Many times in this century, serious timber shortages have been forecast for the forest products industry. Although the economic scarcity of some wood materials is apparently increasing (the real price of sawlogs has been rising for a long time) other wood materials seem unaffected (pulpwood prices have remained relatively stable over the last four decades). Thus, although numerous wood-saving technological improvements are reportedly “on the shelf” and others are being adopted rapidly by the industry, slow adoption rates for some major innovations undoubtedly reflect an appropriate response to economic conditions rather than conservatism.

This chapter addresses the following questions: what are some of the principal and unique influences on technological change in the forest products industry that must be understood to anticipate future rates of adoption of new technology? Do these influences currently elicit appropriate rates of technology adoption?

The chapter has five major sections: (1) the importance of innovations imported from other industries (interindustry flow) and other countries; (2) the effect of raw material shortages; (3) the effect of the economic performance of innovations; (4) problems presented by the heterogeneous nature of wood raw material; and (5) problems presented by the heterogeneity of finished products. It is taken as axiomatic that the impact of technological change is not felt at the stage of invention or innovation, but only when improved technologies are actually used in production. For this reason, we pay particular attention to the determinants of the adoption of new technologies.