sector is upgrading the use of wood-based materials, especially wood-based side streams, to higher value-added products. However, despite these ambitions, most wood-based side streams are used in energy production. Within the forest-based sector, innovative solutions for higher value-added production of wood-based side streams are being developed within small and medium-sized companies (SMEs). Therefore, to promote the process of upscaling these solutions, understanding the success of these companies is pivotal. For this end, we conducted a qualitative study with 10 forest-based SMEs utilizing wood-based side streams to understand both the internal and external factors affecting their ability to scale up their business models. By applying the dynamic capabilities approach from management research and the strategic niche management approach from sociotechnical transition studies, we found that even though the companies are internally well positioned to succeed in their growth aspirations, they face barriers from the dominant forest-based regime. The studied SMEs are facing a mismatch between their own business models and the rules and operating principles of the forest-based sector based on linear economy. Overcoming these barriers and challenging the dominant structures within the Finnish forest-based regime would require joint efforts from the companies. However, the companies have a strong technological orientation, which makes them hesitant with regard to horizontal networking. They also operate in diverse markets, making it difficult for them to find common ground. As a result, the pressure for systemic transformation within the forest-based sector remains nominal.

Kuhmonen, University of Jyväskylä, School of Business and Economics, P.O. Box 35, FI-40014 University of Jyväskylä, Finland https://orcid.org/0000-0002-1407-8349 E-mail: irene.a.kuhmonen@jyu.fi
Näyhä, University of Jyväskylä, School of Business and Economics, P.O. Box 35, FI-40014 University of Jyväskylä, Finland E-mail: annukka.nayha@jyu.fi
Solaranta, University of Jyväskylä, School of Business and Economics, P.O. Box 35, FI-40014 University of Jyväskylä, Finland E-mail: miisa.solaranta@gmail.com
Keränen, VTT Technical Research Centre of Finland Ltd, P.O. Box 1603, FI-40101 Jyväskylä, Finland https://orcid.org/0000-0002-5626-2929 E-mail: janne.keranen@vtt.fi

article id 23068, category Research article

Anne Viljanen, Mikko Kurttila, Anne Toppinen. (2024). Retrofitting urban areas with wood: the origin of new projects in an emerging business ecosystem. Silva Fennica vol. 58 no. 4 article id 23068. https://doi.org/10.14214/sf.23068

Keywords: decision-making; business ecosystem; dynamic capabilities; project initiation; vertical building; wooden retrofits

Highlights: Decarbonizing building stock requires businesses to create new solutions for markets; Wood-material based retrofits offer new possibilities but are yet rare in urban context; The city-owned housing companies are found to be most aware of seizing opportunities of climate-benefits and facelifts in the less appealing suburban areas; Actors use dynamic capabilities in niche-level projects, yet the reconfiguring stage of business models is not visible.

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Nurturing a low-carbon residential building stock requires businesses to create new solutions for markets. Wood material-based retrofits would be one solution but have remained rare in the urban context. Our study explores the structure and dynamics of an emerging business ecosystem (BE) of wooden retrofits in Finland. We study wooden retrofit projects, from the perspective of the initial steps of local-level development. By applying the concepts of BE and dynamic capabilities, we aim to shed light on the role of actors and their early-stage decision-making and use actor mapping and qualitative analysis of 27 thematic interviews with retrofit businesses and municipal actors. Results show that project initiation has relied on individual champions seizing opportunities as a main base in building dynamic capabilities. Builders and customers are key actors of wooden retrofit projects in local BEs in Finland. The identified actors are further involved with future plans for wooden retrofits, some with ambitious deep renovation with wood. Motivations for projects are driven from urban densification strategies, improvement of suburban neighborhood attractiveness and from the efficiency of space utilization. Results further elaborate a certain degree of difficulty in the early-stage decision-making. This study contributes to the scientific knowledge of both the BE and the dynamic capability perspective by exploring a path to material-driven sustainable construction in the Finnish context. We provide new information on this emerging retrofit construction business with potentially significant international implications if scaled up more widely.

Viljanen, University of Helsinki, Faculty of Agriculture and Forestry, Latokartanonkaari 7, 00014 Helsingin yliopisto, Finland https://orcid.org/0000-0001-7166-8022 E-mail: anne.viljanen@helsinki.fi
Kurttila, Natural Resources Institute Finland (Luke), Research and Customer Relationships, Yliopistokatu 6, FI-80100 Joensuu, Finland https://orcid.org/0000-0001-5290-4771 E-mail: mikko.kurttila@luke.fi
Toppinen, University of Helsinki, Faculty of Agriculture and Forestry, Latokartanonkaari 7, 00014 Helsingin yliopisto, Finland https://orcid.org/0000-0003-0910-1505 E-mail: anne.toppinen@helsinki.fi

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