In business management theory, the smiling curve is a graphical depiction of how value added varies across the different stages of bringing a product on to the market in an IT-related manufacturing industry.
If this phenomenon is presented in a graph with a Y-axis for value-added and an X-axis for value chain (stage of production), the resulting curve appears like a "smile".
Based on this model, the Acer company adopted a business strategy to reorient itself from manufacturing into global marketing of brand-name PC-related products and services.
"[citation needed] Given the trend of globalization of high-tech product markets, the term "chase, catch, run, jump, touch" can be used to describe the competitive pressures of the industry.
Smile curve theory seeks to show that the success of products is inextricably related to concept, research, brand spreading and marketing.
A key contribution is from Meng Bo, who in his 2020 paper “Measuring Smile Curves in Global Value Chains” applied input-output analysis to map how value-added activities within GVCs are distributed across countries.
Meng's research challenges traditional views of the smile curve by demonstrating that, since 2001, developing countries have become the largest contributors to the growth in total value-added within GVCs, particularly in nations like China.
Meng’s findings highlight the shift in global value creation and responsibility for emissions, offering new insights into both the economics of GVCs and the implications for climate policy.
His work adds depth to the understanding of how GVCs reshape global trade dynamics and the distribution of value across nations, suggesting that the roles of developing countries in both manufacturing and high-value activities are growing.