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OECD 50-YEAR GLOBAL SCENARIO
Policy Challenges for the
Next 50 Years
Rintaro Tamaki
Deputy-Secretary General and Acting Ch...
The OECD will be 100-years old in 2060
What are the policy challenges for the next
50 years?
The OECD 50-Year Global Scena...
Global economic growth will slow
GDP growth
3
Incomes will increase,
but not have converged
GDP per capita as a share of advanced economies’ average level
4
China
India...
5
The global economy will become more
interdependent …
0
5
10
15
20
25
30
35
2010 2060
Per cent
Exports as a share of glob...
…and multipolar as trade shifts to
EMEs, and especially to Asia
Size and share global trade
6
Advanced-
Advanced
25%
Advan...
Emerging economies will move into
higher value-add activities
Value-added shares by sector
7
41%
31%
41%
29%
20% 22%
15% 1...
8
There will be major shifts in specialisation
63%
42%
68%
39%
54% 57%
23%
39%
29%
43%
21%
36%
18%
22%
37%
29%
8%
15%
11%
...
Getting more people into jobs will no
longer be a key growth driver
Ageing populations reduce scope to grow
through an inc...
3 policy challenges
Sustaining growth
Tackling rising inequality
Protecting the environment
10
1. The Growth Challenge
Achieving future growth requires sound policies
Policy needs to support more dynamic, knowledge-
b...
Ageing makes it harder to sustain growth
12
62
64
66
68
70
72
74
76
78
80
1990 1995 2000 2005 2010 2015 2020 2025 2030 203...
Using migration to offset the effects of
ageing will become harder
13
0
50
100
150
200
250
300
Euro area United States
Bas...
2. The Inequality Challenge:
rising income gaps in advanced countries
Ratio of gross wages of the top 90th to the bottom 1...
Growth will reduce income differences
between countries and reduce poverty.
But, by 2060, average inequality in the OECD
a...
3. The Environment Challenge
Million tonnes, CO2 equivalent
2010
48 700 million
tonnes
2060
99 500 million
tonnes
GDP will...
A new approach to policy challenges
Policies need to prepare for a shifting world
The case for structural reform is strong...
The “globalisation paradox”
The global economy will be more integrated so closer
cooperation is needed
The world will be m...
OECD 50-year Global Scenario website
19
Further reading
OECD Economics Department working paper series
OECD 50-Year Global Scenario framework
20
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Policy challenges for the next 50 years

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Policy challenges for the next 50 years

  1. 1. OECD 50-YEAR GLOBAL SCENARIO Policy Challenges for the Next 50 Years Rintaro Tamaki Deputy-Secretary General and Acting Chief Economist 2 July 2014, Tokyo
  2. 2. The OECD will be 100-years old in 2060 What are the policy challenges for the next 50 years? The OECD 50-Year Global Scenario helps to highlight key global challenges and how they are connected Policy Challenges for the Next 50 Years 2
  3. 3. Global economic growth will slow GDP growth 3
  4. 4. Incomes will increase, but not have converged GDP per capita as a share of advanced economies’ average level 4 China India Emerging economies (average) 0 5 10 15 20 25 30 35 40 45 50 2000-2010 2010-2020 2020-2030 2030-2040 2040-2050 2050-2060
  5. 5. 5 The global economy will become more interdependent … 0 5 10 15 20 25 30 35 2010 2060 Per cent Exports as a share of global GDP
  6. 6. …and multipolar as trade shifts to EMEs, and especially to Asia Size and share global trade 6 Advanced- Advanced 25% Advanced- Emerging 42% Emerging- Emerging 33% 2060 Advanced- Advanced 47% Advanced- Emerging 38% Emerging- Emerging 15% 2012
  7. 7. Emerging economies will move into higher value-add activities Value-added shares by sector 7 41% 31% 41% 29% 20% 22% 15% 17% 16% 21% 16% 21% 7% 13% 8% 9% 10% 12% 6% 8% 43% 49% 51% 58% 72% 69% 75% 71% 78% 71% 2010 2060 2010 2060 2010 2060 2010 2060 2010 2060 Services High-skilled manufacturing Other sectors (agriculture, energy and other manufacturing) China India Euro Area Japan USA
  8. 8. 8 There will be major shifts in specialisation 63% 42% 68% 39% 54% 57% 23% 39% 29% 43% 21% 36% 18% 22% 37% 29% 8% 15% 11% 25% 28% 20% 40% 32% 2010 2060 2010 2060 2010 2060 2010 2060 OECD Emerging Asia Rest of world Manufacturing Services Agriculture Energy Shares of global exports by sector
  9. 9. Getting more people into jobs will no longer be a key growth driver Ageing populations reduce scope to grow through an increasing population Innovation and productivity “catch up” will continue to drive growth Increasing education and skills of workers is key 9
  10. 10. 3 policy challenges Sustaining growth Tackling rising inequality Protecting the environment 10
  11. 11. 1. The Growth Challenge Achieving future growth requires sound policies Policy needs to support more dynamic, knowledge- based high value-added economies 11 0 1 2 3 4 5 6 United-States Japan Euro zone China India Per cent 2010-2030 2030-2060
  12. 12. Ageing makes it harder to sustain growth 12 62 64 66 68 70 72 74 76 78 80 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 Per cent European union United States Japan China Population aged 15-74 as a share of the total
  13. 13. Using migration to offset the effects of ageing will become harder 13 0 50 100 150 200 250 300 Euro area United States Baseline Scenario with less immigration Million * Scenario where migration falls due to narrowing income differentials Labour force, 2060
  14. 14. 2. The Inequality Challenge: rising income gaps in advanced countries Ratio of gross wages of the top 90th to the bottom 10th percentile Rising wages for high-skilled workers Incomes of low-skilled in advanced economies fall behind 14 0 1 2 3 4 5 6 7 8 Italy Sweden France Japan Germany OECD - 29 countries United Kingdom Canada United States 2010 2060
  15. 15. Growth will reduce income differences between countries and reduce poverty. But, by 2060, average inequality in the OECD average would be close to current US levels. More investment in education, skills and life-long learning is needed There will be more demand for progressive/redistributive policies, to balance against sustaining growth 15
  16. 16. 3. The Environment Challenge Million tonnes, CO2 equivalent 2010 48 700 million tonnes 2060 99 500 million tonnes GDP will increase to four times its current level The resource pressures will be huge, even if intensity falls 16
  17. 17. A new approach to policy challenges Policies need to prepare for a shifting world The case for structural reform is stronger and more urgent with new challenges All dimensions of well-being will be more connected 17
  18. 18. The “globalisation paradox” The global economy will be more integrated so closer cooperation is needed The world will be multipolar so cooperation could be harder to achieve 18
  19. 19. OECD 50-year Global Scenario website 19 Further reading OECD Economics Department working paper series
  20. 20. OECD 50-Year Global Scenario framework 20

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