Visions of the servitization of forest bioeconomy in the next ten years

Writer: Lia Laukkanen, forestry student UEF

Bioeconomy includes producing renewable resources, refining them, using and recycling them and the services that are based on them. In forest bioeconomy the servitization is constantly present. It does not happen quickly and it is a transition between already existing elements of the system. The amount of new products and services based on wood is expected to grow and thus escalates the regeneration of the forest sector, but most of the new products and services are still in early stages, so for example in the next ten years many services are still shaping and evolving into their final form. In forest bioeconomy the services are added in the products and product-based businesses shift step by step to service business. Some products can also be changed into services only, so the products are servitized.

Ten years is a relatively short time period, but in that time for example the resources can be integrated in a new way that can jointly produce solutions. Some examples of this are the new business models of circular economy, and forest bioeconomy is an integral part of circular economy and its markets. Digitalization and the development of technology are in key position on the field of forestry and in forest bioeconomy, especially when new solutions such as new sharing economy platforms and service systems are created. One goal of the innovation activity of the forest industry businesses should be more radical product-service-concepts which lead to greater evolution of technology of the processes. This will lead to better competitiveness and better productiveness of the businesses on the sector. This can be seen in the development of forest bioeconomy. Servitization can also be seen in the forest bioeconomy now and in the next ten years in a form of different (international) technology programs. For example Finnish-Swedish Wood Material Science and Engineerin Research Programme (2003–2006) conducted interdisciplinary research to e.g. develop ecological and cost-effective forest bioeconomy services. Such programs guide the development of the businesses working within the forest bioeconomy sector and the servitization of the products and the services that have originated from the servitization.

When forest bioeconomy is servitizated, it is possible to shift from system level to another, which is known as the possibility of paradigm shift to service-based forest bioeconomy. It means that new ways to organize the production are developed, but also that values and benefits are redefined. These new definitions can be something that do not exist yet, but will be invented and redefined in the next ten years. For example, developing new (forest) bioeconomy services in liaison with the clean-tech sector can create and open unexpected, new markets to the businesses operating within the bioeconomy sector. This describes well the constant activity of servitization, because even if the change itself isn’t fast, the new innovations and for example the business fusions (inclusively in the field of forest industry or different industries) can happen in a relatively short time period when new businesses and therefore new services are created. An example of this is the listed company Metso-Outotec, in which Metso was operating on the field of forestry industry as well.

The development of the forest bioeconomy services in the next ten years can be really fast, because even when switching from system level to another is not fast, the new innovations and services entering the markets and the servitization of the (new) products can be quite fast. Digitalization and bringing the services online, including the easier access via smartphones for example, give a chance to develop the already existing services alongside the new ones. Especially technology development is fast which can be seen as a rapid development of the forest bioeconomy services in the next ten years, especially as the new sharing economy platforms.

War in Ukraine: impacts on forest-sector businesses in Finnish North Karelia

Authors: Jo Van Brusselen & Fredric Mosley

Key messages

  • Rising energy and raw material prices raise costs and cut into profit
  • Trade restrictions impact raw material imports and high-tech exports

According to a survey implemented by the Bioscope project with businesses in the forest-based sector in North Karelia (Finland), 83% of respondents expects that that the Russian invasion of Ukraine will affect their businesses. At the time of publishing this blog, analysis is based on inputs received from 12 correspondents, which represents 13% of the total number of forest-based sector businesses in the region. While the sample does not allow to be conclusive, there are good indications of the key issues for businesses in the region.

Rising raw material prices (69% mentioned in of the responses), EU/Finland import restrictions (62%) and rising energy prices (54%) were considered to be the most impeding factors for wood-based bioeconomy businesses in North Karelia. As a result, businesses are in search of alternative raw material sources, intermediate products, and alternative logistics routes. Increasing product prices will impact profit margins and competitiveness of business in the region. For some businesses Russia was also an important export destination, which is now temporarily halted. Not only is the wood processing industry affected, but also forestry work at the beginning of the value chain, due to the high fuel costs and increased fertilizer prices are reducing forest improvement efforts.

Since the launch of this questionnaire in the beginning of April, restrictions have been further strengthened and while limitations on transportation made the wood trade practically impossible from Russia to Finland, now roundwood trade has been explicitly banned. As North Karelian industry relied on steady imports of roundwood, this does naturally impact the resourcing effort of affected companies.

Coal and oil, all imported from Russia, represented 6% and 22% in Finland’s total energy consumption in 2020 (Statistics Finland, 2021). Before the war, Finland also imported considerable amounts of biomass for energy production from Russia but which are now not available anymore, affecting district heating and private households. Reduced availability and rising prices affect heat and power costs, and risen fuel costs already have a large impact on overall transportation costs and profitability. North Karelia did have some dependency on biomass for energy production in district heating. Over the past few years Finland has been phasing out peat as an energy source due to environmental concerns, but domestic peat is now viewed as an alternative to Russian wood chips, at least temporarily (YLE, 2022). Overcoming  energy security risks will require a rapid implementation of clean energy strategies, and deployment of mature technologies (wind, solar, storage, heat pumps).

The Saimaa canal can officially still be used to transport goods, but in the current volatile political situation, few ship owners are taking the risk to transport goods along the route. This has a major impact on the export possibilities for companies in North Karelia. The Karjalainen newspaper in an article (2022) estimated that 10 million kilometres of additional truck transports would need to be driven due to closure of the canal. Road transportation being much more expensive than water transport, will also impact the profitability and ultimately the competitive position of producers in the region.

The rapid shifts in trade caused by the sanctions will have profound implications for Finland and Russia, and especially for regions with close links to the Russian market, such as North Karelia. It is unclear what their full effect will be, which will depend on the agility of the sector to find new sources for raw material and new markets for outputs. One thing is clear: The response to sanctions must be embedded in the transformation of energy systems – so that local business can make the leap away from fossil fuels and towards clean energy technologies.


Karjalainen, 4/9/2022. Saimaan kanavan sulkeminen iso isku Itä-Suomelle – lastien kuljettaminen rekoilla tulee hyvin kalliiksi. [The closure of the Saimaa canal is a big blow to Eastern Finland – transporting cargo by truck will be very expensive] ULR:
YLE NEWS, 22/3/2022. Minister: Finland must wean itself off dependence on Russian energy. URL:
Statistics Finland, 2021. Energy in Finland. ISBN 978–952–244–679–4


This blogpost presents summary results of a survey amongst North Karelian forest-sector entrepreneurs, amended with information from various clarified sources. By no means does it represent an opinion of the authors or of the organizations to which they are affiliated.

Suggested reference: Van Brusselen, J., Mosley, F. (2022). Impacts on forest-sector businesses in Finnish North Karelia from the war in Ukraine. Blogpost on