OECD High-level Parliamentary Seminar on Innovation, Growth and Equity - Annotated Programme

9.00

Welcome coffee

9.30 - 10.00

Opening remarks - Pier Carlo Padoan, Deputy Secretary-General, OECD

Innovation: Advancing the OECD Agenda for Growth and Equity, was the theme of the recent OECD Ministerial Council Meeting.  This seminar will be the occasion to discuss with parliamentarians the main issues, conclusions and mandates coming from this Ministerial. 
OECD Ministers also made important decisions concerning membership of the Organisation and its relations with non-members.  Ministers decided to open accession discussions with Chile, Estonia, Israel, the Russian Federation, and Slovenia. Russia was regarded as a special case because of its historical relationship with the OECD.  They also invited the Secretary-General to strengthen OECD co-operation with Brazil, China, India, Indonesia and South Africa through enhanced engagement programs with a view to possible membership. 

10.00 - 10.15

Overview of innovation and growth (PowerPoint presentation) - Dirk Pilat, Head of Science and Technology Policy Division, Directorate for Science, Technology and Industry, OECD

Much of the increase in globalization over the past decade has been facilitated by innovation and technical change in communication and transportation that have lowered the costs of international trade and enabled digital delivery of a growing range of services. How far will this process go?  Will we see a continued growth in international trade due to innovation, or will we see some goods and services continuing to be provided at the national level? What challenges does this pose for countries? How can they adjust to this continued globalization process? 

Globalisation of research and innovation can be important positive factors for change. Globalisation, such as the growing role of China in science and innovation allows new knowledge and potential solutions to be generated and diffused world-wide. In providing much broader access to global knowledge and in enabling universities, firms and other institutions to collaborate on science and innovation, more and better innovative solutions to global problems can be generated and diffused throughout the world. How can this positive impact of globalization be achieved? Which barriers to the diffusion of knowledge and ideas need to be addressed?

10.15 - 11.00

Discussion

11.00 - 11.20

Strengthening innovation performance (PowerPoint presentation) - Dirk Pilat, Head of Science and Technology Policy Division, Directorate for Science, Technology and Industry, OECD

Much of the rise in living standards in OECD countries is due to innovation – this has been the case since the Industrial Revolution. Today, innovative performance is a crucial factor in determining competitiveness and national progress. Moreover, innovation is of growing importance in dealing with important global challenges, such as climate change and the environment. However, OECD countries have seen little improvement in productivity performance in recent years despite the new opportunities offered by globalisation and new technologies, especially.  Policy reforms are needed to strengthen innovation and productivity. Improving the business environment for innovation is especially important, as business is the main driver of innovation.  Further liberalisation of the services sector and of network industries could encourage innovation in these activities.  More innovation-friendly regulatory regimes, combined with lower barriers to trade and foreign direct investment (FDI), would increase competition and the flow of technology and knowledge across borders.  Reform of labour markets, notably of strict employment protection legislation, would help firms adjust and allow them to draw greater benefits from their investment in innovation and technology. The reform of financial markets can also boost innovation and growth, including by helping to reduce the financing gaps faced by some innovative small firms.  Investment in innovation would be encouraged by deeper and more efficient venture capital markets and easier access to external finance.  Improving disclosure of intangible assets could also ensure a better allocation of capital.

Implementing the reforms to foster innovation will require strong political leadership. Some of them may affect vested interests, such as in universities and scientific institutions, as well as in businesses sheltered from competition or benefiting from public support, or confronted by technology-induced structural change.  Strong political leadership and efforts to develop a clear understanding by the various stakeholders of the problems and the solutions – including the costs they involve – can all help to communicate the need for reform and facilitate acceptance. Policy coordination is also essential – only a comprehensive and wide-ranging strategy to foster and strengthen innovation can help address social goals while building a lasting foundation for future economic growth and competitiveness.

What policies can foster stronger innovation performance? How can innovation help in addressing global challenges such as climate change?

11.20 - 12.30

Discussion

12.30 - 14.00

Lunch

14.00 - 15.30

Globalisation: how does it impact on OECD workers and societies?

14.00 - 14.15

          OECD workers in the global economy -- Increasingly vulnerable? (Presentation PowerPoint) - Paul Swaim, Principal Administrator, Division for Employment Analysis and Policy, Directorate for Employment, Labour and Social Affairs, OECD

Some workers may lose from globalisation, as is evident in the case of workers who lose their jobs due to rising imports. With the rapid adoption of information and communications technology, it is easier to outsource certain tasks to other countries. This "unbundling" has extended to domestic activities where workers were once sheltered from direct international competition. Even where globalisation has not created an overall shortage of jobs, workers may have had to make concessions on wages or working conditions to remain employed. The rapid integration of large, low-wage countries like Brazil, China, India and Russia into the world economy has also exacerbated anxieties that the living standards of OECD workers may be at risk. Indeed, the wage share of national income has tended to fall (and the profit share to rise) in most OECD countries, even as foreign competition has made employers more sensitive to international differences in labour costs. Persistence of high and/or growing inequalities alongside the risk of job loss is an economic and social problem which may also weaken support for globalisation.

14.15 - 14.30

          Income distribution in a more globalised world -- Increasing unequal? - Marco Mira d'Ercole, Principal Administrator, Social Policy Division, Directorate for Employment, Labour and Social Affairs, OECD

In many OECD countries, globalisation is occurring amid growing perceptions that many workers are not receiving their fair share of the gains from international economic integration, and that those individuals not equipped with the right skills and competencies are experiencing absolute declines in their standard of living. These concerns need to be taken seriously, inter alia because they affect the political support for globalisation. How has earnings inequality evolved during the past several decades in OECD countries? Is there evidence of a growing pay gap between high and low earners, and is this gap translating into higher income inequality across households? What are the factors driving these developments? Can domestic social policy still make a difference or is globalisation undermining their efficacy or sustainability?

14.30 - 15.30

Discussion

15.30 - 15.45

Coffee

15.45 - 17.00

Globalisation: what type of social and employment policies are needed?

15.30- 15.45

          Best-practice policy responses -- The OECD perspective - Paul Swaim and Marco Mira d'Ercole, Directorate for Employment, Labour and Social Affairs, OECD

The quality of policies and institutions affect the actual impact of globalisation. Indeed, the recent experience of OECD countries shows that globalisation is compatible with high employment rates and rising living standards when the right domestic policies are in place. A good policy response need to be comprehensive, involving both product and labour markets, and it requires more effective employment and social policies. Reducing barriers to business start-ups and growth improves the economy’s capacity to seize the new opportunities arising from globalisation, and helps re-employ displaced resources in those firms and sectors where they can contribute most. Reforms to social and employment policy can increase the capacity of labour markets to adjust to the structural changes and better respond to the needs of affected workers. For example, some countries have succeeded in providing adequate welfare benefits, which represent an essential safety net for trade-displaced workers, while at the same time promoting a more rapid return to employment through flexible labour markets and strong job-search obligations. Providing sufficient training opportunities so as to ensure that all workers have adequate skills also reduces adjustment costs. Welfare-to-work programmes are needed to assist benefit recipients to move into jobs, while welfare-in-work programmes are essential if disadvantaged people are to keep these jobs and make progress in their careers. Putting such measures into place will help to assure that the gains from globalisation are maximised and broadly shared. By responding to the concerns of ordinary citizens, these measures will also help to sustain political support for globalisation.

15.45 - 17.00

Discussion and conclusion