Arvolisäarvo

Arvolisäarvo, often translated as added value, is an economic concept that represents the increase in the value of a product or service that results from a company's production process. It is the difference between the selling price of a product or service and the cost of the intermediate goods and services used in its production. Essentially, it is the wealth created by the business.

This concept is fundamental to understanding how businesses contribute to the economy. The sum of the arvolisäarvo generated by all businesses in a country is a significant component of its Gross Domestic Product (GDP). It reflects the productivity and efficiency of the economic actors involved.

Arvolisäarvo can be generated in various ways, including through innovation, improved efficiency, branding, marketing, and the provision of superior customer service. For example, a company that refines raw materials into a finished product adds arvolisäarvo by transforming less valuable inputs into a more desirable and thus more valuable output. Similarly, a service provider that offers expert advice or a unique solution adds value through their knowledge and skills.

Economists use arvolisäarvo to measure the contribution of different sectors to the national economy and to analyze productivity trends. It helps in distinguishing between the value added by a firm and the cost of inputs that are purchased from other firms. This distinction is crucial for avoiding double-counting in national income accounting. Understanding arvolisäarvo helps to grasp how economic activity generates wealth and contributes to overall economic growth.