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Setting the industry's technology agenda: addressing the need for an industry commitment to innovation.

The forest, wood and paper industry is facing perhaps its greatest challenge. Consolidation an cost pressures have forced closure or downsizing of many industry R&D laboratories. Companies still funding internal R&D have reduced spending overall and are increasingly focused on product development and technical support to manufacturing. They are generally planning with shorter time horizons and are seeking more and better ways to leverage their internal technical resources. Enabling science and technology that can provide technically sound foundations for companies' own proprietary new product and new market development are being de-emphasized or even neglected. Suppliers on whom the industry has historically depended for its process innovation are fewer and less able to support new process development and innovation. Global trends and external factors (energy supply and cost dynamics, climate change, industrial globalization, capital intensity, demographic changes, continued environmentalism and threats from other industries) are providing ever increasing challenges as well a opportunities.

Yet, all of this is happening at a time when many basic technology areas--biotechnology, information technology, computing, computational modeling, separation technologies and a number of others--are advancing more rapidly than at any time in history. Technology is becoming increasingly important to a healthy future for the industry at a time when internal attention to R&D is diminishing. Leveraging and focusing the industry's technology resources must become a top priority for changing the basis of competition within the industry and, perhaps more importantly, between this industry and others that seek its markets. the cost of producing the industry's primary products is too high and innovative technologies that can significantly reduce the cost of manufacturing are essential. The industry's record of efficiently and effectively moving from concept to commercialization must be significantly improved. The industry needs to move to a new paradigm where the kind of innovation taken for granted in many other industries is also the norm for this one.

Breakthrough research may be the only means of achieving the major reductions in manufacturing costs and the foundations for industry renewal that are necessary to return to an exciting economic future. While breakthrough research inherently carries a higher risk than incremental research, superior returns are correlated with risk. Returns of no-risk investments fall to the cost of capital or worse--the very situation the industry is trying to overcome. A commitment to innovation and breakthrough technology is greatly needed and has been recognized by the industry's technical leaders and many of the industry's CEOs. This commitment is founded on the belief that the forest, wood and paper industry can significantly improve its competitive position by embracing the following concepts:

* that innovation is an essential element of long-term sustainability;

* that supporting investment in technology can not only significantly reduce manufacturing costs, but also enable individual companies to pursue progress in new and advanced product innovations;

* that a strong industry R&D program can become an important building block in changing the image of the industry to investors and to the public.

Figure 1 on page 66 illustrates why a company's technology strategy needs to include an effective approach to leveraging outside resources to complement its own internal research, development and demonstration (R, D&D) activities. Because the number of technologies and the amount of knowledge available to the industry are increasing rapidly, the box in the figure is getting larger. However, because of the reduced funding individual companies are able to commit to internal efforts, the volume of the box that is being filled by internal funding is shrinking. This makes the necessity of and the opportunity for outside leveraging more important than ever. The other point to be made by the figure is that Agenda 2020 has emerged as an effective model for focusing and leveraging outside R, D&D.



Agenda 2020 has emerged as the dominant and most promising mechanism for focusing the industry's technology, vision, setting the industry's pre-competitive technology agenda, and providing a substantive science and technology foundation for the industry's future and renewal. Established in 1994 at the encouragement of the U.S. Department of Energy, Agenda 2020 is an industry-university-government partnership designed to address key technology gaps of importance to the industry that are consistent with national goals. Its yearly funding has risen from about US$ 5 million in 1994 to nearly US$ 50 million in 2001. Agenda 2020's goal is to, "understand the high leverage, pre-competitive R&D and technology needs of the forest, wood and paper industry and provide guidance and resource mechanisms to maximize the efficiency and effectiveness by which these needs are successfully addressed, developed and deployed."

The Agenda 2020 CTO Committee plays a significant role in the operating model by which this goal is achieved. It is composed of the chief technology officers and other senior technology leaders of the member companies of the American Forest and Paper Association (AF&PA) as well as key representatives of the academic community and the Chair of the National Laboratory Coordinating Council. This committee provides the oversight and defines the drivers, needs, technology strategy and linkage to policy. It also sets priorities and gives focus to the program with the guidance of the various task groups reporting to it and seeks mechanisms to provide the resources for the resulting program. Many types of communities (R & D/technical, manufacturing/engineering, operating/company) are involved in the process of taking ideas from concept to commercial reality.

