Peter J. Ince

Understanding the adoption of new technology in the forest products industry

In anticipating future rates of adoption of new technology in forest products, several uniquely important factors come into play. In this respect, the role of innovations imported from other industries, the effect of raw material shortages, the importance of economic factors in adoption of innovations, and the problems presented by the heterogeneity of wood raw material and finished products are discussed. The nature of the adoption process and reasons for long lags between innovation and adoption are also addressed. Certain observations carry. implications for how research and information gathering should be conducted and what priorities should be accorded activities related to technology development and research in forest products. Many times in this century, serious timber shortages have been forecast for the forest products industry. Although the economic scarcity of some wood materials is apparently increasing (the real price of sawlogs has been rising for a long time (17)), other wood materials seem unaffected (pulpwood prices have remained relatively stable over the last four decades (28)). Thus, although numerous wood-saving technological improvements are reportedly “on the shelf ” and others are adopted rapidly by the industry, slow adoption rates for some major innovations undoubtedly reflect an appropriate response to economic conditions rather than conservatism. This paper addresses the following questions: What are some of the principal and unique influences on technological change in the forest products industry that must be understood to anticipate future rates of adoption of new technology? Do these influences currently elicit appropriate rates of technology adoption? The paper has five major sections: 1) the importance of innovations imported from other industries (interindustry flow) and other countries; 2) the effect of raw material shortages; 3) the effect of the economic performance of innovations; 4) problems presented by the heterogeneous nature of wood raw material; and 5) problems presented by the heterogeneity of finished products. It is taken as axiomatic that the impact of technological change is not felt at the stage of invention or innovation, but when improved technologies are actually used in production. For this reason, we pay particular attention to the determinants of the adoption of new technologies. Interindustry technology flow Prospects for technological change in forest products are heavily shaped by 1) commitment of resources to research and development (RD and 2) developments in industries that are remote from forest products. For example, the forest products sector has made considerable use of sophisticated electronics components, including computers, lasers, and computerized axial tomography scanners (on an experimental basis). Many industries depend upon other sectors of the economy for the expansion of their technological capabilities. In the United States, five sectors account for more than 75 percent of total RD and Research Forester, Research Forester, and Forester, USDA Forest Serv., Forest Prod. Lab., One Gifford Pinchot Dr., Madison, WI 53705-2398. Research for this paper was funded by the Forest Prod. Lab. under cooperative agreement No. USDAFP-86-0877. This paper was received for publication in November 1989.

A recursive linear programming analysis of the future of the pulp and paper industry in the United States: Changes in supplies and demands, and the effects of recycling

The impacts of increased paper recycling on the U.S. pulp and paper sector are investigated, using the North American Pulp And Paper (NAPAP) model. This dynamic spatial equilibrium model forecasts the amount of pulp, paper and paperboard exchanged in a multi-region market, and the corresponding prices. The core of the model is a recursive price-endogenous linear programming system that simulates the behavior of a competitive industry. The model has been used to make forecasts of key variables describing the sector from 1986 to 2012, demand for paper would have the greatest impact on the amount of wood used. But the minimum recycled content policies envisaged currently would have no more effect than what will come about due to unregulated market forces.

An assessment of the downturn in the forest products sector in the northern region of the United States.

The forest industry within the northern region of the U.S. has declined notably in employment, mill numbers, wood consumption, and forest harvests since 2000...a downturn exacerbated by the recession of 2007 to 2009. Longer term industrial decline (since 2000) has been evidenced by reductions in secondary products (e.g., furniture) and print paper manufacturing which can be attributed, respectively, to the lack of global competitiveness due to high U.S. wages and ascent of electronic media. In contrast, shorter term (since 2008), yet sharper declines occurred in industries such as composite panel production that serve the housing industry. Despite a decade of decline, there are future opportunities for this regions forest industry. The regions forests are predominantly within private ownership and represent tremendous volumes of some of the worlds most valuable sawtimber (e.g., select hardwoods). Coupled with this natural resource is a present, but underutilized industry with excess capacity and a skil...

Globalization and structural change in the U.S. forest sector: an evolving context for sustainable forest management /

This report examines economic implications for sustainable forest management of globalization and related structural changes in the forest sector of the United States. Globalization has accelerated structural change in the U.S. forest sector, favored survival of larger and more capital-intensive enterprises, and altered historical patterns of resource use.

Globalization and World Trade

This chapter discusses economic globalization and world trade in rela- tion to forest sector modeling for the US/North American region. It discusses drivers of economic globalization and related structural changes in US forest prod- uct markets, including currency exchange rates and differences in manufacturing costs that have contributed to the displacement of global manufacturing capac- ity. It includes detailed discussion of paper and paperboard trends. Bilateral trade flows between the USA and Canada for all wood products, were modeled within the Timber Assessment Projection System, with currency exchange rate assump- tions among key elements influencing projected trade. This chapter describes how assumptions about globalization and trade influenced model results, using exam- ples of recent RPA Timber Assessments. Techniques and results of the Timber Assessment Projection System models are compared to those of a more general global trade model, the Global Forest Products Model (GFPM). The GFPM was used recently to project international forest sector developments conditional on the 2000 RPA Timber Assessment. The results showed that while the USA, Japan, and Europe were predicted to remain major importers of forest products out to 2030, the rapid economic growth of China would make it the worlds largest market for raw wood and intermediate and final forest products. In a separate study, exchange rate assumptions were found to be important determinants of major US trade flows as projected by GFPM, particularly for manufactured commodities such as pulp and paper.

NORTH AMERICAN PULP & PAPER MODEL (NAPAP)

This chapter describes the development and structure of the NAPAP model and compares it to other forest sector models. The NAPAP model was based on PELPS and adapted to describe paper and paperboard product demand, pulp- wood and recovered paper supply, and production capacity and technology, with spatially dynamic market equilibria. We describe how the model predicts paper and paperboard product demands and trade flows over time, concurrently with regional capacity changes and corresponding shifts in process technology based on Tobins q theory of capital investment. We describe how the model was tested and calibrated and then provide examples of applications. The NAPAP model was designed to work within the context of the RPA Timber Assessment to project ongoing and future economic trends in the US and Canadian pulp and paper sectors. The model was designed to take into account changes in demand and supply for all primary pulp, paper, and paperboard products, changes in indus- try capacity by process and region, and regional markets for hard- wood pulpwood, softwood pulpwood, and recovered paper. Six North American supply regions (Canada East and West, US North, South- east, South Central, and West) were represented in the latest version of the model, along with three demand regions (Canada, USA, and the rest of the world).