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MacBytes
Nov 28, 2009, 03:26 PM
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Category: Opinion/Interviews
Link: What the iPod tells us about Britain's economic future (http://www.macbytes.com/link.php?sid=20091128162654)
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Posted on MacBytes.com (http://www.macbytes.com)
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mkrishnan
Nov 28, 2009, 03:34 PM
I understand the broad point (and this certainly speaks to the developed world's ability to profit from globalism, against the cries of those people who can't do CSR or manufacturing jobs because they've been outsourced), but... can anyone help me understand the math here? (Relatedly, I googled around and could not find a succinct definition of what "captured value" means.)

So...

- How is the $190 of "captured value" distinguished from the $109 of apparently "uncaptured" value?

- If the iPod was made in China, and the Chinese take was at least $4, which is greater than the $1 Korean share indicated, why is it not in the pie chart?

Cybbe
Nov 28, 2009, 04:12 PM
This article goes at lengths to describe the global value change. Most informed people already know this. However, the main gripe with globalisation and outsourcing of production is not the finer points of national accounting. It's the fact that low- and medium skilled jobs in the developed world are eliminated, and not being replaced. The people working at Apple, CA, as well as her shareholders, tend to be highly skilled, well-off people. It's the distribution of income within countries that's changed by the globalisation of the economy, and the lower skilled workers in the developed world are squeezed. Statistics on US households confirm this picture.

The rhetoric used by factory workers in the western world is thus not that misleading, insofar as they argue that they loose their jobs so that better skilled groups can reap higher gains. Slightly off on the cause, dead on describing the effect.

fobfob
Nov 28, 2009, 04:52 PM
Yes, and the article title is misleading. It is not a story about Britain's economic future, it is a story about how today's global economy works using Apple's iPod as a case study. A few sentences tacked on mention that Britain should understand how it works and act accordingly to maximise economic gain in the future. But it's "should", not "will", and all countries should do the same.

Eraserhead
Nov 28, 2009, 04:55 PM
So...

- How is the $190 of "captured value" distinguished from the $109 of apparently "uncaptured" value?

- If the iPod was made in China, and the Chinese take was at least $4, which is greater than the $1 Korean share indicated, why is it not in the pie chart?

Why is the UK not in the pie chart either?

winmacguy
Nov 28, 2009, 05:16 PM
Yes, and the article title is misleading. It is not a story about Britain's economic future, it is a story about how today's global economy works using Apple's iPod as a case study. A few sentences tacked on mention that Britain should understand how it works and act accordingly to maximise economic gain in the future. But it's "should", not "will", and all countries should do the same.

My take on the article is that while small countries like Britain and NZ lack the cheap skilled labour supply of China they have a fair amount of under utilised but highly skilled university educated work force which is not currently providing enough "bang for buck" to make British or NZ companies a force to be reconned with on a global scale.

That is why I posted the article.