Werner Vontobel classifies: “Value chains – the more global, the worse”

Meanwhile, we invented money, improved the division of labor, and became much more productive. But this advancement also has a few downsides: For many, the job has become monotonous and often a lonely job compared to the campfire experience following a group hunt. Additionally, business processes have become much more complex. The lion’s share of the work today is simply tackling market-related complexity. First of all, the market economy distributes its spoils very unevenly.

Access to global customers is profitable

This problem has been significantly exacerbated by global value chains. The more global they are, the more value can be derived from a few strategic points. Examples include financial services, management, research and advertising. Those with access to global customers are also missing this opportunity. Booking.com, for example, takes 15 to 20 percent of the booking price and therefore claims about half the added value with a small portion of the work.

An obvious example of concentrated value extraction is the Swiss shoe manufacturer On. It produces in Vietnam, where the minimum wage is about one dollar an hour. The top five founders and senior executives paid around 16 million francs each in 2021. They also raised another $135 million from selling shares during the IPO. So far they have raised nearly $50 million more in 2023.

Land owners become the winners of globalization

To achieve this, 25,000 textile workers will have to work hard for a year. In addition, these added values ​​are mainly in Zug, Zurich, Geneva, Munich, New York, etc. disappearing in global hotspots such as As a result, rents and real estate prices are exploding there, which means that landowners there are also in a difficult situation. globalization winners But not only are they taking a lot of money from globalization winners, they are also robbing normal income earners and renters in the hotspots. All told, this redistribution amounts to a high double-digit billion in Switzerland alone; Of course, on an annual basis.

This is bad, but it gets worse: for decades it was a foregone conclusion that peripheral regions could only develop by connecting themselves to global value chains. But since the fat members are already busy, they have to make do with skinny rest. We saw what this means for Vietnam in the Ten shoes example. However, the situation does not look good for high-tech products either. As labor costs have increased in China, Foxconn recently began producing the iPhone in Vietnam on behalf of Apple; This means that this country accounts for only 2 percent of the total value added.

When Switzerland became an industrial country, value chains were not yet global. Otherwise we’d still be starving.