OECD DIGITAL ECONOMYOUTLOOK2017

Seoul, 11 October 2017

Andrew Wyckoff, DirectorDirectorate for Science, Technology and Innovation

Setting the Foundations for

Digital Transformation

IBM 360 (1964) – the first commercial mainframe

Digitalisation is not new…

0

50

100

150

200

250

300

350

Millions Smartphones Other mobile phones

Quarterly shipping trends of smartphones, 2010-13

Sources: www.washingtonpost.com and OECD Broadband Portal

2005 2013

http://pages.experts-exchange.com/processing-power-compared/

… but the advent of ubiquitous

computing is.

Autonomous machines and

systems

Artificial Intelligence

Cloud computing

Human-Machine

integration

System integration

Internet of Things

Big data

Simulations

Additive manufacturing(3D printing)

It fuels a bigger ecosystem that is

driving digital transformation …

… with artificial intelligence creating

promising opportunities …

„ … to ensure everyone benefits fromt the digital revolution.“

„Shaping Digitalisation for an Interconnected World.“

„To unleash the potential of digital economy ...“

… propelled to the top of the global

policy agenda.

To seize the benefits of the digital

transformation, we need to set

the right foundations

The foundations for digital

transformation

Connectivity

Effective use

Policy review

Enhanced security

Policy co-ordination

Connectivity keeps improving with

falling average prices and fast

growth in mobile data usage

Fixed broadband subscriptions are

growing …

Fixed broadband subscriptions, December 2016

By technology per 100 inhabitants

0

5

10

15

20

25

30

35

40

45

50

55

DSL Cable Fibre Satellite Fixed wireless Other

… but fibre is still low in many

countries.

Fixed broadband subscriptions, December 2016

Fibre connections per 100 inhabitants

0

5

10

15

20

25

30

35

Prices for fixed and mobile

broadband keep falling …

OECD trends in fixed and mobile broadband prices, 2013-16

0

5

10

15

20

25

30

35

40

45

50

June 2013 Sept 2014 Sept 2015 June 2016

USD PPP

Fixed broadband

200 GB 20 GB 200 GB Korea

0

10

20

30

40

50

60

70

80

90

May 2013 May 2014 Aug 2015 May 2016

USD PPP

Mobile broadband

100 calls + 500 MB 300 calls + 1 GB

900 calls + 2 GB 900 calls + 2 GB Korea

… mobile data usage is growing fast

with a few countries pressing ahead.

Top five countries in mobile data usage

Gigabytes per mobile broadband subscription per month

0

2

4

6

8

10

12

2010 2011 2012 2013 2014 2015 2016

GB Finland Latvia Austria Sweden Denmark

Infrastructure and connectivity are

not enough: governments must

foster more effective use of

advanced digital technologies

The young and educated are leading

on Internet usage …

Internet users by age and educational attainment, 2016

As a percentage of the population aged 16-24

55

60

65

70

75

80

85

90

95

100

B. Among individuals aged 16-24%

High All Low

… while elderly and less educated

individuals lag behind.

Internet users by age and educational attainment, 2016

As a percentage of the population aged 55-74

High All Low

0

10

20

30

40

50

60

70

80

90

100

A. Among individuals aged 55-74%

Governments must step up efforts to

empower people with the skills

needed to succeed in a digital world

and broaden access to digital

opportunities for all actors

Generic ICT skills are already much

in use, but often insufficient …

0

10

20

30

40

%

All users Of which users with insufficient ICT skills

Workers using office productivity software at work every day

As a percentage of total population

… and digital transformation raises

demand for ICT specialists …

Rank Job

1 Skilled trade workers

2 IT staff

3 Sales representatives

4 Engineers

5 Technicians

6 Drivers

7 Accounting and finance staff

8 Management/executives

9 Production/machine operations

10 Office support staff

Top ten jobs that employers have difficulty filling, 2016

… who are still rare in many

countries and mostly male.

ICT specialists by gender, 2016

As a percentage of all male and female workers

0

1

2

3

4

5

6

7

8

9

10

%

Male Female

In particular firms could make better

use of advanced ICT tools to boost

productivity

50

60

70

80

90

100

% All enterprises 10-49 50-249 250+ All enterprises, 2010

Almost all firms are connected …

Enterprises’ broadband connectivity, by firm size, 2016

As a percentage of enterprises in each employment size class

… but firms could make greater use

of advanced ICT tools.

