Understanding SME Success in the Value-added Forest Products Sector: Insights from British Columbia


  • Philip Grace University of British Columbia
  • Robert Kozak University of British Columbia
  • Harry Nelson University of British Columbia


Small and medium-sized enterprises (SMEs) in the value-added forest products sector play an important social and economic role in Canadian forest-dependent communities. In British Columbia (BC), the sector is not reaching its full potential. Many factors limit or enable growth of the value-added forest products sector in BC. This study seeks to assess what factors are most integral to success through an in-depth examination of four value-added forest product sector SMEs in rural BC representing four different types of firms with varying levels of performance. The results of the study indicate that, though factors typically considered vital such as access to skilled labour, fibre supply, location, and financial capital are integral to business success, business management skill and firm size are integral and often-overlooked factors. The results of this study point to a need for a better province-wide understanding of the barriers to success commonly faced by forest products SMEs, particularly barriers to management skill development.  


Addis, M. 2003. Basic skills and small business competitiveness: some conceptual considerations. Education + Training. 45:152-161.

Agrawal, A., B. Cashore, R. Hardin, G. Shepherd, C. Benson, and D. Miller. 2013. Economic contributions of forests. Forum on Forests. http://www.un.org/esa/forests/pdf/session_documents/unff10/EcoContrForests.pdf.

Arnold, J.E.M., C. Liedholm, D.Mead, and I.M. Townson. 1994. Structure and growth of small enterprises in the forest-products sector in southern and eastern Africa. Oxford, UK.

Beaver, G. 2003. Small business: success and failure. Strategic Change. 12:115-122.

Bierly, P.E., and P.S. Daly. 2007. Alternative knowledge strategies, competitive environment, and organizational performance in small manufacturing firms. Entrepeneurship Theory and Practice. 31(4):493-516.

Biggs, T. and M. Shah. 2006. African small and medium enterprises, networks and manufacturing performance. World Bank, Policy Research Working Paper 3855. Washington, DC.

Bogdanski, E.C., B. McBeath, and A. McBeath. 2015. Secondary manufacturing of solid wood products in British Columbia 2012: Structure, economic contribution, and changes since 1990. Information report BC-X-436. Natural Resources Canada, Canadian Forest Service, Pacific Forestry Centre, Victoria, British Columbia.

British Columbia Ministry of Forests, Lands and Natural Resource Operations. 2016. 2016/17 – 2018/19 service plan. Victoria: Ministry of Forests, Lands and Natural Resource Operations.

Burns, P. 2001. Entrepreneurship and small business. New York: Palgrave.

Coetzer, A., M. Battisti, T. Jurado, and C. Massey. 2011. The reality of management development in SMEs. Journal of Management & Organization. 17(3): 290–306.

Cohen, D., D. Delong, and R. Kozak. 2005. Can Canada be a global competitor in the secondary wood manufacturing sector? A current assessment of the Canadian secondary wood products sector in a global context. A report prepared for the Canadian Forest Service.

Creswell, J.W. 2007. Qualitative inquiry and research design: choosing among five approaches. 2nd ed. Thousand Oaks: Sage Publications.

Day, G.S., and R. Wensley. 1988. Assessing advantage: a framework for diagnosing competitive superiority. Journal of Marketing. 52(2):1–20.

DeLong, D.L., R.A. Kozak, and D.H. Cohen. 2007. Overview of the Canadian value-added wood products sector and the competitive factors that contribute to its success. Canadian Journal of Forest Research. 37(11):2211–2226.

Dixit, A.K., and J.E. Stiglitz. 1977. Monopolistic competition and optimum product diversity. The American Economic Review. 67(3):297–308.

Fisseha, Y. 1987. Basic features of rural small-scale forest-based processing enterprises in developing countries. In Food and Agricultural Organization (FAO) of the United Nations, Forestry Paper 79. Rome, Italy: Food and Agricultural Organization (FAO) of the United Nations.

Fitzsimmons, J.A., and M.J. Fitzsimmons. 2013. Service management: operations, strategy, information technology. 4th ed. New York: McGraw-Hill.

Greenlaw, C. and S. Brown-Welty. 2009. A comparison of web-based and paper-based survey methods: Testing assumptions of survey mode and response cost. Evaluation Review. 33(5):464-480.

