Market consolidation doesn’t explain why new materials and processes aren’t being invested in? I don’t know how it works in China, but in the US that’s a very plausible explanation. At least it’s one.
I think the pure white copy paper and other paper products that are “touched” more are also a reason. But for cardboard packaging and a lot of other uses it’s probably perfectly valid.
Hemp is said to need less water than cotton, which us said to need less than trees (there wasn’t a handy direct link) but there are many variables to consider.
Market consolidation doesn’t explain why new materials and processes aren’t being invested in?
Why wouldn’t it? Companies that have invested millions in land and equipment to harvest trees aren’t going to just stop using their equipment and get new equipment / land for a different material on a whim. If it makes them money they’ll keep doing it. No reason to take a potential Billion dollar risk on changing equipment and production processes. Sunk cost fallacy is a real barrier for a big company with millions in assets. They probably won’t change unless they have a competitor producing goods cheaper or a government regulation / tax prompting them too. Changing production practices has a cost that most public companies are too cheap to pay for. They would rather use the money for stock buybacks, exec compensation, and investor dividends.
The market ain’t perfectly efficient, companies don’t care about efficiency if they are making money hand over fist. I imagine it is being done somewhere but it is just on a much smaller scale. If they grow enough they will get offers from big companies to buy them as that is cheaper than actually competing. For hemp there is also the risk that if you get too big they bribe lobby for making it illegal to put you out of business.
I think people underestimate the laziness/complacency of most people / companies, if it works why change it? Any employee has a better chance of being fired for trying to innovate than actually getting rewarded / promoted. Heck I imagine an executive could theoretically also get canned for trying to change the production process if they fail, though I imagine they would just pin it on a middle manager.
Market consolidation doesn’t explain why new materials and processes aren’t being invested in? I don’t know how it works in China, but in the US that’s a very plausible explanation. At least it’s one.
I think the pure white copy paper and other paper products that are “touched” more are also a reason. But for cardboard packaging and a lot of other uses it’s probably perfectly valid.
Hemp is said to need less water than cotton, which us said to need less than trees (there wasn’t a handy direct link) but there are many variables to consider.
Why wouldn’t it? Companies that have invested millions in land and equipment to harvest trees aren’t going to just stop using their equipment and get new equipment / land for a different material on a whim. If it makes them money they’ll keep doing it. No reason to take a potential Billion dollar risk on changing equipment and production processes. Sunk cost fallacy is a real barrier for a big company with millions in assets. They probably won’t change unless they have a competitor producing goods cheaper or a government regulation / tax prompting them too. Changing production practices has a cost that most public companies are too cheap to pay for. They would rather use the money for stock buybacks, exec compensation, and investor dividends.
The market ain’t perfectly efficient, companies don’t care about efficiency if they are making money hand over fist. I imagine it is being done somewhere but it is just on a much smaller scale. If they grow enough they will get offers from big companies to buy them as that is cheaper than actually competing. For hemp there is also the risk that if you get too big they
bribelobby for making it illegal to put you out of business.I think people underestimate the laziness/complacency of most people / companies, if it works why change it? Any employee has a better chance of being fired for trying to innovate than actually getting rewarded / promoted. Heck I imagine an executive could theoretically also get canned for trying to change the production process if they fail, though I imagine they would just pin it on a middle manager.
I mean, that was kind of my point, but. Yeah. What that guy said.