Evaluation of Global
Competitiveness in Wood-based
Industries. Economic and
Environmental Aspects
Research proposal for Visby Program Grant,
sponsored by Swedish Institute
Conducted at Swedish University of Agricultural Science,
Department of Forest Products
Structure of presentation
Formal part
1.
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2.
Some personal information (who am I , where I come
from)
Background and achievements
Previous studies, research and projects
General presentation of current project
Focus on questionnaire development as integral part of
current research
Expected outcomes of the project
Feedback, comments and suggestions
Informal part
FORMAL
PART
Some personal information
(who am I , where I come from)
Olena Maksymets,
PhD in Economics
Associate Professor
Department of International Economic Activity Management
National Forestry University of Ukraine,
Lviv, Ukraine
More detailed information
can be found:
https://sites.google.com/site/olenamaksymets/home
Ukraine within Europe
Map of Ukraine
Background and
achievements
Education
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2001-2005 – Doctoral studies, National Forestry
University of Ukraine, Lviv,
PhD in Economics (Environmental Economics) (2005)
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1999–2000 – Ukrainian State University of Forestry and
Wood Technology, Lviv, Specialist Diploma in
International economic activity management, with
distinction (2000)
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1995–1999 – Ukrainian State University of Forestry and
Wood Technology, Lviv, Bachelor Degree Diploma in
Management, with distinction (1999)
Professional Training
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09.2012-02.2012 – Visiting scholar, Sveriges lantbruksuniversitet
- Swedish University of Agricultural Sciences (Uppsala, Sweden)
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01.2011 – 05.2011 – Visiting Scholar, the Pennsylvania State
University (University Park, PA)
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09.2007-03.2008 – Fulbright Senior Scholar, Washington
University (Seattle, USA)
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03.2000-05.2000 – Internship, Ministry of Economy of Ukraine
(Supervisor – Chief of Furniture and wood-processing industry
Department O. Varenytsya)
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07.1998-10.1998 – Research study on Wood-processing industry
products markets in Western Europe, University of Padua (Italy)
(Supervisor Prof. Davide Pettenella)
Previous studies, research and
projects
Major direction of research
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Competitiveness of forest-related products
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Trade flows in forest and wood-working industry products
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Wood products’ markets research
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Analysis of TOP100 forest companies’ results over last 5
years
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Sustainability and trade flows in forest products
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International marketing in forest-related industries
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Eco-effeciency of international trade of Ukrainian state
forest enterprises
Courses taught
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Marketing in forest-related industries,
International marketing,
International economic activity analysis,
Economics and finances of the enterprise,
International management,
International investment and innovation management
General presentation of current
project
1. Why it is important to consider both
economic and environmental aspects
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wood is not only economically efficient product, but also
as environmentally friendly renewable resource, is
suitable for the a great variety of applications.
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evaluation of competitiveness should encompass these
two categories. The one couldn’t exist without another,
and to achieve considerable and mutually beneficial
results these two aspects must be studied as interrelated
2. Why it’s important to consider global
aspects of the issue
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Globalization and international competition are impacting the
way forest products companies operate. New opportunities
and challenges arise that allow investments, capital and
technology to move easily into those world regions where
manufacturing and trade give competitive advantage
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“Today forest company might have its headquarters in the
USA, build a processing mill in Central America (where trees
grow to commercial maturity in less than 10 years),
manufacture in China and sell to markets all over the world”
(Alvarez, 2007)
Some facts about wood-based industry and it’s
role for Europe
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Wood-based industry is a major employer in many of the Member States of the
European Union and features among the top 3 industries in Sweden, Austria, Finland
and Portugal (European Commission, 2010). A provider of welfare in Europe the
woodworking industry employs more than 2,7 million people in the EU 25. In common
with all traditional industries, it plays an important part in achieving the Lisbon goal of
becoming the world’s most competitive region.
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The industry is a significant contributor to rural development in all European countries
as well as it generates opportunities for cross-border entrepreneurship. Firms are
often located in remote, less industrialized or developed areas, making an important
contribution to the rural economy. This all is of great concern of the EU Eastern
Partnership plan.
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In Sweden, the forest-products industry accounts for 15 to 20 percent of the total
industrial investments. Together with indirect employment in sectors that supply it with
goods and services, it employs around 180,000 people over the entire country, more
than a quarter of total industrial employment (Swedish Forest Industries Federation,
2008).