Diffusion of selected ICT tools and activities in enterprises, 2016

As a percentage of enterprises with ten or more employees

0

20

40

60

80

100

Broadband Website E-purchases ERP CRM CloudComputing

E-sales Big Data RFID

%

Gap 1st and 3rd quartiles Average Lowest Highest Korea

To navigate the digital transformation,

governments should review legacy

frameworks, embrace digital innovation,

and mitigate potential social cost

I don’t need a car, I need mobility.

Digital innovation enables new business

models, driving change in entire sectors …

I don’t need a postman, drones can do the job.

I don’t need an employer, I can use a platform.

I can afford this house,by renting it out.

… making new forms of work more

common …

0

5

10

15

20

25

30

35

40

45

50

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Million

Registered users on Upwork and Freelancer

… exposing gaps in public policies

designed for an earlier era …

Benefit rules for the self-employed vs. standard workers, 2010

Source: OECD (2015), In It Together: Why Less Inequality Benefits All, OECD Publishing, Paris.

Old age, invalidity Health Accidents Unemployment Family

Australia

Austria

Canada

France

Germany

Italy

Japan

Korea

Mexico

Portugal

Turkey

United Kingdom

United States

No benefit

Optional enrolment

Different rules from standard workers

Same rules as the general scheme

27

… and challenges that governments

need to face.

Governments’ main challenges to achieve digital policy objectives

Main challenges in 2017 Main challenges next 3-5 years

Awareness, implementation, enforcement 1 Co-ordination

Skills, training, education 2 Skills, training, education

Co-ordination 3 Public investment or funding

Policy design and measures 4 Technical, including standards and interoperability

Laws or regulation 5 Trust, including privacy, security, consumer protection

Technical, including standards and interoperability 6 Laws and regulation

ICT adoption, business digitalisation, innovation 7 Policy design and measures

Public investment or funding 8 ICT adoption, business digitalisation, innovation

Private investment or access to finance 9 Private investment or access to finance

Trust, including privacy, security, consumer protection 10 Awareness, implementation, enforcement

For the digital transformation to spur

growth and social prosperity,

countries need governance model

that achieves coherence and

effective co-ordination

Governments have many objectives,

but need priorities and coherence

MAIN DIGITAL POLICY OBJECTIVES

Strengthening e-government services

Further developing telecommunication infrastructure

Promoting ICT-related skills and competences

Strengthening security

Enhancing access to data, including PSI and OGD

Encouraging the adoption of ICTs by businesses and SMEs in particular

Encouraging ICT adoption in specific sectors, e.g. healthcare, education

Strengthening privacy

Strengthening digital identities

Promoting the ICT sector, including its internationalisation

Promoting e-commerce across the economy

Tackling global challenges, e.g. Internet governance, climate change

Strengthening consumer protection

Advancing e-inclusion, e.g. of elderly and disadvantaged groups

Preserving Internet openness

Governments also need an effective

model for co-ordination

National digital strategy governance

Number of countries that have allocated respective responsibilities

Lead the development

Contribute input

Co-ordinate

Government, e.g. Prime Minister, Presidency, Chancellery, etc.

4 0 5

Digital affairs ministry or body or ministerial position 8 1 10

Ministry or body not dedicated to digital affairs15 2 13

Several ministries, bodies or institutions6 14 5

Multiple public and private stakeholders1 17 0

GOING DIGITAL

Making the Transformation Workfor Growth and Well-being

Understand the digital transformation and its impacts on the economy and society

Provide policymakers with the tools needed to develop a forward-looking, whole-of-government policy response

Help overcome the gap between technology and policy development

WHAT’S NEXT?

Digital Economy Outlook 2017

OECD i-library

www.oecd-ilibrary.org

Twitter @OECDinnovation

OECD Science, Technology and Innovation

www.oecd.org/sti/ieconomy/

OECD Broadband Portal

www.oecd.org/sti/broadband/oecdbroadbandportal.htm

OECD Going Digital project

http://oe.cd/goingdigital

OECD ICT usage database

http://dotstat.oecd.org

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