The current 2020 program contributes in several significant ways:

* by providing a common vision for communication with and the education of stakeholders and publics

* by enhancing the industry's ability to conduct research and implement new technology more cost effectively

* by providing leverage for an individual company's internal development efforts

* by improving an individual company's competitiveness through easy and early access to new technology.

Although Agenda 2020 has enjoyed considerable success, the significant changes to and pressures on the industry demanded that it become aligned with and focused on the highest leverage technology needs of the industry as defined by a CEO-supported technology strategy. It was the realization that a new and significantly more innovative outreach for ideas and knowledge was necessary that suggested the approach taken in organizing the Forest, Wood and Paper Industry/Technology Summit.


The Forest, Wood and Paper Industry Technology Summit, sponsored by TAPPI, AF&PA and the U. S. Department of Energy's Office of Industrial Technology, was held May 21-23, 2001, in Peachtree City, GA. An additional session focused on the wood products area was held in conjunction with the Wood Products Society meeting June 25 and 26 in Baltimore, MD. The Summit covered nine focus areas through 16 breakout sessions, all built around the elements of the Agenda 2020 technology strategy. The nine areas were: sustainable forest productivity, recycled materials, process automation, fiber engineering, significant process improvements/ breakthrough technologies, technologically advanced workforce, environmental performance, energy performance and new forest-based materials.

The Summit's sessions were carefully structured to include leading experts from the industry, supplier and service provider companies, government, and academia. Purposely included were people familiar with the industry, people not familiar with the industry but with applicable knowledge, people who think conceptually, applications people, operations people, engineers and constructors and in one session human resource people, educators and trainers.

In addition to the sessions that addressed specific technical topics, a group of 11 individuals with broad technical and managerial experience were asked to act as integrators. The objective was to seek out and record shared ideas and concerns, as well as opportunities to unite efforts, and to identify the major messages and thrusts that emerged from the other groups. The emphasis was on developing breakthrough rather than evolutionary approaches, utilizing "out-of-box" thinking, and bringing forward the ideas of researchers practicing novel technologies not currently used by the industry. The approach was bold, different and unique-but it worked.

The high-leverage goals and needs for each session area were developed by the CTO Committee of AF&PA prior to the meeting and presented to the attendees in the opening session. These goals aligned with the Agenda 2020 direction as reviewed with the Board of AF&PA in January 2000. Richard Phillips, senior vice president technology, International Paper; Steve Rogel, chairman and CEO, Weyerhaeuser; Pete Correll, chairman and CEO, Georgia-Pacific; and George Harad, chairman and CEO, Boise Cascade, provided video presentations that set the challenge for the meeting. Their messages reflected the belief that a strong, innovative, pre-competitive and collaborative technology program focused on breakthrough technologies is needed and essential. This is critical so that the forest, wood, and paper industry can achieve the following:

* maintain its competitiveness

* improve its capital effectiveness

* become an increasingly attractive place for the best and brightest people to work

* continue to provide the world with essential, innovative and environmentally compatible products from renewable and reusable raw materials.

A clear consensus of those attending the Summit is that it was highly significant and extremely successful. Significant technical and directional material was generated that is already affecting the direction of Agenda 2020. The large task of integrating this material into a business plan has begun and will be presented to the industry's CEOs for consensus and direction by December 2001.


Some of the conclusions reached by Summit attendees included the following:

* Technology must be viewed as an important investment by the industry's senior managers.

* Sticking to a well-conceived and supported technology strategy is essential.

* Value must be emphasized as much, or at times even more, than cost.

* Effective partnerships are necessary, including a partnership with government.

* The industry's competitiveness and attractiveness to investment will be significantly improved through deployment of breakthrough technologies.

* A new future for the industry must be developed by looking beyond the traditional products of wood, pulp and paper, and recognizing additional commercial opportunities in both new forest-based materials and manufacturing by-products.