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It should be added that the industry covers a wide range of activities, from sawmilling,
planting to the production of wood-based panels, veneers and boards; from
construction products to joinery; from pallets and packaging to furniture; from bio
energy incentives to wooden pellets and briquettes production.
THUS…..
The wood-based industry has potential
to contribute much not only to a
single country’s sustainable
development and economic growth,
but also to European region
And that is why
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The assessment of competitiveness and competitive advantage is
vital taking into the account tough conditions.
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Enterprises are nowadays fighting for financial resources and raw
materials. So revealing competitive advantages and disadvantages
on the industrial level is of increasing interest not only to the industry
itself, but also to potential investors.
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So far least examined and developed are different evaluation
aspects of the industry competitiveness taking into account
globalization processes.
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Also environmental aspects are not widely considered in
assessment of wood-based industries competitiveness.
The aim of the research is to develop
the methodology (aggregated index)
enabling to evaluate wood-based
industry competitiveness taking into
account globalization and
environmental concerns
In this regard
Competitiveness of wood-based
industries in Sweden, USA and
Ukraine will be evaluated using the
aggregated index
Research tasks
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examine the peculiarities of measuring competitiveness on different levels
(global, national, industrial, company) as well as in forest and wood-based
industries;
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identify factors of competitiveness in forest and wood-based industries and
their changes in new conditions;
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study methodical approaches to evaluate competitiveness in forest and
wood-based industries (National and Global competitiveness indexes);
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survey business representatives’ and academicians’ attitudes towards
factors that determine competitiveness in different sectors of wood-based
industry;
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determine the role of clusters in wood-based industries development and
their influence on industries’ competitiveness;
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develop an aggregate index enabling to evaluate competitiveness of woodbased industries.
In this context the research
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seeks to benchmark the global wood-based industries
according to their competitiveness
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aimed to highlight the strengths and weaknesses of the
business environment of the participants for selected sectors
of the wood-based industries
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will provide a basis for a debate and, and support in the
identification of scope and direction for profitable policy
intervention and investment flows.
The research will be both qualitative
and quantitative, so the following
methods will be used
Quantitative Methods
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methodology of computing Competitiveness index based on Porter’s
diamond of each sector (but sustainability factors in the competitiveness
should be emphasized instead of price factor);
methodology of computing Forest Investment Attractiveness Index;
factor analysis – to extract the unobservable dimensions which include
many variables;
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econometric methods (regression and correlation analysis);
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methods of economic statistic;
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Cost-Benefit Analysis.
Qualitative Methods
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desk research,
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stakeholder meetings,
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questionnaires, field research, interviews (in-depth,
informal),
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causal chain analysis (CCA),
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benchmarking.
The research will be conducted in two
stages
1.
2.
First stage – development of the questionnaire to
interview business representatives, experts and
scholars on the importance and relevance of different
indicators that will be a part of aggregated index.
Second stage - empirical testing of the index.
Quantitative data can be obtained from statistical
databases. Qualitative data will be gathered via
questionnaires (different from the first one) sent to
business representatives.
Core elements of competitiveness index
for wood-based industry
1.
2.
3.
