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.
Highlights
Transition to a sustainable bioeconomy is one of Europe’s responses to the key environmental challenges of climate change and resource depletion [1]
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
Industrial symbiosis between the wood processing and machine industries is first found in the product diversification of the 1900s
Summary
Transition to a sustainable bioeconomy is one of Europe’s responses to the key environmental challenges of climate change and resource depletion [1]. A robust bio-based industrial sector will reduce dependency on fossil-based products, support climate targets, and lead to sustainable growth [2]. The bioeconomy accounts for around 4% of the gross domestic product (GDP) of the European Union (EU) [3] and around 16% of the GDP of Finland [4]. Cooperation with other industries, such as the machine industry and the packaging industry, has created unique technologies, know-how, and solutions, and has made Finland a forerunner in bioeconomy development [5]. In relation to its size, Finland is more dependent on its forest and the forest-based bioeconomy than any other country in the world: bioeconomy-related exports account for more than 20% of export earnings. The bioeconomy creates welfare through employment effects, especially in sparsely populated regions [6]
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