Information Technology

Value Chain (2012)

Information Technology Value Chain 2012

Value Chain Description

The Information Technology GVC can be both broad and very specific depending on the intended level of analysis.  The key product and service categories including: semiconductors, computers and communication devices, software and IT services.  In practice all of these can function within the same value chain (very broad), or could each be broken down by specific products (more specific).

  1. Computers, Electronic Communication Devices & Semiconductors: encompasses all hardware assembly, along with peripherals, storage and other components. Semiconductors encompasses the development and production of a variety of chips to serve as inputs for the hardware assembly and telecommunication industries, as well as a variety of non-IT consumer durables.
  2. Software: the development of general and highly specialized operation systems and seemingly countless application programs.
  3. IT Services: include companies that produce services related to systems integration, security, software development, installation, and support.

The figure above represents a very broad mapping of the IT GVC that includes each of the key product and service categories operating in North Carolina. This mapping shows the interrelatedness between firms within the chain, as some firms directly integrate the outputs of other IT firms as inputs for their own business; such as outputs from semiconductor producers and software providers are inputs for the computer-manufacturing sector. However, it is important to recognize that IT products often have multiple applications and defy linear flows. For example, semiconductors or software are used in seemingly countless products beyond computer manufacturing, and can each be sold as standalone products themselves. In another scenario, IT service firms might develop new software solutions to produce a unique product for their clients that may be client specific and not intended for wider commercial application. Furthermore, telecommunications providers provide access to information that can be transmitted via both personal computers as well as a host of other communication technology devices.

Introduction to NCGE Value Chains

Value Chains on the North Carolina in the Global Economy (NCGE)

What is a value chain?
A value chain describes the full range of activities that firms and workers carry out to bring a product or service from its conception to its end use and beyond. This includes activities such as design, production, marketing, distribution and support to the final consumer. The activities that comprise a value chain can be contained within a single firm or divided among different firms and can be contained within a single geographical location or spread over wider areas. For additional background on the origins and research associated with this concept, see the Duke-hosted website,

Value Chain Dimensions
Each industry value chain is composed of three dimensions that work together to produce final products and services for the market. These include:

Value-Added Activities: Value is created in products and services via a series of six steps: research & development, design, production, logistics, marketing and services. Each of these varies in importance based on the industry. In the visual depictions, the top line is composed of the most important value-adding activities for each industry. When you hover the cursor over any “value-adding activities” box information on the activity and its connection to the supply chain appear.

Supply Chain: Each industry has an input-output process that begins with raw materials and continues through the making of components and final products, and finally to distribution and sales. In the value chain visuals, the supply chain is broken into five colors; each representing of the basic stages. When you place your cursor over these boxes, a description of each activity appears along with statistics (based on NAICS codes) on the number of firms, employees and average annual wages per employee in North Carolina (see the Website Overview for information on NAICS codes). The arrows represent the main stages and the boxes listed below represent specific types of products, processes or markets.

Supporting Industries: The supporting environment includes the entities that support and influence actors in the supply chain such as trade and professional associations, government agencies, testing and training facilities, community colleges and universities as well as material and machinery providers. The entities present in North Carolina are located along the bottom row of the visual. When you hover the mouse over these boxes the supply chain stages impacted by the supporting industry is highlighted and statistics or descriptive text is displayed when available.