Indicator 6.5.3 - Investment in forest research, timber products industry research and development, and education
core indicator


Science and technology (S&T) plays a pivotal role in a sustainable forest sector. Through research and development (R&D) and innovation, new technologies are developed and introduced, resource management improved, new products developed, and manufacturing processes enhanced. Ultimately, innovation-the application of science, management, and governance- effectively multiplies the power of human creativity allowing society to increase the value of resources over time. R&D and education are important as they produce the leading edge knowledge that together with public involvement continually improves forest management standards and guidelines against which performance is measured. So improved R&D will result in better standards and improved performance. This indicator therefore complements Indicator 6.5.4, which deals with incorporating new knowledge into guidelines and standards related to ecological issues, and Indicators 3.1 and 3.2, which deal with compliance with guidelines and standards.

Industry, the federal and provincial governments, universities, and research institutes play an important role in forest sector S&T in Canada. However, the funding for forest sector S&T is supplied mostly by governments and industry. Between 1996 and 2001, annual federal and provincial government S&T investments averaged about $115 million and $93 million, respectively. Industry S&T investments averaged about $208 million during the same period (Figure 6.5a). Federal and provincial government investments in forest sector research are concentrated in the area of sylviculture and other forestry research. Industry, on the other hand, tends to concentrate its forest sector investments in research on forest products. Between 1996 and 2001, industrial investments in sylviculture and other forestry research averaged around $14.5 million per year. During this time industrial wood products research has increased steadily. The most significant jump in investments in forest products research has occurred in pulp and paper, where investment rose from $125 million in 1996 to $254 million in 2001.



Figure 6.5a Forest-related investment in science and technology. (Sources: Statistics Canada 2001, 2003, 2004)

A significant amount of innovation enters into the forest sector through technology suppliers and service providers. These suppliers perform R&D on behalf of the forest sector that becomes embedded knowledge in their technologies and services sold to the sector.

In 1999, the forest sector purchased $2.8 billion of innovation in knowledge-embedded machinery and equipment. On the basis of information from Statistics Canada, it has been calculated that selected service industries contributed $4.8 billion in innovation to the forest sector in 1999 (Figure 6.5b). In terms of innovation, the sector is primarily a process innovator rather than a product innovator. Its output in terms of innovation to domestic and world markets and society has yet to be determined.



Figure 6.5b Flow of S&T and innovation in the forest sector. *Calculated on the basis of the 1999 Statistics Canada input/output tables for the forest sector, assuming that 10% of the total value of products/services sold to the forest sector was innovative input from those selected service industries surveyed in the 2003 Statistics Canada Survey of Innovation; SFM: sustainable forest management. (Source: Watts and Kozak 2000)

Accurate and standardized reporting of S&T and R&D expenditures by governments, industry, and academia remains a challenge. The lack of understanding of internationally developed and accepted definitions of R&D such as those of the Organization for Economic Cooperation and Development has been an impediment to progress in this area. What constitutes R&D continues to be an issue, as governments use international terminology whereas industry defines its R&D more broadly, resulting in a discrepancy in R&D figures between government and industry. The tracking and reporting of R&D that take place on behalf of the sector by dedicated technology and service providers have been other challenges. The forest sector's suppliers are fragmented and difficult to track, in stark contrast to new economy sectors that have consolidated their technology and service providers. These issues have lead to an inaccurate representation of the R&D investments in forestry that makes attracting new investment and highly qualified personnel more challenging for the sector.

Education and skill development are integral to sustainable forest management. Skilled professionals in the forest sector play a leading role in managing the resource, and in product development and process improvements.

There has been a steady increase in demand for forestry professionals. A recent study commissioned by the Canadian Council of Forest Ministers (National Employer Demand Survey for Foresters and Forestry Technicians)⁷ estimated that the demand for foresters is expected to increase by 3% over the next five years as professionals now serving in this capacity retire. While demand for forestry professionals has been increasing, enrolment in relevant postsecondary programs has declined by 30% (1998-2003). A shortage of forestry professionals would be a major concern, as it would jeopardize the sustainability of Canada's forests. Recognizing this, the Canadian Council of Forest Ministers is working with academic institutions to promote professional careers in forestry at the postsecondary level.

Although the enrolment in forestry programs has recently declined, the overall education and skill level of the labor force in the forest industries increased between 1996 and 2001 (Figure 6.5c). In 2001, 33.6% of the forestry and logging labor force had a postsecondary diploma or degree, compared with 31.2% in 1996. Similar trends are found in the pulp and paper, wood, and furniture manufacturing industries. Over the study period, the percentage of jobs that require higher skill levels has also increased.



Figure 6.5c Education level of employees in four forest industries.

In the fall of 2003, a bold new initiative was created to address the many issues that challenge the forest sector. The Canadian Forest Innovation Council, an entity composed of high-level representatives from the provincial and federal governments and industry, is developing new ways to coordinate and fund innovation in the forest sector that will allow it to meet its present and future challenges, including those presented in this report.

⁷ Canadian Council of Forest Ministers, Deputies Committee, March 25, 2004.