Employment

“Unprecedented Unpredictability: Digital Transformation – The Future of Jobs and Trade in a Digitalised World”

 

Opening Remarks by Angel Gurría

OECD Secretary-General

Paris, 28 November 2017 

(As prepared for delivery)

 

 


Dear Ministers, Deputy Ministers, Ambassadors, Ladies and Gentlemen,


Welcome to our 2017 Global Strategy Group. I would like to thank Mr Ulrik Vestergaard for his work as Chair for the fifth time.
 

This discussion comes at a critical time. The digital transformation is a rising tide. It is affecting our lives in profound ways that we could not have imaged only a few years ago. This is presenting us with both opportunities and challenges and over the next two days you will be focusing on many of these issues, from harnessing digital for inclusive growth, to the effects of digitalisation across borders in areas such as taxation, trade and competition.

 

The digital transformation is creating incredible opportunities!

There is no doubt that the speed of the digital transformation is creating unprecedented opportunities for our economies and our societies. It is literally changing the way we think, the way we live, and the way that we look at the future.

 

The digital transformation is creating opportunities for new business models and markets both domestically and internationally. The use of data and platforms is not only good for business but also for societal well-being. For instance, in the healthcare sector. According to one estimate, more than 165 000 mobile-health apps were available in 2015 - a figure that had doubled since 2013. We know the potential of the wider use of Big Data, and we need to make it happen while redoubling attention to issues regarding private data, data security and availability, and competition.

 

In addition, the digital transformation has the potential to help us tackle multiple policy objectives of direct benefit to society and to the planet. Mobile apps are already helping to deliver development aid and connect refugees with families willing to host them or support them. Big data analytics is enabling precision agriculture, providing real-time analysis to share with other farmers and making processes like irrigation far more efficient. Other automated systems such as driverless trucks, for example, are predicted to improve road safety, lower emissions and reduce operating costs for road freight by 30%, according to a recent ITF study. These are exciting prospects.

 

But digitalisation is also creating policy challenges

But despite these opportunities, the digital transformation is also creating uncertainty and challenges. We still continue to seek the same fundamental policy goals, striving for inclusive and sustainable economies and well-being for all. But the way to reach these goals is evolving. Governments and society are facing new sets of challenges. Let me touch upon some of them:


The digital transformation is contributing to a rethink of the organisation of work. Already in 2013, non-standard work accounted for a third of our total employment. Today, freelance websites and the “platform” economy – though still small – are growing. While this can bring flexibility and new opportunities to some, we must also be mindful that these changes may also lead to lower job quality. Ensuring the digital transformation supports a better and more inclusive labour market will be a major focus of the new OECD Jobs Strategy, which will be launched at the MCM in 2018.


Another key challenge is that technology is moving faster than our bureaucracies. The industrial revolution took place over a century while the digital revolution is occurring over a generation and could accelerate further.


Digitalisation and the spread of technologies are accelerating globalisation. It is eroding the effectiveness and leverage of domestic policies in many areas and calling for greater international collaboration.


The digital transformation is also testing our governments as it transcends ministerial portfolios. Every policy area today has to focus on issues such as digital security and privacy, or the role of data. Decisions in one policy area can have unexpected implications for others. That's why our agenda today and tomorrow is so wide - no policy area is untouched by this profound transformation.


And digitalisation is creating specific challenges for inclusive growth. It will displace workers. Based on current technology, the share of jobs at a high risk of automation ranges from less than 10% in the US, the UK and Nordic countries, to around 14% on average in OECD countries in some of our most recent estimates. These may not seem very big but we are talking about millions of jobs. This new reality is creating questions such as: How can we assist workers at high risk of displacement? What new jobs will emerge and what skills are needed to strengthen people's resilience to cope with these changes?


Also too many firms, especially SMEs, are not fully harnessing digital technologies and risk being left behind. For example, only some 40% of large firms and 20% of all firms in OECD countries are engaged in selling via e-commerce. The widening of productivity differences across OECD countries between leading and lagging firms and regions suggests that many firms are not yet able to turn the potential of digital technologies into stronger productivity performance.


Last but not least, in terms of spreading opportunity, we should not forget that while digital technologies are increasingly empowering people in developing countries (not least through mobile phone payments), there is a long way to go before the infrastructure, skills and education foundations that support a globally inclusive digital transformation are fully in place.

 

The need for international co-operation and a whole-of-government approach

Addressing many of these questions will require solid international dialogue along several fronts as the essence of the digital market is that it cannot be stopped at national boundaries. It is global by nature! In this context, our discussion on standard setting tomorrow over breakfast is crucial.

 

We need, for example, to review the consequences of e-commerce and of digital trade on different trade regimes. We also need to address collectively the concerns that have arisen with the growing exchange of data across countries on security issues, the protection of privacy, intellectual property rights and audit, among others.

 

We must also focus on addressing the challenging issues in the BEPS project related to tax equity across firms and raised by digitalisation. And we need to understand to what extent digitalisation is creating new network effects, particularly where the concentration of users and data favour the emergence of dominant firms and therefore undermine equity, competition and investment.

 

At the same time, we should be making full use of the opportunities created by digitalisation to collectively address global challenges and to achieve the Sustainable Development Goals. The Internet of Things, for example, will generate data which will provide us with the ability to better monitor the environment, optimise traffic, improve agricultural yields and measure changes in the oceans. We need to move from global governance 1.0 to global governance 4.0!

 

In many respects, the OECD's Going Digital project comes at a key moment as it provides a sound basis for a truly cross-disciplinary and cross-policy debate on many of these questions that we are asking.

 

Ladies and gentlemen,

We find ourselves at an important juncture and we must take full advantage of this unique opportunity.


In this respect, this year’s GSG is an ideal setting for us to promote an evidence-based and whole-of-government approach when assessing the opportunities and the challenges of digitalisation. Our meeting today and tomorrow will help advance discussions in substantive committees. You and your countries’ leaders can make the decisions that allow a promising digitalised future to emerge for everyone. Thank you.