Economy

Going for new growth

 

More about New sources of growth

OECD countries need growth if they are to emerge from the crisis and create jobs. But where will that growth come from? Also, with challenges such as climate change and global development, how can cleaner, smarter economic activity be unleashed? Answering these questions may help us plot a path out of the crisis and build a safer future.

 

In the early 1960s when the OECD was created, you could buy a portable TV for $150 in the US, around the same price as you'd pay for an entry-level LCD television today. But 60 years ago, an average manufacturing worker would have had to work almost two weeks to pay for it, compared with less than a day at present. For many other products we use all the time, a comparison like this isn't even possible, since they didn't exist. In 50 years from now, there will be similar changes we can't yet imagine, and people may look back on call centres, shopping malls and the like with the same nostalgia presently reserved for the dirty, dangerous jobs of the past and the little shop on the corner with its limited range of overpriced merchandise. Although we can't predict what the future economy will be like in any great detail, we do have some idea about the forces likely to shape that economy and the sectors that could drive growth in the years to come. There may be spectacular inventions due to progress in science and technology and radical new ways of organising our lives and how we produce and consume, but many of the sources of growth will be more mundane. The basic categories won't change much either. We'll still need to be fed, clothed, housed, educated, transported, treated and entertained.

 

So what do we know, or what can we guess with a reasonable degree of confidence? For a start, there will be many more of us. This will be a source of growth in itself for the world economy, especially since people will, on average, be richer than today. And not just in OECD countries. That 1960s TV would have been built in the US, and most of its components would have been American. Since then, new world leaders in consumer electronics have appeared in places like Chinese Taipei, and new economic powerhouses are already emerging across the globe.

 

But emerging countries won't become rich by following the same path as countries that industrialised earlier. The environmental costs would be too high for a start and, to borrow a cliché, there simply are not enough planets to go around for that. Fortunately, new technologies are enabling developing countries to leap forward in their development, the spread of mobile phones being one example, even if the so-called digital divide remains an issue. All countries are now looking for forms of growth that use resources more efficiently. Energy and transport will be among the earliest drivers of greener growth, and this means changes that will affect everything, such as land values, urban planning, farming and where you live. New technologies will play a role in helping the world feed itself too.

 

Apart from being richer, more mobile and more numerous, the population will also be older. But the new old will have grown up with today's technologies, attitudes and social norms. They, or to be more precise, we, will expect to stay in our own homes as long as possible, so personal services, and specially-adapted housing and consumer products are likely to be in demand.

 

Discovering and developing new sources of growth will depend on developing the intellectual assets needed to create, promote, diffuse and adopt the intellectual and material innovations underpinning them. Policymakers have to take a lead, by tapping new sources of growth themselves, and setting the regulatory ground to allow new breakthroughs to happen-and breaking down inertias, whether institutional or economic, that prevent them. But most of all, they have to invest in innovation and skills. The OECD is working hard on areas that can help improve government policy, by setting out innovation and green growth strategies, examining market and regulatory incentives, overseeing rules on biotechnology, and much more. None of this would be possible without knowledge.

 

The roots that allow our future societies to flourish will , as ever, be education, research and training.

 

Recommended links

 

For more on OECD work on innovation and growth, see: www.oecd.org/innovation/strategy

 

Read about “Going for growth and economic policy reforms ” : www.oecd.org/economics/goingforgrowth

 

See more on the OECD programme on the future: www.oecd.org/futures

 

 

 

 

 

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