Finnish forest-based companies in transition to the circular bioeconomy - drivers, organizational resources and innovations

Abstract Forest-based businesses are the center of the transition to the sustainable and competitive circular bioeconomy in Finland. This study explores the transition of Finnish FBS firms to new business models, with a focus on the organizational resources and capabilities needed for transition. It also identifies the important elements in the business environment and the role of innovations in this process. The study uses thematic interviews with managers from various FBS firms and companies from interfacing sectors, all of which have operations in Finland. Despite the differences between firms, the study finds many common drivers and resources that FBS companies highlight as significant in the transition. The study results indicate that intangible and human resources are essential for the transition. An innovative, agile, flexible and encouraging organizational culture is a crucial resource. The culture should be supported by non-hierarchical top management and inspiring employees (so-called power people). Communication and marketing skills, and innovations developed by teams with diverse knowledge are essential. To successfully manage the transition, companies need a deep understanding of what the markets and society require, and they must develop long-term competiveness through future-oriented strategic thinking. Pursuing sustainability and innovativeness in internal as well as external organizational environment are essential factors. The study presents insights for the researcher community and many societal actors as well as recommendations for the FBS companies to facilitate the transition to new circular bioeconomy businesses. It also contributes to the resource-based perspectives literature, particularly the dynamic capabilities approach.