Rethinking Service Logics in Forest-based Bioeconomy 211015.pdf · BECOTEPS (2011). The European Bioeconomy in 2030: Delivering Sustainable Growth by Addressing the Grand Societal

UEF // University of Eastern Finland

Towards a Sustainable Bioeconomy – Innovative Methods and Solutions for the Agriculture and Forest Sectors

CASTLE Conference, October 21, 2015 Session 6: Economic and social challenges for the bioeconomy

Päivi Pelli

Rethinking Service Logics

in Forest-based Bioeconomy


Rethinking Service Logics in Forest-based Bioeconomy

Research questions

1) How are services taken on board in the bioeconomy strategies and the forest-based sector strategies and programmes at European level?

2) What kind of service logics do the strategies represent?

3) [How are services understood at company level, and what kind of developments are underway]

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I. Conceptual framework

II. Data and methods

III. Results of the document analysis

IV. Discussion on Service logics

Structure of the presentation

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Three angles to how services are taken on board in strategies:

1) services activities to support and provide input to production

tesenergyfacade.com




2) services outputs to extend and add on the physical products

www.e2b-ei.eu/




2) services outputs to extend and add on the physical products, and

3) service as process to define and (co)create value.

www.vauban.de


Conceptual framework 1: services and service



2) services outputs to extend and add on the physical products, and

3) service as process to define and (co)create value.

Manufacturing logic (studies by e.g. Vandermerwe and Rada, 1988; Oliva and Kallenberg, 2003)

Service (dominant) logic (e.g. Grönroos, 1990; Håkansson and Snehota, 1989; Vargo and Lusch, 2004; 2008)

Changes in how value is defined, created and distributed/shared


Conceptual framework 2: service logics

Service-Dominant Logic (Vargo and Lusch, 2004; 2008; Lusch and Vargo, 2014) as an analytical framework to assess what is the service logics:

Goods-Dominant Logic Service-Dominant Logic

What is exchanged? Goods and services - Service

What is the role of key actors?

Producer / service provider is the active contributor

- Producer and customer / user, beneficiary is an active contributor

What resources are described decisive in value creation?

Resources are assets (possessing)

- Resources become in interaction (sharing)

How markets are defined?

Markets á priori / out there - Markets are created, institutionalized


Data sources: bioeconomy strategies and forest-based sector

strategies and programmes at European level

UEF // University of Eastern Finland 20.10.2015 10

Document analysis results 1

Services activities:

Support Services

services business

Service outputs:

services embedded

in product

EU bioeconomy strategy (incl. bio-

economy ETPs; PPP BBI, EIP AGRI)

x x

EU forest strategy (incl. F-BI);

UNECE/FAO; FE

x (x)

Forest-based sector (FTP, CEPI) x (x) (x) x

Other European Innovation

Partnerships, public-private

partnerships (SPIRE, E2B, EFFRA…)

x x (x) x

How services are taken on board in the bioeconomy strategies and the forest-based sector strategies and programmes at European level?


Document analysis results 2

•What is exchanged: biomass, products (processes)

•What roles: supply-chain view with value added to products through the successive stages; knowledge-base in production; triple helix

•What resources crucial: biomass and renewable materials; knowledge base,

new technologies, skills

•How markets are defined: markets “out there”; new markets supported with

creation of market conditions

I.e. customers and users are not perceived as value co-creators but remain passive recipients for the company value propositions; also innovation is linear and incremental mainly.

What kind of service logics the strategies represent?

UEF // University of Eastern Finland 12

x 20 x 4+

Emerging services in value-added chains

Move downstream in the value chain

Add services to the physical product

Improve resource efficiency Optimize supply chain

Acquire assets in R&D, design, IPR, brand…

Extend the product with maintenance, after sales etc. services

with knowledge-intensive services

Higher value-added products and services

More efficiency


Emerging value co-creation in a systems view

x 20 x 4+

EXAMPLE new forest owners: learn about logics of the next-generation forest owners

EXAMPLE brand owners: learn about logics in the use industries

Service as process: Value co-creation in interactions by integration of resources with customers, users, beneficiaries and wider stakeholder network.


To conclude

1. Bioeconomy strategies at EU level

– Main focus on biomass

– Services are in the radar of other forest-based sector partnership.

