Industrial restructuring, spatio-temporal fixes and the financialization of the North European forest industry

Abstract

Departing from the Regulation Approach and the concept of spatio-temporal fixes, this article analyses how different mechanisms of financialization have ameliorated and accelerated crisis-tendencies in the North European forest industry and its implications for labour, suppliers and corporate R&D. Although wood products can potentially ameliorate the climate crisis by substituting plastics, petrochemicals, polyester and various other applications from fossils, firms have been slow to advance into these higher value-added segments. Instead, under an increasingly financialized accumulation regime, innovation has been undermined through R&D downsizing while dividends have been increased to shareholders at labour’s expense. Meanwhile, amid ultra-low interest rates, the industry’s profitability has been supported by appreciating forest assets that are increasingly treated as a new financial asset class by the financial sector. Evidently, while some mechanisms of financialization are detrimental to firms, the financialization of forests has constituted a profitability-enhancing socioecological fix (McCarthy, 2015; Ekers & Prudham, 2017) not only for financial capital (Ekers, 2019) but also for non-financial firms themselves. In the long run, however, it is highly uncertain if forest asset prices can be kept from depreciating amid the problems of profitability, weakened ecological carrying capacity, rising interest rates and strained supplier relations.

The spatial politics of depoliticization: Visionary planning, bioeconomy, and forest capital

“…Pressure has increased to pivot from the pulp and paper focus to new production models, and the bioeconomy has emerged as one such possibility for renewing the forest industry (Ahlqvist & Sirviö 2019;Näyhä 2019Näyhä , 2020. The financialization of the northern European forest industry, the appreciation of forest land in nominal value (Skyrman 2022), and the intensification of extraction (Kellokumpu & Säynäjäkangas 2022) has kept the industry's profitability afloat in recent decades. The bioeconomy presents a new socioecological fix (Ekers 2015;Ekers & Prudham 2015 through which new fixed capital can be formed in biorefineries, and the forest industry can pivot from slow crisis mode to building a new growth model.…”

In-between Environmental Sustainability and Economic Viability: An Analysis of the State, Regulations, and Future of Italian Forestry Sector

“…The way in which the wood-furniture economic supply chain will respond to the increasingly volatile and unpredictable dynamics of the procurement of wood material [6] depends on the results of forest management at multiple scales of intervention (from local to national, from European to global). This will give further value to sustainable varieties, adapting the production mix to the multiple market needs, responding indirectly to the social and environmental needs of local communities, and including key aspects for a complete transition to circular economies [25][26][27][28][29][30][31][32][33][34]. The analysis of such complex transitions reflects the resilience potential of the wood-furniture supply chain in Europe, better delineating the contribution of forestry to sustainable productions and, broadly speaking, to the quality of forest ecosystems [35][36][37][38][39][40].…”

Working in (Slow) Progress: Socio-Environmental and Economic Dynamics in the Forestry Sector and the Contribution to Sustainable Development in Europe

“…In addition to the economic benefits directly generated by forestry, wood remains a vital input in the manufacturing industry, also retaining significant uses as a source of energy, likely growing in the current geopolitical scenario [2,40]. This appears to be a positive aspect on the one hand, given the forest heritage, even if it is considered negative on the other hand, being potentially in competition with uses of wood with higher manufacturing added value.…”