Remarks by Angel Gurría
Barcelona, Spain - Monday, 25 February 2019
(As prepared for delivery)
Ministers, Ladies and Gentlemen,
“Investing in the Digital Transformation” - we are passionate about this at the OECD!
It gives me great pleasure to be here today with the people that are making this major transformation happen in Latin America! I would like to thank the people behind the Mobile World Congress for organising this very important annual event.
Digitalisation is changing the lives of citizens around the world. The pace of change is extraordinarily high, and in this respect Latin America and the Caribbean are no exception. In the period 2014-2017, mobile broadband penetration in the region rose from 50 to 70 subscriptions per 100 people, bringing many more citizens online for the first time. In just three years!
Digital technologies have huge potential to drive innovation, increase access to information and new markets, expand healthcare through tele-medicine or give new tools to governments to deliver public services more efficiently and with higher quality than ever before. We see smart cities, smart infrastructure, smart houses – the list goes on. And the benefits extend to virtually every aspect of our societies.
But the digital wave also brings new challenges. According to our estimates, 14% of jobs in OECD countries are at high risk of automation, and a further 32% at risk of significant change over the next 10 to 20 years.
Markets are also changing – business dynamism has declined in many countries, and increasing consolidation in European as well as in North American industries may result in some actors obtaining dominant market positions. Our tax systems are also being challenged by increasingly global business models. And what about closer to home? And the impact of digital technology on our families and children? Did you know that about 9% of 15 year-olds say that they have been cyber-bullied. These are challenges that we must face together.
In Latin America, we have another fundamental challenge – digital inclusion. While we recognise the increasing access to mobile broadband in the region, a large proportion of the population remains disconnected. At the end of 2016, nearly 270 million people in Latin America were not connected to the Internet (about 43% of the population).
Additionally, the quality of Internet access for those who are connected is often poor, with only one-fifth of the population of Latin America having a fixed broadband subscription and download speeds severely lagging with respect to the OECD average. For example, the average connection speed in real terms (i.e. not the advertised speed) in Korea is about 29 megabits per second (Mbps) while it is less than 7 in Argentina, Brazil, Colombia and Peru.
For digital transformation to be inclusive, countries must promote broader, more affordable and better quality access to communication networks and services. This is fundamental as universal access facilitates achievement of the UN’s Sustainable Development Goals.
Also, investing in interconnected and converged infrastructures and digital services can help bridge digital divides and foster innovation, as was underlined in the OECD’s own 2016 Ministerial Declaration on the Digital Economy, signed by several LAC countries (for example Argentina, Chile, Colombia, Costa Rica, Ecuador and Mexico).
Many devices, including those that are powered by artificial intelligence (AI), will require real-time transmission of huge amounts of data. As a result, in order to support demand for speed and capacity, it is necessary to invest in the new generation of mobile broadband, 5G, and to continue to deploy fixed infrastructure.
Governments have a key role to play in improving access to fixed and mobile communications networks. The OECD has identified in its studies the issues that countries need to address if they are to boost the availability and quality of broadband services.
The exponential increase in the volume of data carried in communications networks generates new needs for investment in digital transformation. As part of the successful deployment of 5G networks, and as mobile networks become more complementary to fixed networks, the traditional challenges of telecommunications regulation are becoming exacerbated.
Accordingly, streamlining rights of way for infrastructure deployment, efficient spectrum management, the deployment of and access to backhaul and backbone facilities, and new forms of infrastructure sharing, become key. In this respect, policies and regulatory measures that foster competition, promote investment in fixed and mobile networks, and reduce barriers to infrastructure deployment are vital for inclusive digital transformation.
The telecommunications reforms that Mexico successfully introduced in 2013 are a good example of how governments can seize the initiative and move towards more digital economies. The reform, based on OECD recommendations, resulted in almost 50 million additional mobile broadband subscriptions and a massive reduction of prices by as much as 81% between 2013-18 period. I am confident that the OECD’s current review of telecoms and broadcasting in Brazil can help achieve similar outcomes.
On the other hand, the governments of Latin America and the Caribbean must also redouble their efforts to reduce digital divides based on differences in education, gender, income, and geography. As noted in the 2016 Broadband Policies for Latin America and the Caribbean study, published in collaboration with the Inter-American Development Bank, this requires a comprehensive agenda for policies that can help broaden access to digital technologies, addressing both supply and demand issues.
The OECD can and wants to support these efforts. In two weeks’ time, our flagship ‘Going Digital’ project will deliver on its first phase, with an integrated policy framework, new measurement tools, and practical advice on key policy issues in the digital era. Our aim is to put citizens and their needs at the heart of the decision-making process.
In this context, we welcome the openness to reform of Colombia and Brazil, with which we are currently undertaking two “Going Digital” reviews. These reports will focus on facilitating approaches that allow all levels of government to harness the digital transformation.
Finally, the growth of the Internet of Things, AI, and global data flows demands multilateral and strong multi-stakeholder cooperation to address difficult questions such as data governance, privacy, ethics, digital security, as well as tax implications.
The OECD is firmly committed, both within the G20 and the G7, to the international rules aimed at ensuring a level playing field in the digital era. Our work within the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) project, and our efforts to develop principles to foster trust in and adoption of AI, are just two examples that point to our wider vision – to help countries achieve a digital transformation that improves the lives of all their citizens.
Ministers, Ladies and Gentlemen,
Globalisation and the rapid advance of digital technologies are facilitating progress in many areas, but they also are creating new challenges that transcend borders. In order to address them, our countries and organisations such as the OECD must join forces to move together towards inclusive and sustainable digital economies that leave no one behind.
You can count on the support of the OECD at this exciting but challenging time. Thank you.