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OECD Secretary-General

Launch of “Going Digital in Colombia” Review

 

Remarks by Angel Gurría

OECD Secretary-General

25 October 2019 - Bogotá, Colombia

(As prepared for delivery) 

 

 

 

Minister Constaín, Ladies and Gentlemen,


I am delighted to be in Bogotá to launch the OECD Review of Digital Transformation: “Going Digital in Colombia”. I would like to thank the Colombian government for its support and commitment to this ambitious project.


This study is a follow-up to the OECD's horizontal "Going Digital" series, which we presented in March and which aims to help policy-makers in facilitating the transition to an increasingly digital economy.

 

Leveraging digital transformation

In recent years, Colombia has been growing fast and converging to higher living standards. Average annual growth rates have been among the highest in Latin America and the Caribbean, and in fact much higher than the OECD average. Between 2008 and 2017, Colombia's GDP grew by an average of 3.8% in real terms, compared to the OECD average of 1.7%. According to the 2019 Economic Survey of Colombia, which I launched yesterday, growth will continue to be strong in 2019 and 2020, increasing to around 3.5%.


Digital transformation is already driving this growth, and the Colombian government has taken significant measures to leverage the opportunities provided. In 2018, it adopted the Pacto por la Transformación Digital de Colombia. In 2019, it introduced the El Futuro Digital es de Todos plan, and only a few months ago it passed a law to modernise the information and communication technologies sector (ICT). These instruments will increase the number of Colombian households and businesses with broadband access, and help to close the digital divide.


Despite these advances, Colombia still faces a number of structural challenges that are affecting its ability to take advantage of the benefits of digitisation.


One crucial area is education. According to the OECD’s Education at a Glance 2018 report, almost two out of three Colombian students do not have basic skills in reading and mathematics, compared to the OECD average of one in five. At the same time, only one half of Colombian adults have attained secondary education, compared with an average of three quarters of OECD adults. Similarly, the level of English proficiency in Colombia is still low compared to other Latin American countries. English proficiency is another key element in promoting the use of digital technologies and greater connectivity.


Furthermore, levels of informality in Colombia are high (with an informal employment rate close to 50%). Informality has a negative impact on the ability of workers to improve their digital skills and abilities, as well as on incentives to innovate and to increase the resources available to finance such innovation.


Successfully overcoming these challenges to modernising the economy is crucial in order to fully insert Colombia into digital transformation. Over and above the challenges which are an inherent part of inclusive development, our review highlights three critical lines of action if full advantage of this transformation is to be taken.

 

First, a National Digital Strategy

The first line of action is the development of a National Digital Strategy that establishes a long-term vision with clear objectives to help people, businesses and institutions to embrace digital transformation. The Strategy should be developed by the government through a process involving all stakeholders, including representatives of the corporate word and academia. Secondly, the government should submit the proposal for public consultation and put together a final proposal based on the outcome, thus ensuring an inclusive process.


In order to ensure the success of this Strategy, Colombia needs to dedicate resources to it. Only 1.5% of the provisional budget for 2019-22 is allocated to the Pacto por la Transformación Digital, which is mostly financed out of a tax aimed solely at the telecommunications sector. Digitisation policies provide benefits for all sectors of the economy and society, and as such, they should be financed out of the general government revenue.


In this regard, it is essential to strengthen the role of the Intersectoral Commission for the Development of the Digital Economy as the co-ordinating body responsible for implementing and monitoring the Strategy.

 

Second, competition in telecommunication

Second, it is essential to increase competition in the telecommunication sector. Concentration in the telecommunication market remains high. The three main operators account for around 73% of the country's broadband connections. In mobile data services, the concentration is even greater, as a single company absorbs about 54% of prepaid data lines.


This lack of competition translates into higher prices. According to the OECD review, a fixed high-consumption Internet package in Colombia costs 2.5 times what is paid on average in other countries. This limits connectivity levels of Colombians. In fact, despite a significant increase in connections in recent years, Colombia still has the lowest broadband penetration in OECD countries, with 52 mobile subscriptions and 13 fixed subscriptions per 100 inhabitants, compared to an OECD average of 110 mobile subscriptions and 31 fixed subscriptions per 100 inhabitants.


The upcoming multiband auction in December has the potential to level the playing field in the market, to the extent that companies that do not have spectrum in the lower frequency bands have a fair chance to obtain licenses in those bands. In addition, the auction may contribute to extending much needed coverage in Colombia.


To underpin competition, it is also of utmost importance to preserve the independence of the new "converged regulator", which oversees the telecommunications and broadcasting sectors; to guarantee its autonomy, including its financial autonomy; and to ensure that its governing body is appointed through transparent merit-based mechanisms. The review presents other key recommendations.

 

Third, prepare the workforce for digital transformation

Third, many Colombians still lack basic computer skills and abilities. A quarter of those using a computer are unable to send emails with attachments, and a third are unable to connect other devices, such as printers.


In order to meet the labour needs of the future, it is necessary to continue to invest in general education, adult learning and lifelong learning.
Some programmes, like Computadores para Educar, have been successful in providing Colombian schools with computers and in offering ICT training to teachers and parents. These programmes, however, need new sources of funding and should also be extended to working-age individuals seeking employment.


For workers who have been displaced by digitisation, our review suggests leveraging digital opportunities to improve active labour market policies and social protection. The use of big data could help Colombia improve the match between labour supply and demand, make social protection more effective, and reduce informality in the labour market. It is also important to continue using digital technologies to simplify business and worker registration, with initiatives such as the Ventanilla Única Empresarial.


Ladies and gentlemen,


Digital transformation is changing the future of our countries. It must be made to change our present. Colombia has made, and continues to make, great efforts to fully enter digital transformation. We must step up the pace but always bear in mind that while digitisation can be an effective instrument for development, it is policies, regulatory frameworks, institutions, competition, and training that determine its effectiveness.


The OECD is ready to continue supporting Colombia in its effort to design, develop and deliver better digital policies to promote the inclusive and sustainable growth that all Colombians deserve. You can count on us! Thank you.

 

 

See also:

Press Release: Colombia must boost digital transformation and take further steps to ensure benefits are shared by all

OECD work on Going Digital

OECD work with Colombia

 

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