The study conceptualizes economic forest sustainability as “the forest-related income and economic well-being sustained over time” and then compares Lithuania and Sweden at different scales. Sweden adopts a holistic perspective of the forest sector, where forestry and forest industries are perceived as a well-integrated economic branch. Forestry is expected to deliver raw material to forest industries, at the same time creating good preconditions for profitable forest management. Forest owners are given large freedom to act according to market signals and their own household needs, while the resulting intensive forest management cumulatively leads to a significant contribution to the country’s welfare. Lithuania, in contrast, lacks an integrated sector perspective, forestry and forest industries being regarded as two separate realms. Private forest property rights are severely constrained by numerous legislative stipulations, leading to a significant reduction of economic value in production forests. On top of that, thirty percent of private owners face additional restrictions through forestland zoning, leading to further substantial loss of economic value. We suggest several measures for improving the economic forest sustainability in Lithuania, where a genuine national forest program could serve as a suitable bearing medium.

In Lithuania forests occupy about 2 million hectares, it consists 31.3% of total land area. 32.2% of forests are privately owned. Annual removal is 6.5 million m³. The main production of the Lithuanian woodworking industry is sawn wood, furniture. Lithuanian forests are not only the source of wood products but also non- wood forest products such as berries, mushrooms, game etc. Forests are owned by 222.2 thousands private forest owners and 42 state forest enterprises. Forest industry consists 873 companies; most of there are SME’s. The main factors effecting the competitiveness of forest-wood /non-wood/servicesconsumer chain from the point of view of entrepreneurship in Lithuania: rich wood and non-wood products resources; low level of round wood prices;, favourable geographical location; low cost of labour; the possibilities to get financial support from EU funds. Barriers to entrepreneurship: low level of domestic market development for wood and non-wood products (especially for small-sized round wood); the small-scale private forestry; high transaction cost for entrepreneurship; low capital resources (GDP per capita is low; biggest part of consumption expenditures fall to food and housing); low level of investments and innovations; very weak integration of forest sector to rural development programmes; low knowledge of business establishment and management; weak connections between research and business. The main problems and research questions for enterprise development in the forest sector: domestic market development strategies; urban consumers demand for forest products and services, integration of forestry into rural development; clasterisation of wood working industry; social structure of small-scale private forest owners; conflicts resolutions of multipurpose forest utilisation.