Product Diversification in Sustainability Transition: The Forest-Based Bioeconomy in Finland

Jukka Luhas, Mirja Mikkilä, Ville Uusitalo and Lassi Linnanen
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Jukka Luhas: Sustainability Science, School of Energy Systems, LUT University, FI-53851 Lappeenranta, Finland
Mirja Mikkilä: Sustainability Science, School of Energy Systems, LUT University, FI-53851 Lappeenranta, Finland
Ville Uusitalo: Sustainability Science, School of Energy Systems, LUT University, Saimaankatu 11, 15140 Lahti, Finland
Lassi Linnanen: Sustainability Science, School of Energy Systems, LUT University, Saimaankatu 11, 15140 Lahti, Finland

Sustainability, 2019, vol. 11, issue 12, 1-19

Abstract: The forest-based bioproduct field has diversified into the chemical, medical, energy, nanoproduct, and construction material sectors. This paper argues that forest-based bioeconomy has kept the focus on conventional products and new bioproducts have primarily been developed as extensions to existing product portfolios due to a lock-in mechanism, i.e., a state where an economy gradually locks itself to a dominant market position due to technical interrelatedness, economies of scale, and quasi-irreversibility of investment. The study examines forest-based product transition in the context of lock-in mechanisms through narrative analysis over the past 170 years. A theoretical framework is formulated based on complex system studies and the economics of lock-in mechanisms. The relation between the lock-in mechanisms of the regime and product diversification is described for the forest-based bioeconomy in Finland. The study supports previous findings indicating that interactions occur between the lock-in mechanisms. Furthermore, lock-in mechanisms can have a neutral, adverse, or beneficial effect on product diversification. The paper extends knowledge about the role and functioning of lock-in mechanisms in changing market environments. Recent trends in network development and foreign investment, and their effects on industrial symbiosis and product diversification, is recommendable to consider in future research.

Keywords: sociotechnical transition; systemic transition; forest industry; pulp and paper industry; wood processing; path dependence; lock-in; increasing returns; value addition (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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