Jo, M. 2000. Controlling social-desirability bias via method factors of direct and indirect questioning in structural equation models. Psychology & Marketing. 17(2):137-148.

Kozak, R.A. 2002. Internet Readiness and E-Business Adoption of Canadian Value-Added Wood Producers. The Forestry Chronicle. 78 (2): 296–305.

Kozak, R.A., T.C. Maness, and T. Caldecott. 2003. Solid wood supply impediments for secondary wood producers in British Columbia. The Forestry Chronicle. 79(6):1107-1120.

Libutti, L. 2000. Building competitive skills in small and medium-sized enterprises through innovation management techniques: overview of an Italian experience. Journal of Information Science. 26(6):413–419.

Macqueen, D. 2004. Associations of small and medium forest enterprise: An initial review of issues for local livelihoods and sustainability. International Institute for Environment and Development (IIED), Briefing Paper. London, UK.

Macqueen, D., S. Bose, S. Bukula, C. Kazoora, S. Ousman, N. Porro and H. Weyerhaeuser. 2006. Working together: forest-linked small and medium enterprise associations and collective action. International institute for environment and development (IIED), Gatekeeper series 125. London, UK.

Man, T.W.Y., T. Lau, and K.F. Chan. 2002. The competitiveness of small and medium enterprises: a conceptualization with Focus on Entrepreneurial Competencies. Journal of Business Venturing. 17:123–142.

McIlhenney, K., and R. Hayter. 2013. Sustaining jobs and environment? The value-added wood industry in Metro Vancouver, British Columbia. Local Environment. 19(6):605–625.

Nash, J.F. 1950. The bargaining problem. Economometrica. 18(2):155–162.

Nelson, H., N. Hotte, and R.A. Kozak. 2017. The changing socio-economic contributions of forestry. In Sustainable Forest Management: From Principles to Practice, edited by John L. Innes. Earthscan, Oxford, UK.

Nielsen, M. 2011. Developing Valued Added Forest Products Remains Source of Contention. Prince George Citizen, September 6. http://www.princegeorgecitizen.com/article/20110906/PRINCEGEORGE0101/3090 69986/developing-value-added-forest-products-remains-source-of-contention .

Niquidet, K., H. Nelson, and I. Vertinsky. 2007. Pricing the social contract in the British Columbian forest sector. Canadian Journal of Forest Research. 37(11): 79–100.

Parfitt, B. 2005. Getting more from our forests: Ten proposals for building stability in BC’s forestry communities. Canadian Centre for Policy Alternatives. Vancouver, BC.

Parfitt, B. 2011. Making the case for carbon focus and green jobs in BC’s forest industry. Canadian Centre for Policy Alternatives. Vancouver, BC.

Porter, M.E. 1980. Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.

Price Waterhouse. 1992. Performance of the value-added wood products industry in BC. FRDA Report. Vancouver, BC.

Randall, D.M. and M.F. Fernandes. 1991. The social desirability response bias in ethics research. Journal of Business Ethics. 10(11):805-817.

Research Universities’ Council of British Columbia (2012) Opportunity Agenda for BC.

Roxas, B. and V. Lindsay. 2011. Social desirability bias in survey research on sustainable development in small firms: An exploratory analysis of survey mode effect. Business Strategy and the Environment. 21:223-235.

Rubin, H.J. and I.S. Rubin. 1995. Qualitative Interviewing: The Art of Hearing Data. Los Angeles: Sage Publications.

Schultz, R. and A. Gorley. 2006. What is a value added forest sector? Why is it important to competitiveness in British Columbia? In BC forum on forest economics and policy 1-19.

Sloan, G.M. 1945. The forest resources of British Columbia. Victoria: Charles F. Banfield.

Stennes, B. and B. Wilson. 2008. Secondary manufacturing of solid wood products in British Columbia 2006: Structure, economic contribution and changes since 1990 (Vol 416). Pacific Forestry Centre

Wagner, R.H. 1988. Economic interdependence, bargaining power, and political influence. International Organization. 42(3):461-483.

Woodbridge, P. 2009. Opportunity BC 2020, BC’s forest industry: moving from a volume focus to a value perspective. Woodbridge Associates, prepared for The Business Council of BC. Vancouver, BC.

Yin, R.K. 2009. Case study research: design and methods. 4th ed. Thousand Oaks: Sage Publications.






Empirical Manuscripts