Esko Passila’s public defence of a doctoral thesis

Defence to be held at Lappeenranta University of Technology 27.8.2010 at noon

Abstract: The state and future SME’s of Finnish Woodworking Industry

The objective of this research is to reveal the future of SMEs’ of woodworking industry. It was also the aim to find out how to influence to this future by the information achieved. Additional target was to examine the problems in generational transfer of small and medium size companies. The Finnish Association of Furniture and Joinery Entrepreneurs provided the research results of the survey made amongst their members. The research was made 1999 – 2000. Target group consisted of all manager owners born before 1954. It represented 27% of population of association. The result was that only 30% had successor in the family. The rest 70% was either uncertain or had no knowledge of successor. The result corresponds with other Finnish and International researches. 

The objective of the research was to assess the future of small- and medium-sized companies (SMEs) in the woodworking industry. Based on information received from the reearch, a further aim was to consider ways in which future scenarios could be influenced. In addition, the problem of generational transfer in SMEs was considered.

The target group of SMEs in the woodworking industry is often positioned in different industrial sectors of the Finnish forest cluster. Current and nascent trends were assessed based on statistical data from a variety of reliable public sources and possible future scenarios were calculated with the Delphi method. Research questions were formulated based on a SWOT analysis. An expert body of 31 individuals from the woodworking industry, forest industry institutions, research institutes and universities was chosen to be surveyed. 25 replies, representing a response rate of 80%, were received and the anonymous answers were analysed graphically, permitting replies to be assessed based on functional area.

The key result of the research was that the number of owner-managers retiring was great relative to the population as a whole. The number of companies in the woodworking field has fallen steadily since 1989 and the most likely future scenario is that a major part of the Finnish woodworking industry will transfer production first to the Baltic states and later Russia, following in the footsteps of the sawmill and board manufacturing industry.

Avoiding this scenario requires the active participation of Finnish society in the generational transfer process. Therefore the research recommends that the process of generational transfer is managed and lead by Agency of Finnish Government. Changes in the structure of forest ownership may also have a negative effect on the future of the forest cluster. It is also obvious that new arrangement should be done in order to avoid rawmaterial shortage in the future.

Key words: forest cluster, value chain, bionomics, evolution, SME, generational           transfer, forest ownership.

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