This case shows that the development of the wood construction sector is complex, and causality cannot be attributed to single actors or decisions, but to the sum of different efforts. It is precisely at the intersection between key players where change originates, with collaboration as the catalyser and trust as the glue that binds them together. The fact that there is no “golden ticket”, a singular innovation, event, or driver that explains the birth of multi-storey wood construction, implies that the nature of innovation differs from other types of ground-breaking innovations. For instance, the smart phone had an immediate global effect, rapidly replacing and rendering obsolete previous technologies and products, profoundly transforming the industry, the way we communicate, and society at large. However, we do not see a rush towards adopting timber as an alternative in construction or the obsolescence of established building systems, and we should not expect a societal impact of the same magnitude. In a slower pace, however, wood construction does seem to have the potential to profoundly transform the construction industry in suitable parts of the world, including the Nordic Countries (Interviewee 11). This most probably will not mean the complete replacement of existing building systems and actors, but will disrupt the current business ecosystems, the business models and add diversity to the existing market options. In short, this is a case of systems innovation rather than a product or technological innovation alone.

In this study, we have identified a number of key moments or events in history that have triggered major development in the form of technological innovation or in building industrial capacity and knowledge. From the contracts issued by the Swedish military in the 1940s, the Million Home programme in the 1960s-70s, the rapid urbanisation processes post-war (and reconstruction in the case of Finland), to more recent changes in legislation, first enabling multi-storey building in wood, and then the recent climate declarations and limit-values on emissions. The state, both in Sweden and Finland, has enabled technological development by funding and supporting R&D programmes and setting strategies for development. All these events, old and new, highlight the strong influence of state policy and legislation in boosting the market for wood construction. On the other hand, it was the state to halt development to begin with via prohibition on MSWC imposed in the late 1800’s.

Accession to the EU and processes of harmonisation of legislation have also triggered important changes on the rules of the game, even unintentionally. The EU, however, has also a big role to play when it comes to setting environmental goals, as well as with more soft approaches, such as issuing the voluntary recommendations for green procurement in the construction of offices.

However, once the rules of the game have changed, the role of the national and supra-national level becomes less prominent, whereas sub-national authorities play a more practical role in supporting development in several ways. Selected municipalities reacted quickly to the legislative changes, building on local industrial and economic competitive advantages. Their closer proximity to business networks and other community actors allowed them, often through more informal means, to build momentum and create a common vision onto how to seize the new opportunities. Establishing trust relations with businesses was key for them to take risks and invest in new infrastructure and work towards entering the new market niche. In taking part of knowledge creation projects (e.g. Trästad 2012), and commissioning the first pilot buildings, municipalities have also taken a more entrepreneurial role. Through ‘green finance’, municipalities have stimulated market creation and supported companies to build capacities and experience.

The private sector plays a more direct role in industrial development, starting from exploring and investing in product development, designing new building systems, piloting, to finally producing materials, building elements and erecting buildings. However, the private sector is heterogenous and includes many actors along supply chains. Only a handful of them are risk-taking pioneers, whereas the grand majority, at least in the early development stages, belong to the establishment and either resist change or are comfortable with the status quo, including contractors, real estate companies, banks, and insurance companies. However, from the pioneering companies, some have come from the outside of the established business ecosystem (wood industry), but others have also taken a step up from the inside (construction sector). In both cases, they needed to circumvent the existing actors, supply chains, business and finance models to be able to open up a place in the market.

R&D has been an essential mechanism for progress, whether it comes from academia itself, the industry, or in partnership. The public sector and academia have recognised the importance of funding large scale R&D programmes for knowledge development, and the importance of setting triple helix partnerships, not only to solve technical challenges but also systemic ones. Academia and education programmes have also been successful in generating awareness.

Banks and insurance companies have instead played a deterrent role, being slow in adapting and not offering options to a nascent industry, which as an outlier in the market requires risk capital and support. Lastly, the society at large and changing values have added pressure to policymaking and the industry in delivering on the sustainability goals and the green agenda. Changing values also influence perceptions towards modern wood buildings as they become a symbol of status and urban renewal.

When looking at the role different actors play, it is important to recognise their evolution over time. For example, authorities have taken a step up from their normal administrative tasks to become drivers of development or entrepreneurial. Municipalities have learnt to navigate around the legislation to favour wood construction despite of the principle of material neutrality. When entering new market segments or engaging in new parts of the supply chains, private companies are also evolving and mutating. For instance, to get around the resistance of the well-established actors or reluctance from financiers to support their ventures, pioneer companies have transformed from being a e.g. wood industry to become a construction company or vice versa, or simply start side companies to deliver supplementary services e.g. design and consulting. In this process, knowledge flows between industries, by professionals moving across industries, have been necessary to build new capacities. As a result of these changes, the business ecosystems have transformed.

In short, the systemic nature of industrial transformation means that no single interest group, no matter how strong, nor a single factor can be attributed the whole responsibility for driving change. Systems barriers are embedded within the interlinkages between actors, nodes in the supply chains and the overall industry organisation. Structural inertia stems from long established traditions and practices, network gaps, insufficient knowledge, experience and skills, and the risks involved in developing a new industry. In this situation, even major legislation and policy shifts do not automatically lead to an upsurge in demand, as wood companies noticed when their initial optimism following the regulative reforms in 1994 and onwards was perhaps premature. Instead of waiting for transition to occur by itself, actors needed to nurse the nascent industry, establish new partnerships and find creative ways to open market niches. One way to achieve this, for example, is by first supporting ‘champions’ to create a customer base with the help of successful pilot projects, which then will help create more demand. All in all, it is precisely at the intersection between key players where change emerges, with collaboration boosting systems innovation.