4. DISCUSSION AND CONCLUSIONS
4.3 Limitations of this research and conclusions
This thesis focused on the transition towards service-orientation in Finnish forestry service markets with a comparison to Sweden in one of the substudies. Because the focus was on the currently dominating organizations in the market, by using the categorization by Hetemäki and Hänninen (2013) the services that were studied covered mostly forestry-related services did not deal with most of the potential of new forest-related services. Conceptually, also the group of forest-related services is essential as the premises of this research cover a full range of the services offered to NIPF owners. However, their role in this research is limited because to a large extent the dominating service organizations did not recognize these as a part of their service offerings.
The research started from trying to understand the market change from the service provider’s point of view by interviewing a limited sample of service organizations in the market. However, while trying to understand the changes in the market-level more general level, it became challenging to create a sharp picture of each organization category. As can be seen in Figure 3, the important information service providers (FMAs and the forest centres) have been forced to change their business models. During the institutional change, FMAs have started to profile themselves slightly more as organizations serving forest owners than only emphasizing forest management. The Finnish Forest Centre seems to have more difficulties in profiling itself as its business unit is basically a new competitor to the established markets of forest management and the wood trade. The public services unit has a better situation and it has potential to become a link between the forest owners and service
provider by further developing the service market place (metsään.fi). However, it seems that the business model of the service is not clear yet and there are potential competitors with more flexible business models. However, the service market place offered by the Finnish Forest Centre became free for forest owners at the beginning of 2015 and now has potential to become large enough also to become interesting to new service providers. If the development of the business model will now actively concentrate on helping service providers to be connected with forest owners, there are possibilities to succeed. For instance, by offering tools for property administration companies such as banks and insurance companies to connect forest inventory information as a part of their service portfolio, it might be possible to activate groups of urbanized, highly educated, and female owners.
Due to the somewhat high sensitivity of the market-related questions to many of our service provider interviewees, it is likely that some of their assessments were rather subjective and even sentimental. A limitation to this research at the actor level was that is rather general and does not go very deep into the business models of the service providers.
Moreover, there could have been more interviews per organization because a single interviewee does not necessarily sufficiently well represent the whole organization or group of actors (e.g. large-scale forest industry, FMAs). However, this potential inaccuracy was partially fixed by using the snowball sampling technique and asking about other players in the markets. This helped to create a more multifaceted picture of each actor. Even though the interview data could have been more comprehensive, the data were found to be sufficient from a methodological saturation point of view and thus provided a sufficient basis for a) building a coherent description of forestry service markets and b) for identifying the challenges related to the renewal. In contrast, the approach to the customer side of the markets was quantitative and consisted of both private and municipal owners. Even though the studies were separate and the results are not directly comparable with each other, this approach gave a more comprehensive picture of the forest owners’ view of the markets.
Thus, even though the qualitative interviews were only able to give some examples of how the service providers see the market-level transition, interesting examples of a keen business orientation were found. This provides a good basis for discussing the state of these markets from the theoretical perspective of service-dominant logic. On this theoretical level, it is appealing to bind the concepts of ecosystem services and service-dominant logic together and see forest owners as dynamic resources with the ability to refine versatile value-creation potential from forests as described by ecosystem services. The current difficulties that forestry service organizations have in understanding this new potential may lie in the
differences in the way they see value creation especially compared with some of the new groups of forest owners (well-educated, urban, independent of timber sales income).
In categorizing Finnish forestry service market transformation paths on the basis of MLP (Figure 8), it seems evident that the development does not originate from any shock on the landscape level (P2) nor a technical breakthrough substituting the old system (P3). The market is reproducing itself as forest policy is developed inside the regime level mostly by the dominating organizations (P0). However, the regime level in this case is not stable. Under financial realignments, the partly publicly financed organizations are being forced to restructure their business models and the basis for operating in the markets. Moreover, the requirement for allowing more freedom in competition is based on European Union level regulation that is on the landscape level. Further, the original complaint against the dominant players for the lack of competition was drawn up by a single forest owner (e.g. Kasanen 2011), e.g. by a niche-level actor. The demand for increasing freedom of choice for forest owners in their decision-making is also connected with the landscape level expansion and availability of information. MLP definition for transformation path P1 is therefore defined by disruptive landscape pressures and not sufficiently developed niche-innovations connected to regime-level actors modifying the direction of development (Geels and Schot 2007).
Figure 8. The adaptation of the multi-level perspective to transition in the context of Finnish forestry service markets (adopted from Geels and Schot 2007;1Article I;2Article II;3Article III;4Article IV;5Näyhä et al. 2015)
In conclusion, Finnish forestry service markets seem to follow the transformation path P1, which means that the eventual change may not be very fundamental nor be quickly taken up. Consequently, the existing regime-level actors are also adapting to the gradual change and are able to maintain their dominating position as long as there are now new players outside the traditional market scope. This interpretation is supported by the finding of Article II that one of the key factors hindering the development - in both Finland and Sweden - is related to the market structure lacking dynamic, regime level actors with a culture of co-operative networking with niche-level actors. This structure results in the dominating regime-level in resisting the external pressures that are not in line with their current business models.
However, an external actor able to see the resources such as forest owners in a fundamentally new way may be able to break the dominant regime-level.
As pointed out, there are external pressures, such as climate change, the growing complexity of the business operation environment, changing consumer demands and values, service-dominant logic as marketing paradigm change, digitalization, lowering costs of
communication and information delivery, increasing competition for raw materials, bio-economy, energy policies, and end-use of wood, ecosystem services evaluation, and changing consumer demands and values (Figure 8) which might enforce development paths beyond the control of the existing actors. Because the actors in the Finnish market are concentrating on securing their market share rather than building any lively business ecosystem, there have not been many networking partners available for niche-level innovators. This market structure has been hindering the transition and business models based e.g. on cumulative customer information, the restructuring of education and extension, service markets for ecosystem services besides timber production. However, in order to maintain the current position without losing too many forest owners as customers, the dominating regime level has to be able to cope with the external pressures of renewal. Some adaptation has been seen:
the rapid technical development in forest inventory information has been developed and adopted by regime-level players. However, it is likely that business models of a totally new kind or logics to serve forest owners will be seen before a new dynamic equilibrium defined by Rotmans et al. (2001) is reached.
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