02-Sterbova

The market for forestry services in Slovakia consists of contractors’ business entities that don’t own and use forest lands, but only provide and ensure forestry services, such as timber harvesting, skidding and transport. The objective of the study is to evaluate the functioning of the sectoral innovation system in the Slovak forestry service sector, with an emphasis on the evaluation of its three basic functions for innovation support: (i) reduction of uncertainties by providing information, (ii) management of risk and cooperation among the various actors, and (iii) the provision of pecuniary and non-pecuniary incentives.

Previous research on innovation behaviour in the Slovak forestry service sector pointed out that innovation activity of contractor firms is low, while the innovation potential of these subjects is high. Incremental innovations – new for the firms, not for the sector in general – dominated, and the largest share of successful innovations were technological.

The added value of the study represents the holistic view of innovation support in this sector from the innovation system perspective. It is based on the analysis of innovation system individual features – contractor firms and institutional system and support. In order to meet the aim of the study, three main methods were used – literature review, document analysis and interview (Figure 1).

The conclusion is that the innovation system in the sector fulfils its three basic functions for innovation support at insufficient levels. There is a high level of uncertainty, mainly because of the strong dominance of the state forest enterprise, which results in disadvantageous conditions for public tenders. Moreover, contractor firms are not able to reduce such uncertainties because of a lack of sectoral knowledge, links, and information regarding innovation opportunities. The existing innovation knowledge base does not provide good guidance for managers to develop and follow their innovation pathways. From an institutional system point of view, information exchange and cooperation among the various actors is weak. A formal cluster does not explicitly exist and contractors work together only on an informal level. Most appropriate for the potential clusters within the sector appeared the regions of Banská Bystrica, Presˇov and Kosˇice (Figure 2). Moreover, the market is unstable because the supply of services exceeds demand and the dominant state forest enterprise pushes prices for services down. Therefore, contractors try to strengthen their own position compared to others, so they are more competitors than partners.

At the same time, the financial support from the RDP in the programming period 2007–2013 was not focused on supporting innovations in the forestry service sector. Its strict conditions caused financial incentives not to fulfil their function within the innovation system. On the other hand, the conditions for obtaining financial grants in the period of 2014–2020 are significantly improved towards supporting innovations in this market. Therefore, a higher level of motivation of contractor firms to implement innovations into practice can be expected.