All countries will eventually need to rebuild their growth models around digital technologies and the human capital that supports their deployment and expansion.
Michael SpenceRead
One way to measure the size of a company, industry, or economy is to determine its output. But a better way is to determine its added value - namely, the difference between the value of its outputs, that is, the goods and services it produces, and the costs of its inputs, such as the raw materials and energy it consumes.
Interpretation
What this quote means
The value of a company is better measured by its added value than by its total output.
This quote emphasizes that assessing a company's worth should go beyond merely evaluating the volume of goods and services produced. Instead, the focus should be on the added value, which is the difference between the revenue generated from outputs and the costs incurred from inputs, thus highlighting the importance of efficiency and innovation in creating value within an economy.
Themes
ValueOutputEconomyAdded ValueInput
In practice
Example use cases
A business presentation on how to improve productivity by focusing on added value.
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