Companies’ innovation approaches and barriers towards achieving their potential in the forest-based bioeconomy

The forest-based bioeconomy offers significant business opportunities for rural regions like North Karelia (NK), Finland. To learn how innovation can expand and strengthen business in practice, we assessed how forest bioeconomy companies in NK integrate research, technology development digitalisation and innovation (RTDDI) into their operations and explored the barriers they face to realise their market potential. We focused on 96 companies in NK and collected company data from economic databases and a survey (47 responses). We found that companies spent on average 9% of costs on research and development with variations across sectors. Most companies relied on private funding for their RTDDI activities. Aligning production capacities with actual market demand appeared to be challenging. Several barriers and constraints have been highlighted as hindering the companies from fully realising their economic potential. These are mostly legislative, regulatory and financial of nature, but also availability of a suitable workforce and technological barriers have an impact. These challenges are consistent with findings from other European regions. We recommend increased support for especially small and medium enterprises in innovation processes and market assessments and better visibility and accessibility of existing services.