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OECD Digital Economy Outlook 2017: Setting the foundations for the digital transformation

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The Digital Economy Outlook 2017 shows how Internet infrastructure and usage varies across countries and firms in the OECD area. It looks at policy implications of the digital transformation as well as a wide array of trends. Report available at http://oe.cd/deo2017 - See also the OECD Going Digital project: www.oecd.org/going-digital

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OECD Digital Economy Outlook 2017: Setting the foundations for the digital transformation

  1. 1. OECD DIGITAL ECONOMY OUTLOOK 2017 Seoul, 11 October 2017 Andrew Wyckoff, Director Directorate for Science, Technology and Innovation Setting the Foundations for Digital Transformation
  2. 2. IBM 360 (1964) – the first commercial mainframe Digitalisation is not new…
  3. 3. 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.
  4. 4. 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 …
  5. 5. … with artificial intelligence creating promising opportunities …
  6. 6. „ … 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.
  7. 7. To seize the benefits of the digital transformation, we need to set the right foundations
  8. 8. The foundations for digital transformation Connectivity Effective use Policy review Enhanced security Policy co-ordination
  9. 9. Connectivity keeps improving with falling average prices and fast growth in mobile data usage
  10. 10. 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
  11. 11. … 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
  12. 12. 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
  13. 13. … 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
  14. 14. Infrastructure and connectivity are not enough: governments must foster more effective use of advanced digital technologies
  15. 15. 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
  16. 16. … 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%
  17. 17. 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
  18. 18. 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
  19. 19. … 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
  20. 20. … 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
  21. 21. In particular firms could make better use of advanced ICT tools to boost productivity
  22. 22. 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
  23. 23. … 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 Cloud Computing E-sales Big Data RFID % Gap 1st and 3rd quartiles Average Lowest Highest Korea
  24. 24. To navigate the digital transformation, governments should review legacy frameworks, embrace digital innovation, and mitigate potential social cost
  25. 25. 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.
  26. 26. … 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
  27. 27. … 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
  28. 28. … 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
  29. 29. For the digital transformation to spur growth and social prosperity, countries need governance model that achieves coherence and effective co-ordination
  30. 30. 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
  31. 31. 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 affairs 15 2 13 Several ministries, bodies or institutions 6 14 5 Multiple public and private stakeholders 1 17 0
  32. 32. GOING DIGITAL Making the Transformation Work for 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?
  33. 33. 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
  34. 34. 고맙습니다 !

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