Arvonlisäinen

Arvonlisäinen is a Finnish term that translates to "added value" or "value-added" in English. It refers to the increase in worth of a product or service as it moves through the production process. This increase in value is created by transforming raw materials or components into something more valuable or useful, or by providing a service that enhances the original product.

In economics, arvonlisäinen is a key concept for understanding economic growth and productivity. It represents the difference between the value of a company's output and the value of the intermediate goods and services it used to produce that output. This difference is what contributes to the national income. Businesses aim to maximize their arvonlisäinen by improving efficiency, innovation, and product quality.

The concept can be applied to various sectors, including manufacturing, agriculture, and services. For example, a farmer adds value to raw milk by processing it into cheese. A software company adds value by developing and selling a sophisticated application. In retail, the act of making goods available to consumers in convenient locations and at suitable times also represents an addition of value. Governments often track arvonlisäinen to measure the economic performance of different industries and the economy as a whole.