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Date: 2019-07-17 Page is: DBtxt001.php list0300-Value-chain-over-time-1

Definitions for TrueValueMetrics
Value Chain Over Time

The value chain analysis techniques may be applied over time. In this case an activity that has costs today creates profit and value tomorrow. Value chain analysis can show how amazingly good big long term investments are for society. The TVM approach brings this into the analysis process in a rigorous way. There are many examples in many sectors of society and the economy.

Education. The education of a child is a big expense ... but it is an investment that will pay back many times over the life of the person. Value chain analysis shows something of how a cost in early years creates opportunity for benefit in later years ... and could be the basis for economic analysis to justify investment not only by parents, but also by society in education and building human capital for the future.

Health. Treating disease is another big expense ... and again with an economic dynamic that changes over time. A strategy that invests so that there is no need to treat disease because the disease is controlled or eradicated is much better than one that merely waits and treats the disease when it is debilitating and has all the associated costs. Value chain helps to determine whether prevention rather than cure is the optimum strategy.

Infrastructure. The building of the US Interstate Highway System is another example. The system cost the US Government more than $100 billion ... but the immediate incremental property values around the country were way more than this ... and the productivity improvement of the national economy way bigger, and long lasting.

Parenting Maybe the biggest gift to a child are the parents who are way more important than modern society maybe wants to acknowledge. Science seems to be discovering that parents set the stage for the child's development in ways that we do not really understand ... but it is clear that good parenting is a huge contributor to a health socio-economic outcome. This is very valuable, but maybe not easy to quantify.

Community Beyond family, it is community that makes for quality of life. A good deed done today turns up as a favor returned sometime in the future. People have memory that works, even though society has no way of measuring these important intangible.



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