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An opportunity that governments should not miss OECD Going for Growth 2018

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An opportunity that governments should not miss OECD Going for Growth 2018

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An opportunity that governments should not miss OECD Going for Growth 2018

  1. 1. http://www.oecd.org/eco/going-for-growth/ An opportunity that governments should not miss Buenos Aires, 19 March 2018 Economic Policy Reforms: Going for Growth 2018 @OECDeconomy @OECD
  2. 2. Global growth is back to cruising speed 2 Real GDP, year-on-year growth 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 2003- 07 2011- 15 2016 2017 2018 2019 2003- 07 2011- 15 2016 2017 2018 2019 2003- 07 2011- 15 2016 2017 2018 2019 World G20 Advanced G20 Emerging Per cent Note: Average of annual growth rates for 2003-07 and 2011-15. OECD Projections for 2018 and 2019. Source: OECD, Interim Economic Outlook, March 2018.
  3. 3. 3 Jobs are being created Employment rate Note: All persons aged 15-64 years. Source: OECD Short-Term Labour Market statistics; and OECD calculations. Euro area United States Japan
  4. 4. 4 More rapid job gains are benefiting all groups Source: OECD Employment database. Employment rate 84 86 88 90 92 94 96 98 100 102 104 84 86 88 90 92 94 96 98 100 102 104 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 15-24 year-olds 25-64 year-olds Low skilled (below upper secondary education) High skilled (tertiary education) Employment as % of population in the group (2007=100)
  5. 5. 5 But most people in many OECD countries have seen little or no income growth for a decade Household real disposable income OECD average Note: The OECD average is a simple average of the 17 OECD member countries for which data is available for the whole period. Source: OECD Income Distribution database; and OECD calculations. Top 10% Bottom 10% Median
  6. 6. 6 Source: OECD Economic Outlook database; and OECD calculations. Rising depreciation rates are holding down net investment in productive capital Investment as per cent of productive capital stock Gross investment is coming back, but net investment is still weak -1 0 1 2 3 4 5 6 7 8 9 DEU FRA GBR ITA JPN USA % A. Gross investment 2014-16 1997-07 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 DEU FRA GBR ITA JPN USA % B. Net investment 2014-16 1997-07
  7. 7. The take-up in digital technologies is uneven 0 20 40 60 80 100 0 20 40 60 80 100 Broadband E-purchases Cloud computing E-sales Big data RFID Median Diffusion of selected ICT tools and activities in enterprises, OECD countries, 2016 Note: Radio frequency identification (RFID) is a technology that enables contactless transmission of information via radio waves. RFID can be used for a wide range of purposes, including personal identification or access control, logistics, retail trade and process monitoring in manufacturing. For RFID, data refer to 2014.
  8. 8. The widening productivity gap - particularly in digitally-intensive services Average of MFP across 2-digit sectors (log, 2001=0) ICT-intensive services Non ICT-intensive services -0.2 0.0 0.2 0.4 0.6 0.8 1.0 Frontier firms Laggards Top 10% Top 2% -0.2 0.0 0.2 0.4 0.6 0.8 1.0 Frontier firms Laggards Top 10% Top 2% Source: Andrews D., C. Criscuolo and P. Gal (2016), The best versus the rest: the global productivity slowdown, divergence across firms and the role of public policies, OECD Productivity Working Papers No.5
  9. 9. The pace of structural reform is modest 9 Responsiveness rates to Going for Growth recommendations Fully coloured bars refer to the share of fully implemented reforms Note: The estimated rate of responsiveness is captured by the Going for Growth indicator of reform responsiveness. For 2017, reforms in the process of implementation are included to ensure comparability with previous two-year periods. Emerging economies include Chile, Mexico, Turkey, Argentina, Brazil, China, Colombia, Costa Rica, Indonesia, India, Russia and South Africa. Advanced economies include all non-emerging OECD member countries and Lithuania. 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 2011-12 2013-14 2015-16 2017 2011-12 2013-14 2015-16 2017 Per cent In process of implementation In process of implementation
  10. 10. The Going for Growth priority selection framework
  11. 11. Promote business dynamism and the diffusion of knowledge Firms Unlock skills development and innovation capacity Skills Help workers benefit from a fast-changing labour market Workers 3 broad categories of recommendations • Barriers to entry, competition, exit, trade and FDI, • Structure and efficiency of the tax system, • Legal and physical infrastructure • Primary and secondary education • Higher education and VET • R&D policies • A more inclusive labour market (gender, migrants, low-skilled, etc.) • ALMPs and social benefits • Labour mobility and health sector • Labour market regulation
  12. 12. GfG 2017 priorities to achieve strong, inclusive growth remain valid 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Percentage Skills Workers Firms Going for Growth 2017 reform recommendations
  13. 13. Reform progress is slow on education 13 Reform intensity by area Share of implemented Going for Growth recommendations, selection of largest reform areas Note: share of recommendations in total recommendations presented on the left margin. 0 10 20 30 40 50 60 70 80 90 100 Regulation and organisation of the labour market Active labour market policies and Social benefits A more inclusive labour market (gender, minorities, migrants, low-skilled) Physical and legal infrastructure Tax structure Barriers to entry, competition, trade and FDI R&D and innovation Higher, vocational and training Primary and secondary education 4%10%13%10%10%24%5%11%8% WorkersFirmsSkills Fully implemented and in process of implementation Limited steps or no action taken
  14. 14. Some significant actions were taken (examples) Promote business dynamism and the diffusion of knowledge Firms Countries with significant actions taken (including in-progress) Tax structure Physical and legal infrastructure Barriers to entry, exit, competition, trade and FDI (small) measures in a large number of countries
  15. 15. Unlock skills development and innovation capacity Skills Some significant actions were taken (examples) Countries with significant actions taken (including in-progress) Primary and secondary education Higher education and vocational education and training (VET) (small) measures in a number of countries R&D policies (small) measures in a number of countries
  16. 16. Help workers benefit from a fast-changing labour market Workers Some significant actions were taken (examples) Countries with significant actions taken (including in-progress) A more inclusive labour market (gender, minorities, migrants, low-skilled…) Active labour market policies and social benefits , health and mobility GRC, ITA, CHN, GBP, FIN Regulation and organisation of the labour market (EPL, minimum wages, wage bargaining, taxation) FRA, KOR,
  17. 17. Reforming across several dimensions can bring synergies Actions taken across several areas of Going for Growth recommendations Fully implemented and partially implemented reforms, share of all countries (%) 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 Skills & Workers & Firms Skills & Workers Firms & Workers Firms & Skills Advanced economies Emerging economies
  18. 18. Countries tend to reform across several areas At least one action taken on each recommendation category Fully implemented and partially implemented reforms, share of all countries (%)
  19. 19. • Favourable economic conditions for reforms should not be wasted. • In 2017, the pace of reforms is modest in both advanced and emerging economies, but some bold actions have been taken. • The intensity of reforms has varied across policy areas: – In promoting business dynamism and knowledge diffusion (“firms”): several significant measures on infrastructure and taxes but less on barriers to entry, competition, exit and trade. – Not much in boosting higher education and innovative capacity (“skills”), – Significant reforms in helping workers to cope with potentially rapid changes in jobs and tasks (“workers”). • A coherent reform strategy is crucial to reap synergies, manage trade-offs and ensure that the benefits are broadly shared over time. OECD Going for Growth 2018: Main findings
  20. 20. http://www.oecd.org/eco/going-for-growth/ For more information Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

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