OECD Digital Economy Outlook 2024 (Volume 2)

Executive Summary

Rapid technological changes characterise the most recent phase of digital transformation, bringing opportunities and risks for the economy and society. Volume 1 of the OECD Digital Economy Outlook 2024 offered insights on key technologies that underpin digital transformation and their impacts. Volume 2 examines new directions in digital priorities, policies and governance across countries. It further analyses trends in the foundations that support digital transformation, drive digital innovation and foster trust in the digital age. A Statistical Annex completes the volume.

Key findings

National digital strategies are changing quickly, with dedicated digital ministries playing a more important role in their design and co-ordination

Digital government, connectivity and skills were the top three digital policy priorities in 2023 for 38 OECD countries and partner economies. National digital strategies, increasingly developed at a high level of government, are the primary approach to co-ordinating digital policies. A dedicated digital ministry designed almost half of the national digital strategies of the 38 countries surveyed in 2023, up from just under a quarter in 2016. Among the almost 1 200 policy initiatives collected across OECD countries and partner economies in 2023, about one-third aim to increase effective use of digital technologies, promote social prosperity and boost innovation. Artificial intelligence (AI) and 5G are the most often-cited technologies.

Demand for high-quality and affordable connectivity is rising, and countries increasingly prioritise network security, resilience and environmental sustainability

The demand for high-quality and affordable broadband services continues to increase. Over the last decade, fibre was the fastest growing fixed broadband access technology in OECD countries and it is now dominant. Deployment of 5G continues, while mobile data usage per subscription in OECD countries almost tripled from 2018 to 2023. Affordability, availability and quality are key aspects of bridging connectivity divides. People living in cities (metropolitan areas) in OECD countries faced median fixed broadband download speeds 50% higher than people living in regions far from metropolitan areas in Q4 2023. Alongside promoting the transition to more future-proof networks and addressing divides, policy priorities include addressing changes to market structures and ensuring secure, resilient and environmentally sustainable communication networks.

Foundational, information and communication technology, as well as complementary skills, are essential to thrive in the digital age

Foundational skills are a prerequisite for the effective use of digital technologies. The share of top-performing 15-year-old students in science, mathematics and reading decreased from 4% in 2012 to 3% in 2022 in OECD countries. Information and communication technology (ICT) skills strengthen the ability to cope with change and to keep learning. Complementary skills can significantly enhance individuals’ effectiveness and productivity. Technological progress in AI and robotics will further transform skills demand. Policy makers should encourage investments in education and training systems; promote lifelong learning; facilitate access to training resources; recognise non-traditional forms of learning; attract talent through visa programmes and scholarships; and engage in public-private partnerships.

Technological innovations offer solutions to reach net-zero targets and protect the planet

The digital and green “twin transitions” should be harnessed to protect the planet. Digital technologies such as the Internet of Things (IoT) and digital twins enabled by AI can improve energy efficiency, reduce costs and accelerate innovation across energy grids and supply chains. Communication infrastructures and services are needed to deploy technologies like smart electrical grids and IoT-based precision agriculture, which support decarbonisation. Such infrastructures and services also have an environmental footprint that needs to be minimised. Sectors such as global transportation systems stand to benefit from digital technologies that help reduce environmental impacts through fuel efficiency gains, predictive maintenance and shared mobility, as well as by low-carbon transport systems and multimodal mobility services.

Women are an untapped source of digital innovation

In 2023, women represented 11-24% of all ICT specialists in OECD countries. Women also contributed to significantly fewer ICT-related patents and started fewer ICT businesses. On average across the OECD, merely 4% of ICT-related patent families were attributed to women (only) and 20% were attributed to at least one woman in 2018-21. On average over the last two decades, 6% of start-ups in digital-related activities in OECD countries funded by venture capital were founded by women (only) and 15% were founded by at least one woman. Action is needed to encourage women to develop the skills needed to work in ICT and digital-intensive sectors, nurture female entrepreneurship and help women become ICT inventors.

New policy approaches and evolutions in cryptography and quantum information technologies hold promise for making digital environments safer

Addressing the multifaceted challenges of digital security requires mitigating risks posed by managed service providers, which have become a systemic risk in global supply chains. A wide range of approaches to certifications and labels for product and service security likewise represents another important part of reducing digital security risk by increasing market transparency and trust in digital environments. Technological advances in quantum information technologies also hold promise to strengthen digital security, but their potential to break some of today’s widely used encryption methods poses risks to cryptography.

Age influences media consumption and trust; most people are concerned about privacy on line and a rethink of approaches to media literacy is needed

Data from the 2024 OECD Truth Quest Survey show that those aged 18-24 are 25 percentage points more likely to source and 20 percentage points more likely to trust information from social media than those aged 65 and older. On average across countries, those who trust information on social media a lot demonstrated lower ability to identify its veracity (54%) compared to those who trust information on social media somewhat (59%) and not much or not at all (62%). Over half the individuals surveyed avoid using certain websites, applications or social media due to privacy concerns, and one-third feel they do not have control over their personal data. Reading more context about a headline does not always increase the odds of correctly identifying its veracity, raising questions about the design of media literacy initiatives.