Better Quote by Michael Spence
“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.”
About This Quote
Source Speech: Economic Forum, Michael Spence, 2021
Measuring a firm’s or economy’s health is better done by looking at added value rather than raw output, highlighting true contribution after costs.
In simple terms: Focus on net contribution, not just production.
Key Takeaway
Prioritize value creation over volume.
Themes
economics
value creation
efficiency
productivity
business strategy
Mood
analytical
pragmatic
strategic
Type
economic
business
analytical
When to use this quote
- business planning
- policy analysis
- investment decisions
- corporate strategy
Key Concepts
added value
cost accounting
economic measurement
Questions to Reflect On
- How can you capture the value of intangible assets?
- What metrics best reflect true economic health?
A Different Perspective
Added value can be hard to quantify for services or intangible outputs.