* The way the industry is perceived, both internally and externally, will be positively changed with technology solutions that are economically and socially desirable.

* A world-leading workforce will be developed through new education initiatives.

* A faster deployment of technologies must be achieved by using new models to quickly transform knowledge into commercially successful products and processes. A point of strong concurrence was that the industry's issue is not the access to technology and knowledge, it is the commitment to use it and the speed with which it is deployed.

* The industry's access to innovation will be significantly expanded by including non-traditional sources for insight and knowledge to nurture breakthrough ideas.

* Biotechnology will be used to architect a new future for the industry, but will require rapid development of enabling technologies and social acceptance.

* More trees will be produced from less land for more diverse uses.

* The industry's unique renewable energy position will be used to contribute economic growth and will have a significant and positive impact on national energy and environmental goals.

* The desired and expected result of successfully executing a technology strategy addressing these elements will be an industry significantly more worthy of investment capital.


The logistics and execution of the Summit succeeded because of the exceptional skill, knowledge, dedication and professionalism of the TAPPI staff who provided support for the meeting. TAPPI was intimately involved from the early planning through the wrap up and will continue to contribute to the dissemination and utilization of the Summit results in the months ahead. The Association provided all but one of the break-out session facilitators, managed the conference logistics, enabled material from the sessions to be transcribed and available on a daily basis, and ensured that the essence and substance of the meeting was documented. TAPPI's continued involvement will make possible the communication of Summit result's through publications and conferences so that the information and directions generated will reach the largest possible audience in the most efficient way.

The involvement of staff was not the only contribution made by TAPPI. Seven members of the Board of Directors attended and significantly contributed to the Summit results. Membership in TAPPI was not a requirement in selecting attendees. However, of the 147 participants, 79 were TAPPI members.

Why was this Technology Summit important to the mission of TAPPI? The forest, wood and paper industry is undergoing change at an unprecedented rate. This change impacts the industry's structure, its products, its license to do business, its public image, its financial sustainability, its technology, and its employees. A significant part of TAPPI's strategic focus is on sharing technical information and knowledge, training and education, promoting research, and providing a forum for members to network, to learn and to share experiences. All of these elements of TAPPI's mission are essential elements to the success of Agenda 2020 and how the Summit results are utilized to set a sustainable direction for the industry through the development and deployment of new and exciting technology. The tools TAPPI has for communicating with and providing value to its members are the tools needed to bring new, fresh ideas to the industry from the members and provide new knowledge, education, training, and information about opportunities to the members. The Agenda 2020 CTO Committee sees a close working relationship with TAPPI as a very important part of the program's success.


The planning and execution of the Technology Summit was hard and rewarding work, but the most difficult and most rewarding work has just begun. The material generated at the Summit is being developed into both a business plan to chart the future course of Agenda 2020 and a Summit report for publication and use by the large number of individuals and R, D&D teams that will ultimately determine the value of the Agenda 2020 vision and road map and its contribution to the success and sustainability of the industry itself. Both the business plan and the Summit documentation are expected to be completed by the end of this year. A series of articles and papers at conferences will deal with the technical and direction-setting substance of the Summit in the months ahead.

The Forest, Wood and Paper Industry Technology Summit was extremely successful. The results of the conference and the efforts currently underway that are utilizing the material generated will provide the direction for an effective industry led public/private partnership for many years to come. The vision of this partnership will come to life only through the support and involvement of many groups and communities. TAPPI, appropriately, will be a major player in fulfilling this vision.

* This is the first in a series of reports from the Forest, Wood and Paper Industry Technology Summit held May 21-23, 2001 in Peachtree City, Georgia, USA.

Delmar Raymond is director, stratagic energy alternatives, at Weyerhaeuser Company in Tacoma, Washington, USA and chairs the AF&PA Agenda 2020 CTO Committee: email
COPYRIGHT 2001 Paper Industry Management Association
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Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Innovation
Author:Raymond, Delmar R.
Publication:Solutions - for People, Processes and Paper
Date:Sep 1, 2001
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