DWS15 - Future Digital Economy Forum - OECD - Dirk Pilat

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DRIVING INNOVATION AND

PRODUCTIVITY - NEW INSIGHTS

Dirk Pilat, Deputy DirectorOECD Directorate for Science, Technology and Innovationdirk.pilat@oecd.org

Future Digital Economy Forum

Montpellier, 19 November 2015

There are diverging views on the Future of Productivity and Innovation …

2http://blog.ted.com/the-future-of-work-and-innovation-robert-gordon-and-erik-brynjolfsson-debate-at-ted2013/

80

90

100

110

120

130

140

150

160

2001 2002 2003 2004 2005 2006 2007 2008 2009

Most advanced firms

(3.5% per annum)

All firms

(1.7%)

Other firms

(0.5% per annum)

Manufacturing Sector Services Sector

80

90

100

110

120

130

140

150

160

2001 2002 2003 2004 2005 2006 2007 2008 2009

Most advanced firms

(5.0% per annum)

All firms

(0.3% per annum)

Other firms

(-0.1% per annum)

“Frontier firms” corresponds to the average labour productivity of the 100 globally most productive firms in each 2-digit sector. On a rolling basis. “Non-frontier

firms” is the average of all other firms. “All firms” is the sector total. AAGR shown in parentheses. Source: Andrews, Criscuolo and Gal (2015), “Frontier firms, technology diffusion and public policy: micro evidence from OECD countries ”, http://www.oecd.org/economy/the-future-of-productivity.htm

… and a Growing Gap in Productivity Growth between Frontier Firms and the Rest

The use of digital technologies is now almost universal in OECD countries, …

Broadband connectivity, by size of firm, 2010 and 2014(Percentage of enterprises in each employment size class)

Source: OECD, Digital Economy Outlook 2015, http://dx.doi.org/10.1787/888933224829

50

60

70

80

90

100%

All enterprises, 2014 10-49 50-249 250+ All enterprises, 2010

… but there are large differences in the adoption of specific digital technologies …

The diffusion of selected ICT tools and activities in enterprises, 2014

Percentage of enterprises with ten or more persons employed

Source: OECD Science, Technology and Industry Scoreboard 2015, www.oe.cd/sti-scoreboard5

0

20

40

60

80

100

Broadband Website E-purchases Social media ERP Cloudcomputing

E-sales Supply chainmngt. (ADE)

RFID

%

Gap 1st and 3rd quartiles Average Lowest Highest

… in particular for small and medium-sized enterprises

0

10

20

30

40

50

60

70

% All enterprises 10-49 50-249 250+

Source: OECD, ICT Database; Eurostat, Information Society Statistics and national sources, January 2015.

http://dx.doi.org/10.1787/888933224863

Use of cloud computing as a percentage of enterprises in each

employment size class, 2014

6

Business investment in fixed and knowledge-based capital

(as % of business sector gross value added, 2013)

Source: OECD calculations based on INTAN-Invest data, www.intan-invest.net and OECD, Structural Analysis

(STAN) Database, http://oe.cd/stan, June 2015. 7

Complementarities matter: knowledge-based capital accounts for half of all business investment

0

5

10

15

20

25

%

Non-residential GFCF including machinery and equipment Total investment in knowledge-based capital

Business dynamics are key: scaling young firms is a challenge in many countries

Average size of start-ups and old firms, in persons employed, services sector

Source: Updated from Criscuolo, Gal and Menon (2014), www.oecd.org/sti/dynemp.htm

0

10

20

30

40

50

60

70

80

Emplo

yees

Start-ups (0-2) Old (>10)

Skills are a major challenge for an innovation-intensive economy.

Individuals who judge their computer skills to be sufficient if they were to apply for a

new job within a year, 2013 (as a percentage of all individuals)

Source: OECD Measuring the Digital Economy: A New Perspective, 2014, http://dx.doi.org/10.1787/888933148354.

0

10

20

30

40

50

60

70

80

90

%

All Individuals Individuals with high formal education Individuals with no or low formal education

1. Productivity in global frontier firms is strong

2. But other firms are lagging, technology is not the same as productivity

3. Key factors that affect this:

– Lack of complementary investment (skills, organisational change, process innovation)

– Lack of business dynamics, partly linked to policies favouring incumbents that reduce

renewal in the economy

– Lack of capabilities by SMEs, including access to finance, talent, markets

– Lack of digital single market (in the EU), limiting market size and firm growth

– Lack of a comprehensive digital strategy (e.g. security, trust, privacy)

4. Making the digital economy work for all will require comprehensive

policy action.10

Key points

Thank you

11

Contact: Dirk.Pilat@oecd.organd @PilatSTI

For more information:

Website: www.oecd.org/sti

Twitter: @OECDinnovation

Newsletter: www.oecd.org/sti/news.htm

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