Selling Value Addition

Is 'value added' in danger of losing its power as a concept in the popular Indian mind?

Here's a figure. India's diamond exports: $10 billion. The country imports rough freshly mined stones, cuts them, polishes them, and sends them overseas. Ten billion dollars is nothing to scoff at. But the real sparkle isn't added by those people performing late night operations on the stones under special lights with their hands through glove holes.

It is added by the Diamond Trading Company (DTC), the marketing arm of a vast global operation called De Beers that more or less controls the world's diamond business. Across the world, people pay more than $40 billion every year for diamonds. In other words, $40 billion is the perceived market value of these little pieces of pressurised carbon, all added up. Keeping this value up and rising is the job of DTC. The difference between the retail value, the $40 billion, and the value of the stones cut-n-polished for despatch (more than $10 billion, admittedly, since India is not the sole diamond exporter), is a fat sum. This is 'value addition'. And it is mainly intangible.

Why should this be relevant at the moment?

Because in popular Indian perception, the term 'value added' has got attached to the word 'tax'---the sound of which is not very pleasing, no matter how good it really is for the economy and all that.

What's needed now is a desperate campaign to rescue the concept of value addition from being distorted beyond all recognition. For one, value addition in itself is a good thing, and that must be clear. For another, value addition is the way to go.

While the world's trade analysts may have been preoccupied with the cost aspect of businesses in country after country (cheapest this, cheapest that), which is an understandable measure of competitiveness, what goes unsaid is this. No country has ever---ever----had a crack at genuine economic success simply by doing everything others have done a lot cheaper.

This puts a premium on value addition as a manic business obsession, with cost crimping and all the rest of the efficiency game relegated to the role of a 'hygiene factor' (without it, you'd better close shop, but this alone won't get you beyond a point).

India's imposition of the 'value added tax' (VAT) should have been a perfect opportunity to launch a nationwide campaign to explain value addition in the simplest possible terms (perhaps even in fuzzy net satisfaction enhancement terms). A good creative mind could have turned out something really exciting as a precursor to the tax.

But alas, all we have is ugly looking text-heavy public notices that read and sound like drab orders from big powers on high thrones. The kind of thing to shrug and accept by way of karmic resignation.

There's still time. But unlike diamonds, not until forever.

Issue Contents  Write to us   Subscription   Syndication 

INDIA TODAY | INDIA TODAY PLUS
CARE TODAY |  MUSIC TODAY | ART TODAY  | SYNDICATIONS TODAY

© Living Media India Ltd