Who Captures value in global supply chains? case Nokia N95 smartphone

Jyrki Ali-Yrkkö, Petri Rouvinen*, Timo Seppälä, Pekka Ylä-Anttila

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

48 Citations (Scopus)

Abstract

Available statistics reveal little about the economic consequences of the increasing global dispersion of production processes. To investigate the issue, we perform grass-roots investigative work to uncover the geography of the value added for a Nokia N95 smartphone circa 2007. The phone was assembled in Finland and China. When the device was assembled and sold in Europe, the value-added share of Europe (EU-27) rose to 68%. Even when it was assembled in China and sold in the United States, Europe captured as much as 51% of the value added, despite of the fact that it played little role in supplying the physical components. Our analysis illustrates that international trade statistics can be misleading; the capture of value added is largely detached from the flow of physical goods. Instead, services and other intangible aspects of the supply chain dominate. While final assembly-commanding 2% of the value added in our case-has increasingly moved offshore, the developed countries continue to capture most of the value added generated by global supply chains.

Original languageEnglish
Pages (from-to)263-278
Number of pages16
JournalJournal of Industry, Competition and Trade
Volume11
Issue number3
DOIs
Publication statusPublished - Sep 2011
MoE publication typeA1 Journal article-refereed

Keywords

  • global supply chains
  • international trade
  • mobile phones
  • Nokia
  • value capture

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