Generating competitiveness through interfirm co-operation: the forest industry of South Karelia and small and medium size subcontracting companies

• Main Authors: Karhu, Esa Kristian, Laine, Kalle, Ahola, Jyrki, Kotonen, Ulla
• Format: Conference Object
• Language: English
• Published: Louvain-la-Neuve: European Regional Science Association (ERSA) 2002
• Subjects: ddc:330; karelia*
• Online Access: http://hdl.handle.net/10419/115673

After the depression in the beginning of 1990's the regional development has been unequal in Finland, favouring some rapidly growing growth centres. The motors of the development in these centres have essentially been universities and IT-firms. At the same time when IT-based regions have been very successful many of the more traditionally oriented production areas have had problems in ensuring economic growth and balanced development of the whole region. In South-Karelia (province which lies at the South-East border of Finland) the development of the whole region is heavily related to one economic branch, forest industry. This is due to the fact that South-Karelia and it's surroundings forms production area in which the production is (even in the world scale) most intensively focused on chemical forest industry. There are four major forest industry production plants in the area: Stora-Enso / Imatra Mills, UPM-Kymmene / Kaukas Mills, Metsä-Serla / Simpele Mills and Metsä-Botnina / Joutseno Mills. In South Karelia case it is very clear that large scale enterprises have a significant role in the balanced and comprehensive development of the whole province. This applies especially to the development of economical circumstances and smaller companies in the area, but also to other aspects of human life: social, cultural and political. When we look at the structure of the companies in the area, we can determine that the situation is very biased. There are large scale companies and small companies but almost none of the medium size companies. In these economical conditions it's very clear that there might be several barriers to develop successful and multilateral co-operation between the two company-clusters, which are formulated according to company size. One of the most important barriers between the two parties is the capacity of production: The differences in production capacities hinders companies ability to develop interfirm co-operation. This study focuses on two central concepts, interfirm co-operation and ...