Innovate or expire

An invention is something totally new, whereas innovation is the extension or modification of an invention. 

Here is an illuminating example :  in 1860, Sir Joseph Wilson Swan invented the carbon filament, incandescent electric lamp, no such thing had previously existed, even in theory.  On 18 December 1878, eighteen years later, he demonstrated his proof of concept in a lecture to The Royal Chemical Society at Newcastle-upon-Tyne.  Through the application of Swan’s theory and improvements to the idea, Thomas Edison innovated, and lit up Wall Street at 15h00 on 4 September 1882, twenty-two years after the invention.  Swan invented and Edison innovated, yet strangely Edison is given the accolades as the inventor of the light bulb !

Only two activities move humanity and our markets forward in a substantive and productive manner.  I am not referring to ‘the love that makes the world go round’, the simple numerical growth of a population or to changes in demographics as these are really just ‘musical chairs’.  The two truly progressive activities are invention and innovation.  Consider the following fact : lignin and cellulose are the two most abundant organic polymers on Earth, and are the core building blocks of plants.  Is there a possibility that we could use our knowledge and skills of genetic engineering to make these two polymers even more user-friendly for humanity ?  Currently, lignin and cellulose are used in paper, bio-fuel production, as additives to oil and chemical products, and in the production of plastics and fibres.  Opportunities for invention and innovation are found in the challenging situations created by humans.  The ‘challenging situation’ that forms the basis of this note is : What else can we do with all these trees and their by-products ?

The objective of this note is to build the case for innovation in micro and small operators in the South African forestry sector.  No matter personal opinion, the forestry sector continues to face challenges.  Six of the most serious for the sector, include :

Water management – with current water and land usage, only a very small percentage of arable land is both suitable and available for plantations.  If Israel has been able to turn the Negev Desert into a garden, what excuse do we have ?

Fragile local market – the South African economy is not in the condition required to successfully expand and build the timber industry.  Niche export markets remain a viable option, open to even small operators.

Political imperatives – whatever the motivations, the call for ‘representivity’ in all its forms, continues to be directed at the industry.  Restrictive labour and trade union regimes remain problematic.

Collapse of rail infrastructure – the privatisation of the historical railways network would go a long way to reviving confidence in the forestry sector.  This remains the proverbial ‘elephant in the room’ even in Knysna !  Has enough attention been paid to sustained national, formal lobbying with regards to the privatisation of the rail network ?

Asset security – low levels of law enforcement, coupled with high levels of unemployment, place multi-billion rand assets at risk from arson, damage and theft.  Addressing this business risk adequately, adds significant costs to the end products.

Currency weakness – the sector is technology and capital intensive.  The weak ZAR has hamstrung the timber industry as the importing of state-of-the art technology is prohibitive to all but the mega-corporations.

With little hope of the above six and the many other serious challenges ever being addressed, my call to micro and small operators in the sector is to be more innovative in terms of the channels to market, processes employed, and outcomes generated.  There exists a significant opportunity for the establishment of a network of operators, who are limited by capacity and volume, to fill a niche that medium and large-scale timber businesses are unable to exploit.  The value-chain of such a network would comprise the following functions :

  • Contract / concession-driven mobile logging
  • Dedicated transport of cut and partially cleaned logs
  • Small scale milling and processing
  • Secure drying and storage
  • Branding, marketing and trading

Having approached operators in each of these discrete areas, I have heard it said numerous times :  I make my money from the logging, if only I didn’t also have to transport it, I would do much better !  OR  We run a sawmill here, but so much of our time is taken up with the marketing and selling of the timber that we never catch up with our workload.  My innovation of a network of functionally-integrated operators would take care of these challenges, freeing each operator to focus on their area of speciality and maximise the available profits.

Inventing and innovating are better ways to spend ones time than complaining and whining about how the ‘big boys’ squeeze out other operators.  If you cannot compete on volume, then compete on speed; if not on scope and scale – then compete on service; if you are unable to afford the latest technology, then offer the best prices in town; if size is not your game, focus on specialised sourcing.  These are only a few of the ways in which micro and small operators in the timber sector can compete against those multi-national businesses with market capitalisations in the billions.  A nimble, highly responsive, functionally integrated network of independent operators will go along way to addressing inefficiencies, duplications, and wasted focus on non-core functions.  Below is a link to an article that answers the question : “Why is innovation in the forestry industry so difficult ?”

https://www.fs.fed.us/pnw/pubs/pnw_gtr629.pdf

PJ Momsen

0823307184

info@southerncapecorridor.co.za

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