Country-related factors (25%) – X1
Business environment related factors (40%) – X2
Enterprise-related factors (35%) – X3
CI WBI  0.25X 1  0.4 X 2  0.35X 3
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Country and business environment related
factors are the preconditions for industry
competitiveness - they reflect what already
exists and what company deals with
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Enterprise-related factors are the reflection of
the way company reacts on the competitive
environment it works in
Country-related factors
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Can be described with the help of World
Economic Forum’s GCI (based on Porter’s
methodology)
Business environment related factors
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Resources cost and condition
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Processing development
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Market development
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Sustainability and environmental concerns
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Government incentives and industry related policy
Business environment related factors
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Resources cost and condition
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Contribution of domestic forest ownership and timber supply
organization to efficiency
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Technical manpower availability
Technical manpower cost
Energy availability
Energy cost
Transport infrastructure adequacy
Transport cost
Capital accessibility
Capital cost
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Timber availability
Timber cost
Processing development
Market development
Sustainability and environmental concerns
Government incentives and industry related policy
Business environment related factors
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Resources cost and condition
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Processing development
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Public technology R & D infrastructure quality
Industry process technology quality
Industry patents filed / purchased
Machinery and equipment market quality
Development of supportive value-added industries
Market development
Sustainability and environmental concerns
Government incentives and industry related policy
Business environment related factors
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Resources cost and condition
Processing development
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Market development
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Domestic market growth rate
Domestic customer quality consciousness
Export market growth rate
Export market customer quality consciousness
Trade disputes and barriers
Growth rate and developments in supportive branches
Importance of marketing measures
Public image of wood-based industries
Sustainability and environmental concerns
Government incentives and industry related policy
Business environment related factors
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Resources cost and condition
Processing development
Market development
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Sustainability and environmental concerns
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Importance of sustainable activity for the industry
The state and level of customers’ and clients’ environmental concerns
Adoption of forest certification schemes
Adoption of chain-of custody schemes
Adoption of product quality standards
Ability to get price premium for environmentally sound products
Quality of environmental legislation
Quality of forest management
Incentives and related procurement policies
Government incentives and industry related policy
Business environment related factors
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Resources cost and condition
Processing development
Market development
Sustainability and environmental concerns
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Government incentives and industry related policy
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National forest policy support
Taxation incentives for investments
Maturity of competition policy
Conflicts with traditional forest dependent communities
Private investment in timber production
Policy on FDI into industry
Enterprise-related factors
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Management system
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Technology adoption, level of R&D investments
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Sustainability reporting and level of response to
environmental concerns
Enterprise-related factors
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Management system
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Managerial manpower availability and cost
Management system quality
Investment in management innovation
Investment in service innovation
Investment in management training
Technology adoption, level of R&D investments
Sustainability reporting and level of response to environmental concerns
Enterprise-related factors
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Management system
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Technology adoption, level of R&D investments
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Collaboration with R&D services and universities / clusters
development and importance
Process innovation investment
Product innovation investment
Technology training investment
Sustainability reporting and level of response to environmental concerns
Enterprise-related factors
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Management system
Technology adoption, level of R&D investments
Sustainability reporting and level of response to
environmental concerns
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Incorporating sustainability aspects into companies’ strategy
Reporting using GRI method or sustainability reports
Adoption of environmental standards
Focus on questionnaire
development as integral part of
current research
Some hypotheses
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There is difference in competitiveness in the industry
depending on production orientation, scale of
production, as well as geographical presence in
terms of manufacturing and trade and this should be
reflected in the methodology of Competitiveness
Index for wood-based industry
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Sustainability issues have great impact
competitiveness of the industry through entire
supply chain
Focus groups
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Selected business representatives
Associations
Academicians
Government institution representatives
Procedure of data collection –
questionnaire survey, interviews
and focus groups discussions
Selection procedure
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For each country representatives in such branches
should be questioned/interviewed
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Forestry/sawmills
Wood-based panels and flooring
Furniture and furniture parts
Pulp, paper and packaging
Wood energy
Enterprises of different size and with different
geography of operational activity should be
considered
Sampling (draft goal)
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Sweden:
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USA (PA state):
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5-10% of all SME’s in the industry
around 50% of large-scale enterprises and TNCs
in the industry
20% of SME’s in the industry
50%-60% of large-scale enterprises
Ukraine:
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5% of all SME’s in the industry
70% of large-scale and TNCs in the industry
Draft of the
questionnaire (distributed)
Expected outcomes
The research will be important to the development of woodbased industry not only in Ukraine, but also in other countries
due to the following expected results
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improvement of the methodology for the evaluation of competitiveness in wood-based
industries;
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determination of the core factors influencing the development of wood-based
industries in different countries and particularly in Sweden, Ukraine and USA;
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assessment of international competitiveness, comparative economic advantage, and
markets for wood-based products (including substitution of wood vs. non-wood
products), supply, demand and price analysis,
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assessment of cross-border cluster development in the industry (including valueadded wood products manufacturing clusters) which is a part of the EU Eastern
Partnership plan in terms of economic development;
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recommendations for industries development, marketing, and regional analysis of
economic contribution of wood utilization;
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recommendations for establishing successful business-to-business as well as
business-to-science relations.
Feedback, comments and
suggestions are welcomed!
THANK YOU FOR THE ATTENTION!
INFORMAL
PART
THANK YOU ALL FOR
COMING!!!!!