Automating Work | Software |
Beauty | Hairstylist |
Building Houses / Buildings | Carpenter |
Building Infrastructure | Construction Company |
Clothing | Fashion Brand |
Comfort | Cafe |
Communicating a Message | Digital Advertising Company |
Computing Things | Mobile App |
Connecting Buyers to Sellers | Online Auction |
Connecting People | Conference |
Convenience | Convenience Store |
Converting Materials to a More Usable Form | Lumber Mill |
Cooking Food | Homemaker / Restaurant |
Crafting Things | Craftsperson |
Creating a Sense of Belonging | Team Sports |
Creating Art | Artist |
Creating Electricity From a Resource | Power Plant (e.g. burns natural gas) |
Creating Electricity From Energy | Solar Panels |
Creating Media | Vlogger / Magazine |
Creating Shared Experiences | Concert |
Creating Social Environments | Nightclub |
Culture | Local Festival |
Custom Manufacturing | Custom T-shirt Printing |
Customer Support | Customer Service Functions of an Airline |
Delivering Products | Package Delivery / Ecommerce |
Design | Graphics Design Freelancer |
Developing a Technology | Freelance Software Developer |
Developing Knowledge | Non-fiction Author |
Distributing Products | Retailer |
Education / Learning | University / Trade School |
Entertaining | Streaming Media |
Epic Experience | Video Game |
Executing a Business Process | Customer Service Outsourcing |
Facilitating Commerce | Payment App |
Facilitating Communication | Mobile Voice Service |
Facilitating Debate / Arguments | Social Media |
Facilitating Promotion / Self Promotion | Social Media |
Fixing Something | Plumber |
Friendly Service / Being Nice | Hotel Service Desk |
Generating Social Status | Fashion Brand |
Growing Food | Farmer |
Healthcare | Hospital |
Housing / Shelter | Landlord |
Investments | Exchange Traded Fund |
Maintaining Things | Handyman / Handyperson |
Making Things More Aesthetically Pleasing | Interior Design |
Manufacturing Products | Solar Panel Manufacturer |
Marketing / Selling Assets | Real Estate Agent |
Marketing / Selling Goods | Retailer |
Nature Experiences | National Park |
Operating Infrastructure | Data Center |
Opportunity to Play | Park / Video Game |
Organizing Events | Wedding Planner |
Packaging Something | Food Processing Facility |
Preserving Wealth | Bank Account |
Providing a Market | Flea Market / Stock Market |
Providing a Standard | Building Codes |
Providing Adventure | Sailboat |
Providing Choice / Variety | Grocery Store With 5 Kinds of Apples |
Providing Gossip | Social Media |
Providing Research Tools | Internet Search |
Providing Safety | Sidewalk / Pedestrian Infrastructure |
Providing Seating | Restaurant |
Providing Security | Unbreakable Door |
Providing Social Interaction | Gym / Personal Trainer |
Recreation | Skating Rink |
Reducing a Risk | Fire Detector |
Reducing Pollution | Air Purifier / Forest |
Regulating an Industry | Transportation Safety Department of a Government |
Resolving Disputes | Lawyer |
Saving Time | Express Train / Bullet Train |
Solving Customer Problems | Landscaper |
Storing Value | Money / Bank Accounts |
Style | Fashion Brand |
Tech Support | Cloud Services Support Tickets |
Testing Things | Quality Control Department of Manufacturer |
Traditions | Traditional Dance Festival |
Transferring a Risk | Insurance |
Transmitting Information | Objective News |
Transmitting Opinions | Biased News |
Transporting Goods | Shipping Service |
Transporting People | Airline |
Useful Advice | Consultant |
Wellness | Spa |
Calculating Added Value
Added value is the difference between the value of the inputs and outputs of an activity, process, service or organization. In other words, it is a way to measure value generation at any level of a business. As a simple example, if a fruit stand buys an apple for $1 and sells it for $2, the added value of the transaction is $1. It is difficult to calculate added value when no money actually changes hands but it can be estimated. For example, the fruit stand may estimate that distributing the apples produces $0.50 value, cleaning the apples produces $0.10 and selling the apples produces $0.40 in value. Note that this adds up to the $1 in total value creation.Added Value vs Value Capture
Added value is the creation of value. You may or may not be able to capture this value for yourself. For example, an author that publishes a book that changes the world may only get paid a very small part of the value that they have generated. This is a very common situation whereby creating value doesn't mean that you get paid that value.Added Value vs Rent Seeking
Added value is the creation of value whereby you might try to capture some of this value for yourself. Rent seeking is the process of capturing value without creating it. For example, an employee who tries to avoid work and value creation but aggressively seeks compensation, promotions and political power.Negative Value
Things can create negative value known as economic bads. For example, a service that sprays a chemical on a lawn that creates $40 in value by killing a few weeds that causes $40,000 in health damage to a neighborhood.| Overview: Added Value | ||
Type | ||
Definition | The difference between the value of inputs and outputs of something. | |
Related Concepts | ||
