Hidden champions of the B.C. forest industry: Are small firms at the cutting edge of value chain innovation?

Abstract

British Columbia's once formidable commodity based forest industry has undergone profound economic restructuring. "Value-added" (secondary) manufacturing is a key component of contemporary production, and is widely recommended in theory and industrial strategy for achieving higher value and overcoming high costs and wood fibre constraints. High value production anticipates the role of small and medium sized enterprises (SMEs) operating within flexibly specialized networks. My thesis addresses this promise. An extended case study research methodology underpins this investigation of local development, growth and networking strategies of 14 BC firms. Conceptually, the research integrates flexible specialization and value chain literatures within the specific contingencies of forest resource production. The results indicate that advanced networking and communication synergies anchor firms to the home milieu and connect them to export markets. Flexible specialization production shows potential in the current restructuring of BC's forest economy. Yet, the long-term prospects for sustaining valueadded production remain unclear.