– Biomass-producing sectors: service to society

2. Service logics

– Linear value chains perspective: services as a means to process

optimization and efficiency – BUT need to look with a wider horizon on technological change and its impact on operations at all levels (use)

– Systems view: service as process to rethink value creation, allow ambiguity

which may also lead to radical innovation, new uses and ways of operating – BUT need to include natural ecosystems (public good)


Thank you! [email protected]

References

Bettis, R.A., Prahalad, C.K. (1995) The Dominant Logic: Retrospective and Extension. Strategic Management Journal, 16(1), 5-14

Grönroos, C. (1990) Relationship approach to marketing in service contexts: The marketing and organizational behavior interface. Journal of Business Research, 20(1), 3-11.

Håkansson, H., Snehota, I. (1989) No business is an island: The network concept of business strategy. Scandinavian Journal of Management. 5(3), 187-200

Hetemäki L., Hänninen, R., 2013. The economic impact of the Finnish forest-based sector now and in the future. The Finnish Economic Journal. 2/2013, 191-208. (In Finnish)

Hetemäki (ed.) (2014) Future of the European Forest-Based Sector: Structural Changes Towards Bioeconomy. What Science Can Tell Us 6, 2014. European Forest Institute.

Lusch, R.F., Vargo, S.L. (2014) ServiceDominant Logic: Premises, Perspectives, Possibilities. Cambridge University Press: Cambridge, U.K. 225 p.

Näyhä, A., Pelli, P., Hetemäki L. (2014) Forest-based services outlook in Hetemäki, L. (Ed.) (2014) Future of the European Forest-Based Sector: Structural Changes Towards Bioeconomy. What Science Can Tell Us 6, 2014.

Näyhä, A., Pelli, P., Hetemäki L. (2015) Services in the forest-based sector – unexplored futures, Foresight, 17 (4), 378-398.

Normann, R. (2001) Reframing Business: When the Map Changes the Landscape. John Wiley and Sons.

Normann, R., Ramírez, R. (1993) From value chain to value constellation: Designing interactive strategy. Harvard Business Review. 71(4), 65-77.

Oliva, R., Kallenberg, R. (2003) Managing the transition from products to services. International Journal of Service Industry Management 14(2): 160-172.

Prahalad, C.K. (2004) The Blinders of Dominant Logic. Long Range Planning 37 (2004), 171-179

Toppinen A., Wan M., Lähtinen K. (2013) Strategic orientations in the global forest sector. p. 405-428 In: Hansen, E., Panwar, R. and Vlosky, R. (ed.) “The Global Forest Sector: Changes, Practices, and Prospects”. CRC Press.

Vandermerwe, S., Rada, J., 1988. Servitization of business: Adding value by adding services. European Management Journal. 6(4), 314-324.

Vargo, S.L., Lusch, R.F., 2004. Evolving to a new dominant logic for marketing. Journal of Marketing. 68, 1-17.

Vargo, S.L., Lusch, R.F., 2008. Servicedominant logic: Continuing the evolution. Journal of the Academy of Marketing Science. 36(1), 1-10.

Vargo, S.L., Lusch, R.F., 2011. It's all B2B .... and beyond: Toward a systems perspective of the market. Industrial Marketing Management. 40, 181-187.

20.10.2015 For further information: paivi.pelli @ uef.fi

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Reviewed documents

EU bioeconomy strategy and action plan:

EC (2002) Life Sciences and Biotechnology: A strategy for Europe (COM (2002)27).

EC (2005) New perspectives on the Knowledge-Based Bio-economy. Conference report.

EC (2009) Taking bio-based from promise to market. Measures to promote the market introduction of innovative bio-based products.

EC (2010) The Knowledge-Based Bio-Economy (KBBE) in Europe: Achievements and challenges. Conference report.

EC (2011) Bio-based Economy for Europe: State of Play and Future Potential—Parts 1 and 2.

EC (2012) Innovating for Sustainable Growth: A Bioeconomy for Europe (COM(2012) 60).

EC (2012) Staff Working Document Accompanying the Document Innovating for Sustainable Growth: A Bioeconomy for Europe. Brussels, 2012.

EC (2014) Where next for the European bioeconomy? The latest thinking from the European Bioeconomy Panel and the Standing Committee on Agricultural Research Strategic Working Group (SCAR).

