The doctoral dissertations of the former Helsinki University of Technology (TKK) and Aalto University Schools of Technology (CHEM, ELEC, ENG, SCI) published in electronic format are available in the electronic publications archive of Aalto University - Aaltodoc.
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Interaction of R&D and Business Development in the Wood Products Industry, Case Kerto®– Laminated Veneer Lumber (LVL)

Matti Kairi

Dissertation for the degree of Doctor of Science in Technology to be presented with due permission of the Department of Forest Products Technology for public examination and debate in Auditorium V1 at Helsinki University of Technology (Espoo, Finland) on the 31st of May, 2005, at 12 noon.

Dissertation in PDF format (ISBN 951-22-7706-9)   [3349 KB]
Dissertation is also available in print (ISBN 951-22-7705-0)

Abstract

In this study I have examined the problems and successes involved in the development of a wood products industry innovation, Kerto-LVL, starting from the product idea and proceeding through various phases until its breakthrough in international markets. The main research question in this study is: How to develop a new structural product in the wood products industry, when it is not just an improvement or substitute for an existing one, and what kind of interactions between business and R&D are necessary in order for the cooperation to function smoothly and lead to a profitable business. In the early stages of the development process a product is in the solution market.

The selected method used in this study is action research, concentrating on one product and its business development as a case study. I have selected various concepts to describe the position of Kerto-LVL in the market at different stages in its development. To explain the interaction between R&D and business development I have set out to define a number of hypotheses.

I have divided the development process into three stages: the pilot plant, industrial and breakthrough stage, which illustrate the focus of the Kerto team's operations at certain periods in time. At the end of each chapter describing a particular stage, I evaluate how the content of the selected concepts developed during this time. As a result, six hypotheses emerge. The first three define the prerequisites for a successful development process at a general level and the hypotheses 4 to 6 describe the structure of the operations themselves:

  1. Commitment as a dynamically changing process.
  2. Starting the change in operating practice.
  3. Autonomy requirement for a developing business idea.
  4. Formation of innovation structure and partnership.
  5. Partnering leads to a merging of business ideas and strategies on the solution market.
  6. Contents of the 100% product and its operating system.

The prerequisite hypotheses were extended from the definitions given in existing literature on business development and R&D. This was necessary because the precise interaction between R&D and business has not been analysed in previous research. Hypotheses 4 to 6 significantly add to the understanding of the interactive relationship between the innovation structure and partnership, set up to develop a new product.

In addition to the hypotheses, in this study I have also developed the content of the selected concepts further to describe in greater detail the dynamic change that is closely linked to a new wood product's development process. The manufacturer of the product, R&D and customer need to work together to create a connection between the technology push and the market pull. Moving up to a higher position in the value chain requires more and more market input and most often higher value chain, partnerships and expertise.

In my opinion, further research is needed to gain a better understanding of the interdependence between the given concepts at different stages of the development process. The key technology model showed its profit-creating capacity and performance, and therefore offers a lot of potential for further research.

Keywords: value chain, innovation structure, operating system, 100 % product, stratified product concept, solution market, partnership, LVL

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© 2005 Helsinki University of Technology

Last update 2011-05-26