Technology improvements and innovation in the forestry products sectors in Russia

Abstract

DUE TO COPYRIGHT RESTRICTIONS ONLY AVAILABLE FOR CONSULTATION AT ASTON UNIVERSITY LIBRARY AND INFORMATION SERVICES WITH PRIOR ARRANGEMENT Despite the largest forestry resources in the world, Russian forestry products sectors lag behind international competitors in product and process technology sectors, and Russia remains the largest exporter of raw timber and low added value timber products. The study develops an extended framework of enterprise and sector level learning within the context of the National System of Innovation (NSI) to examine technology improvements and innovation in less dynamic low technology sectors and applies it to forestry products sectors in Russia. In particular, the study addresses the question „Why do Russian forestry products sectors and firms lag behind their foreign competitors in technological improvements, innovation and higher value added production?? and seeks to explain why Russian forestry products industries, which appear to have the potential based on existence of the required natural resources, are unable to achieve international competitiveness in markets for higher value added products. Using company level data, the study utilised complementary quantitative and qualitative methodologies, which allowed the use of evidence from qualitative research findings to corroborate quantitative research findings. The results of the statistical analyses reveal that Russian companies perceive that the ability to innovate is positively associated with R&D commitment and amount of training. Case study evidence demonstrates very weak commitment to R&D in all but one companies and much of the technical training is confined to on-the-job training because of financial and personnel constraints. This combination of statistical and case study evidence goes some way towards explaining the lack of technological success. Lack of technological capability is found to be a less serious obstacle than limitations of social capital, investment, and external support mechanisms in both the statistical and case study evidence. The majority of learning effects observed in companies were related incremental improvement of existing skills and competences. The evidence from case studies indicates that companies have reached the „adaptation stage? of capability development i.e. they have the ability to use, adapt and stretch the technology and equipment. However, companies? ambitions to upgrade their technologies were limited by internal and external constraints. The internal constraints were that their human and financial resources were fully stretched. Companies survived by limiting their activities to what is feasible within their resources and capabilities and the markets they can serve. Companies appear to possess learning ability and necessary skills and competences to produce value added forestry products as they demonstrated first-order learning, which takes place within firms. We observed limited second- and third-order learning (learning between firms and at the level of the whole economy which are important elements of technological „catch up?). Existing mechanisms for leveraging more advanced technology at the national, enterprise and sector level were also very limited. An important finding of the study is that for survivors, working under serious constraints sharpens, rather than weakens, some technological competences, notably those for making good use of the available technology and equipment, and adapting and stretching the technology. Improved financial and human resources and better external linkages and business environment are needed to develop more advanced competences and higher value added products. Theoretical insights and propositions generated by the study need to be tested with evidence from other laggard sectors and enterprises who are progressing very slowly in catching up or do not see any prospects of catching up