Abstract: Globalization and the Pulp and Paper Industry

Steven Usselman


This essay evaluates major ideas and concepts presented by Manuel Castells in his monumental trilogy, <i>The Information Age</i>, by attempting to apply them to recent developments in the global pulp and paper industries. It pays particular attention to changing governance structures at the levels of the firm, the region, the nation, and the globe. Though slow to feel the winds of globalization, the pulp and paper industries have increasingly followed a course of change anticipated by Castells. The first inklings of change came in the form of global capital flows mobilized through multinational corporations looking to enter new markets. Early on, this occurred with Finnish and Swedish conglomerates entering the North American market. More recently, global investment has flowed toward an emerging network of global trade through which pulp obtained from rapidly maturing species in tropical settings is shipped to manufacturing facilities in developing nations with large internal demand and potential for export. As Castells would anticipate, this global network has involved some loosening of tight vertical coordination, as evident in the mounting separation of pulp supply from paper production within North America and around the world. Yet multinationals remain important. Many multinationals, moreover, have operated under persistent influence from their established home nation-states, whose identities are often bound closely to the health of the forest products industries. At present such national ties are weakening, though they often remain strong at the regional level. As Castells has observed in other industries, with globalization, regional authorities have thus risen in prominence relative to nation-states. At the same time, transnational groups such as Greenpeace have come to exert progressively more influence over environmental governance, generally by exerting pressure directly upon multinationals themselves. In general, this approach has proven more influential than formal transnational governance mechanisms entered into by nation-states.