Re-introducing Value Added
And a short guide to some of the key themes of this newsletter.
As Value Added has grown, it’s attracted a variety of audiences—policy folks, academics, and China watchers alike. While my PhD research focuses on the cloud sector and the AI transition, longtime readers will have noticed that for Value Added, I look at a much wider range of topics; from enterprise software, to the EV transition, to other developments in the knowledge economy—sometimes in a Chinese context, sometimes in the U.S., and occasionally in Europe.
This variety can of course be disorienting and feel unfocused, but I believe that putting different sectors, technologies, and countries in direct conversation opens up rich opportunities for comparison.
Comparison is itself an act of analysis. It sharpens our understanding of a political economy, an industry, or even a single firm by revealing features we might otherwise take for granted. The uniqueness of the American political economy, for instance, comes into sharper relief when set alongside other advanced economies; just as China’s distinctive approach to technology development becomes more apparent when we contrast it with the U.S.'s experience.
That’s why I write across what may seem like disparate topics and contexts: examining different sectors, technologies, and countries in parallel offers a powerful analytic lens. I believe you can’t fully understand how China or the U.S. innovates by looking at just one sector or technology in isolation. Whatever first brought you to Value Added, I hope you’ll find value in exploring these connections—and join me in using comparison as a tool for deeper understanding.
To help draw out these connections, this post highlights four key cross-cutting themes that I tend to return to across sectors, technologies, and countries—along with several pieces that best exemplify each theme.
1. State-business relations and industrial policy
Innovation is not the activity of a lone genius or even a single firm, but unfolds always within a political economy. And so, the basic premise of this newsletter is to understand how states and firms interact to generate the best or newest innovation outcomes. Indeed state institutions (education systems, labor regimes, trade associations, etc) and increasingly direct state coordination, as seen in the recent resurgence of industrial policy, are central in establishing the conditions under which innovation happens. A key theme of this newsletter is to examine how different institutions and different models of state–business coordination (whether in China’s AI ambitions or America’s manufacturing revival) structure the incentives, capacities, and trajectories of innovation.
2. Labor relations
Labor relations are an often overlooked aspect of innovation, but in an increasingly knowledge-intensive economy they play a crucial role in shaping how new technologies are developed, adopted, and deployed. From the internal incentive structures within the firm to the employment protections and labor laws of a country, the way labor is organized can determine whether innovation is extractive or generative—whether it enables creativity or simply disciplines workers to meet KPIs. In both China and the U.S., I’ve explored how different labor regimes condition not just productivity, but the very forms that innovation takes.
DeepSeek part 1: How new labor practices propelled an unknown AI firm to the top
"Boss culture", 996, and KPI-driven management in China's tech sector
3. Firm strategies and corporate governance
If state–business relations shape the broad parameters of industrial development, firm strategies and corporate governance determine how companies navigate those parameters on the ground. Even within the same policy environment, firms can make very different choices about how to finance their activities, organize production, manage supply chains, and structure governance. And with new technologies with new business models, firm strategies are constantly forced to change. These decisions ultimately influence whether firms pursue short-term gains or long-term innovation, vertical integration or outsourcing, high-road or low-road models of growth.
4. Tech transfer and diffusion
When we think about innovation, we tend to spotlight cutting-edge breakthroughs. But the real economic impact of a technology depends much more often on how it spreads. The extent in of its diffusion determines whether a new technology can transform an entire economy so that its productivity gains are felt widely or remains confined to a handful of firms (or labs) or sectors. Similarly, technology transfer—how technologies move from one country to another—is fundamentally about how capabilities move across borders or firms, shaping which countries benefits from innovation and who gets left behind.