Global Value Chains and
Sino-Finnish Symbiosis *
Petri Rouvinen
ETLA, The Research Institute of
the Finnish Economy
Pujian...
%
of global value chains
are shaped by
transnational
corporations
Source: UNCTAD 2013, p. iii
http://unctad.org/en/Publica...
The assembly location –
China versus Finland –
makes little difference for

Finnish Value Added !?

39%

41%

Beijing, Chi...
Over time, value added shifts to Asia
Asia

Asia
26%

Finland
Source:
Seppälä &
Ali-Yrkkö 2013

Asia
30%

Finland
26%

Fin...
Are engineering products, such as this burner
by Finnish Oilon, different from electronics?
Oilon
20+ years in China
Best-...
Assembly locations more important
in cases of 10 Engineering Products

Why?
Localization of parts/supplies
& supporting se...
Lessons of 39 global value chain case studies:

Who creates/captures value?
• Desirable positions for an enterprise
– Bran...
Value creation and capture
often detached from the
physical flows …
… also in manufactures
value is often in services
and ...
Both for China and Finland, the
national interest in activities that

i.e., earn ever higher returns per work hour
Why? Be...
Software scales like no other business!
Finnish Rovio:
the best selling app
Over 1.7 billion
downloads

Significant
presen...
The raising prominence of
global value chains has lifted
hundreds of millions of people
out of poverty worldwide.
Nowhere ...
Thank
You!
fi.linkedin.com/in/petrirouvinen/
Petri.Rouvinen@ETLA.fi
 +358–50–3673474
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Global Value Chains and Sino-Finnish Symbiosis

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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.

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Global Value Chains and Sino-Finnish Symbiosis

  1. 1. Global Value Chains and Sino-Finnish Symbiosis * Petri Rouvinen ETLA, The Research Institute of the Finnish Economy Pujiang Innovation Forum 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. Shanghai, 26 Oct. 2013 * A part of BRIE-ETLA collaborative research (www.brie-etla.org).
  2. 2. % of global value chains are shaped by transnational corporations Source: UNCTAD 2013, p. iii http://unctad.org/en/PublicationsLibrary/diae2013d1_en.pdf
  3. 3. The assembly location – China versus Finland – makes little difference for Finnish Value Added !? 39% 41% Beijing, China Salo, Finland Source: Ali-Yrkkö, Rouvinen, Seppälä & Ylä-Anttila 2011 http://v.gd/oLoC2n
  4. 4. Over time, value added shifts to Asia Asia Asia 26% Finland Source: Seppälä & Ali-Yrkkö 2013 Asia 30% Finland 26% Finland 21% 3310 Nokia 3310 in 2000 1100 Nokia 1100 in 2004 Asia 37% 8% 1200 Nokia 1200 in 2007
  5. 5. 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
  6. 6. Assembly locations more important in cases of 10 Engineering Products Why? Localization of parts/supplies & supporting services Role/location of IPRs Location of the profit center 24% 54% Abroad (China) In Finland Transfer pricing practices Source: Ali-Yrkkö & Rouvinen 2013 http://pub.etla.fi/ETLA-Raportit-Reports-16.pdf
  7. 7. 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
  8. 8. Value creation and capture often detached from the physical flows … … also in manufactures value is often in services and other intangible aspects
  9. 9. Both for China and Finland, the national 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
  10. 10. Software scales like no other business! Finnish Rovio: the best selling app Over 1.7 billion downloads Significant presence in China
  11. 11. 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.
  12. 12. Thank You! fi.linkedin.com/in/petrirouvinen/ Petri.Rouvinen@ETLA.fi  +358–50–3673474

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