European Parliament (2013) Report on innovating for sustainable growth: a bioeconomy for Europe.

CoR (2013) Opinion of the Committee of the Regions on ‘Innovating for sustainable growth: a bioeconomy for Europe’ (2013/C 17/09).

German Presidency (2007) En Route to the Knowledge-Based Bio-Economy; German Presidency of the Council of the European Union.

Forest-based sector at European level:

CEPI (2011) Unfolding the future - The Forest Fibre Industry 2050 Roadmap to a low-carbon bio-economy.

EC (2013) A new EU forest strategy: for forests and the forest-based sector. (COM(2013) 659) with Staff Working Document (SWD(2013) 342) and

A Blueprint for the EU forest-based industries (SWD(2013) 343)

FOREST EUROPE (2011) European Forests targets 2020. Oslo Ministerial conference decision.

FOREST EUROPE (2014) Green Economy and Social Aspects of Sustainable Forest Management. Workshop report, 2014.

FTP (2005) Vision 2030. Innovative and sustainable use of forest resources. A Technology Platform initiative by the European Forest-based Sector.

FTP (2006) A Strategic Research Agenda for Innovation, Competitiveness and Quality of Life. with Annex: Extended Descriptions of Research Areas. Forest-based Sector Technology Platform.

FTP (2013) Horizons – Vision 2030 for the European forest-based sector. Renewed FTP Vision 2030. Forest-based Sector Technology Platform FTP.

FTP (2013) Revised FTP Strategic Research and Innovation Agenda for 2020 with Annex: Research and Innovation Areas.

UNECE/FAO (2014) Rovaniemi Action Plan for Forest sector in a green economy. UNECE/FAO Forestry and Timber Section. GENEVA TIMBER AND FOREST STUDY PAPER 35.

Cross-sectoral with reference to forest-based sector:

A.SPIRE asbl. (2013) Sustainable Process Industry through Resource and energy Efficiency Roadmap 2030.

BECOTEPS (2011). The European Bioeconomy in 2030: Delivering Sustainable Growth by Addressing the Grand Societal Challenges. Bio-Economy Technology Platforms BECOTEPS.

BIC (2012) The Bio-based Industries VISION: Accelerating innovation and market uptake of bio-based products. Bio-based Industries Consortium BIC. July 2012.

BIC (2013) Strategic Innovation and Research Agenda (SIRA) Bio-based and Renewable Industries for Development and Growth in Europe. A Public-Private Partnership on Bio-based Industries. Bio-based

Industries Consortium BIC. March 2013.

EC (2012) European Innovation Partnership (EIP) on Agricultural Productivity and Sustainability (COM(2012) 79)

EC (2012) European Innovation Partnership (EIP) on Raw Materials (COM(2012) 82)

EC (2012) European Innovation Partnership (EIP) on Water (COM(2012) 216)

EC (2013) Energy Efficient Buildings. Multi-annual roadmap for the contractual PPP under Horizon 2020 prepared by Energy Efficient Buildings (E2B) and European Construction Technology Platform

(ECTP). Directorate-General for Research and Innovation.

EC (2013) Factories of the future. Multi-annual roadmap for the contractual PPP under Horizon 2020 prepared by European Factories of the Future Research Association (EFFRA). Directorate-General for

Research and Innovation.

Star-COLIBRI (2011) Joint European Biorefinery Vision for 2030. Star-COLIBRI Strategic Targets for 2020 – Collaboration Initiative on Biorefineries.

Service-Dominant Logic SDL (Vargo and Lusch 2004; 2008; 2011; Lusch and Vargo 2014)

• Instead of linear value added chains – continuous configurations, de/re-configurations (Normann and Ramirez, 1993; Normann, 2001); value networks and systems

• Instead of value added in production – value co-produced with customer (Prahalad, 2004) / co-created with customers and beneficiaries

• Instead of resources as assets – primacy in knowledge and skills, integration of resources in interactions; resources become in use

• Instead of controlled and managed processes – adaptive systems (Bettis and Prahalad, 1995), creation and institutionalization of markets

Annex

Documents

Rethinking Service Logics in Forest-based Bioeconomy 211015.pdf · BECOTEPS (2011). The European Bioeconomy in 2030: Delivering Sustainable Growth by Addressing the Grand Societal