In recent years, I've become increasingly fixated on one particular metric: export revenue per kilogram. But not just as an economic number—rather, as a deep indicator of national well-being. It's not just about putting more money in the pockets of workers and business owners. Increasing the unit value of our exports—producing and selling goods with higher added value—can generate ripple effects across the economy, society, and even the environment.
Let's explore this through a deliberately challenging example: cheese production.
Suppose you're a cheesemaker. If the cheese you produce is of exceptional quality, with recognized brand value, domestic and international buyers will naturally be willing to pay a premium for it. Over time, what you offer ceases to be "just cheese." It becomes part of a broader consumer experience—one that includes taste, quality, prestige, and even the subtle image benefits it offers.
In fact, one of the most fascinating dynamics in value-added production is the ability to sell the identity associated with consumption. Consumers who buy your cheese may not only enjoy a delicious product, but also signal taste, sophistication, and trustworthiness—especially when offering it to guests. This intangible value becomes part of the purchase decision, often without the buyer even realizing it. In essence, they're paying not just for the product, but for the experience and the perception it creates.
Let's go even deeper.
The value of your cheese isn't just in the taste. It extends to the seller's branding, the look of the packaging, and even the satisfaction someone might feel when holding the product in a shopping bag—subtly noticed by passersby. If this feels abstract, try to stay aware of your emotions the next time you shop. That heightened awareness will reveal how deeply experiential most of our purchases are. And when the experience is carefully designed and emotionally fulfilling, customers are willing to pay more.
So what happens when we increase value-per-kilogram at scale?
Let's go back to the production process of this premium cheese. High-quality cheese starts with high-quality milk. That means dairy farmers must care better for their livestock—investing in veterinary oversight, clean and humane conditions, and healthier feed. Healthier animals mean fewer diseases, some of which might otherwise spread to humans. A healthier farm environment protects not just the farmer's family but also the wider community. With fewer sick days and better focus, families thrive, children miss less school, and their long-term academic performance improves.
Cleaner farms mean less odor, creating a more pleasant neighborhood and lowering community stress. Higher demand for quality milk leads farmers to purchase better feed. This boosts the agricultural sector: crop farmers invest in better seeds, reduce pesticide use, and collaborate more with agronomists. This improves soil health and delivers better food not just to animals, but to humans—especially children. The broader result? Healthier future generations.
With slightly higher margins, farmers can build safer homes, reducing structural risks and leaving behind durable property for their children. That eliminates the need for burdensome home loans later in life, freeing up income for hobbies, personal development, or entrepreneurship. In turn, this cultivates a happier, more resilient society.
This may sound like a string of metaphors, but it's not—it's how the real economy works when we shift focus from volume to value.
The Danger of Low-Cost, High-Volume Obsession
It is increasingly evident that national prosperity cannot be sustained through a low-cost, high-volume export strategy. While such an approach may boost nominal GDP and create the illusion of global economic dominance, it often masks deeper structural weaknesses and social costs.
India, for instance, is frequently cited as an emerging economic powerhouse, with a nominal GDP of approximately $3.73 trillion in 2023. However, this figure alone is misleading. When measured by export revenue per kilogram—a proxy for technological sophistication and value creation—India lags significantly behind its economic peers. Its exports tend to be lower in complexity and added value, relying heavily on raw materials, textiles, and basic manufacturing. In contrast, Japan, which ranks one position below India in GDP rankings, consistently exports high-tech, high-margin goods, achieving one of the highest export revenues per kilogram globally.
This disparity in export composition has wide-ranging consequences. Lower value-per-kilogram exports limit wage growth and reinforce dependency on cheap labor. The result is a cycle of suppressed productivity, environmental degradation, and low investment in R&D and worker welfare. Products from low-cost economies often fail to meet advanced quality standards, making them less competitive in affluent markets and leaving their own citizens with lower-quality goods in areas as essential as nutrition, healthcare, and infrastructure.
This has a direct impact on well-being. India's GDP per capita—only $2,610—is a fraction of Japan's ($35,390), and its quality of life index score (121.3) severely trails Japan's (160.4). The consequences are tangible: a lower average life expectancy (70.4 years vs. Japan's 84.3), higher infant mortality, and significantly worse outcomes in education and public health. Such structural deficiencies exacerbate income inequality, limit upward mobility, and fuel social discontent.
Worse yet, when a nation becomes locked into a low-value export model, it risks drifting toward what some economists term modern economic servitude. Citizens become trapped in cycles of long working hours, precarious employment, and limited access to quality services—all to sustain cheap production for wealthier nations. This is not sustainable growth; it is deferred collapse.
Empirical research supports this perspective. In their study, Philipp Koch and Clemens Fessler tested the Heckscher-Ohlin model using value-added export data. They found that labor-abundant countries tend to export value-added in goods of labor-intensive industries. This suggests that countries with abundant labor resources, like India, are more likely to specialize in labor-intensive, low-value-added exports.
The path to genuine prosperity requires a strategic pivot toward high value-added sectors—those that maximize revenue per unit of resource, not just per head. By raising export value per kilogram through innovation, branding, and quality, nations can break free from the false promise of scale and move toward true human development.
Türkiye's Golden Opportunity
I believe we are entering a golden age—one that's brimming with opportunity but will be short-lived. In this brief window, countries like Türkiye must pivot decisively toward sectors with high added value, particularly in information technology, advanced manufacturing, biotechnology, and green energy.
Encouragingly, progress is being made. But it's not enough. We must double down on policies that shift us from a cost-leadership mindset to a value-leadership strategy.
Technology is our modern gold mine. Instead of digging deeper into cheap labor and fast exports, we should be investing our collective energy into R&D, design, branding, and digital infrastructure. That's how we build long-term wealth—not just for exporters, but for everyone who touches the value chain.
By boosting value-per-kilogram exports, we don't just sell better products—we create better lives.
Sources:
A test for Heckscher-Ohlin using value-added exports
EconPapers: A test for Heckscher-Ohlin using value-added exports
Economic Complexity and Growth: Can value-added exports better explain the link?