SYMBIOSIS INTERNATIONAL (Deemed University) Symbiosis Law ...
Global Value Chains and Sino-Finnish Symbiosis
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Global Value Chains and Sino-Finnish Symbiosis * Petri Rouvinen ETLA , The Research Institute of the Finnish Economy Pujiang Innovation Forum Shanghai, 26 Oct. 2013 * A part of BRIE-ETLA collaborative research (www.brie-etla.org). Finland was Pujiang Innovation Forum’s (Shanghai) Country of Honor. The event was hosted by Wan Gang, Minister of Science & Technology, China, and Jan Vapaavuori, Minister of Economic Affairs, Finland.
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Finland was Pujiang Innovation Forum's (Shanghai) Country of Honor in 26 Oct. 2013. The event was hosted by Wan Gang, Minister of Science & Technology, China, and Jan Vapaavuori, Minister of Economic Affairs, Finland.
Transcript of Global Value Chains and Sino-Finnish Symbiosis
Global Value Chains and Sino-Finnish Symbiosis *
Petri Rouvinen ETLA , The Research Institute of
the Finnish Economy
Pujiang Innovation Forum Shanghai, 26 Oct. 2013
* A part of BRIE-ETLA collaborative research (www.brie-etla.org).
Finland was Pujiang Innovation Forum’s (Shanghai) Country of Honor. The event was hosted by Wan Gang, Minister of Science & Technology, China, and Jan Vapaavuori, Minister of Economic Affairs, Finland.
80%of global value chains are shaped by transnational corporations
Source: UNCTAD 2013, p. iiihttp://unctad.org/en/PublicationsLibrary/diae2013d1_en.pdf
Beijing, China Salo, Finland39% 41%
The assembly location –China versus Finland – makes little difference for Finnish Value Added !?
Source: Ali-Yrkkö, Rouvinen, Seppälä & Ylä-Anttila 2011 http://v.gd/oLoC2n
Asia
Finland
Over time, value added shifts to Asia
3310 1100 1200
Finland26%
Finland21%
8%
Asia26%
Asia30% Asia
37%
Nokia 3310in 2000
Nokia 1100in 2004
Nokia 1200in 2007
Source: Seppälä & Ali-Yrkkö 2013
Are engineering products, such as this burner by Finnish Oilon, different from electronics?
Oilon
20+ years in China
Best-known burner brand at China’s industrial sites
CleanDesign Award with Beijing District Heating Company
Assembly locations more important in cases of 10 Engineering Products
Abroad (China) In Finland24% 54%
Why? Localization of parts/supplies & supporting services
Role/location of IPRs
Location of the profit center
Transfer pricing practices
Source: Ali-Yrkkö & Rouvinen 2013 http://pub.etla.fi/ETLA-Raportit-Reports-16.pdf
Lessons of 39 global value chain case studies:
Who creates/captures value?
• Desirable positions for an enterprise– Brand owner, orchestrator
– Interfacing with customers
– Gatekeeper in the chain
• Desirable positions for an individual– High-level ”supporting” service tasks
– Creation/management of intangible assets
Value creation and capture often detached from the physical flows …
… also in manufactures value is often in services and other intangible aspects
ScaleBoth for China and Finland, thenational interest in activities that
i.e., earn ever higher returns per work hour
Why? Because these activities can sustain raising wages & repatriated profits
How to promote these? (1) engage in the right businesses; (2) invest in tangible and intangible capital; (3) organizational efficiency
Software scales like no other business!
Finnish Rovio: the best selling app
Over 1.7 billion downloads
Significant presence in China
The raising prominence of global value chains has lifted hundreds of millions of people out of poverty worldwide.
Nowhere more so than in China.
Operations in China have enabled Finnish companies to maintain global competiveness and sustain jobs in Finland.
