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The OECD Background Report:
“Key Issues for the Digital
Transformation in the G20”
Andrew Wyckoff , Director Directorate for Science, Technology and Innovation Andrew.wyckoff@oecd.org
G20 “Digital Economy”
Task Force Meeting 13 January 2017
Berlin, Germany
IBM 360 (1964) – the first commercial mainframe
Computing is not new…
…but ubiquitous computing is…
0
50
100
150
200
250
300
350
Millions Smartphones Other mobile phones
Quarterly shipping trends of smartphones, 2010-13
Sources: www.washingtonpost.com and OECD Broadband Portal
2005 2013
4
…marking the beginning of
digital transformation…
https://thepowerofus.org/2016/08/09/the-internet-of-things/
…with data and analytics
transforming production...
Source: http://www.nytimes.com/2012/08/19/business/new-wave-of-adept-robots-is-changing-global-industry.html 5
6
… fueling new types of
disruptive innovation… Algorithmic trading as share of total trading
Note: 2013-14 based on estimates.Source: OECD based on The Economist (2012) and Aite Group Driverless car Siri
Health Public
Administration Energy
Transportation Agriculture
Manufacturing 7
Digitalisation
…and affecting all activities.
G20 Engagement
“Breaking a new path to growth”
“Shaping an inter-connected world"
The OECD Report in support
of the G20
1. Assessment of G20 economies’ performance with respect to digitalisation
2. 10 Most pressing policy challenges
3. Core policy recommendations for consideration
Report Structure: 3 Parts
Part 1. Assessing digitalisation
in G20 countries
• Digital infrastructure
• Access and use
• Innovation
• Skills
• Trust
G20 countries need to work together to fill the data gaps.
Part 2. 10 Key Policy Challenges
1. Access to digital technologies and services
2. Digital infrastructures
3. Financing digital infrastructures and new business models
4. Developing standards for a digital world
5. Regulation of the ICT sector
6. Digital security
7. Skills and the digital economy
8. Digitalisation, SMEs, Start-ups and dynamism
9. Consumer rights in the digital era
10. Digitalisation and legal frameworks
1
Individuals using the Internet, 2005 and 2015
0
20
40
60
80
100
%
2015 2005
Source: OECD (2017), Key Issue for digital transformation in the G20, page 23, ICT Database; Eurostat, Information Society Statistics Database; ITU, World Telecommunication/ICT indicators Database and national sources, July 2015.
1. Access to digital
technologies and services
Source
1. Access:
Key areas for G20 policy action
Develop and implement National Digital Strategies
3
Fixed and Mobile broadband subscriptions per 100 inhabitants
0
20
40
60
80
100
120
140
160
% Mobile boadband Fixed broadband
Source: OECD (2017), Key Issue for digital transformation in the G20, pages 20-21
2. Digital infrastructures
Fixed networks • Encourage deployment of more fibre
• Reduce administrative obstacles
• Ensure access to passive infrastructure
Mobile networks • Encourage deployment of 5G networks
• Exercise caution with potential mergers of mobile operators
Deploy (fibre & 4/5G, IXPs, IPv6)
Spur competition
Rethink nature of digital infrastructures
2. Digital infrastructures
Key areas for G20 policy action
Telecommunication infrastructure investment as a percentage of GDP
3. Financing digital infra-
structures and business models
0.0
0.2
0.4
0.6
0.8
%
2015 2013
Source: OECD (2017), Key Issue for digital transformation in the G20, page 62
• Strenghten infrastructure deployment through both public and private (PPPs) financing;
• Seek to reduce costs of deployment;
• Improve framework policies;
Improve the evidence base for network investment: Data flows
3. Financing
Key areas for G20 policy action
4. Developing standards for
a digital world
0
2
4
6
8
10
12
14
0
10
20Millions
M2M cards, per 100 inhabitants (left-hand scale) M2M cards, millions (right-hand scale)
USA: 49.3 million cards China: 43.4 million cards
Source: OECD (2017), Key Issue for digital transformation in the G20, page 22
Promote open, voluntary standards through collaborative mechanisms
Encourage an interoperable environment • in support of the IoT and Industrie 4.0,
• smart cities / smart mobility
Encourage SMEs’ participation in standards bodies
Embrace industry-led efforts; but ensure global interoperability
4. Developing standards
Key areas for G20 policy action
5. Regulation of the ICT sector
http://www.mindseyesolutions.com/2012/10/09/the-great-early-assessment-convergence/
Foster competition and innovation as the ICT sector consolidates
Develop regulatory approaches adapted to a converged environment
Rethink nature of “telecomm” regulations in era of digital economy [#2]
Embrace enhanced regulatory co-operation
5. Regulation of the ICT sector
Key areas for G20 policy action
Spear-phishing attacks, by size of targeted organisation
18 %
31 % 30 % 34 % 43 %
32%
19 % 31 % 25 %
22 %
50 % 50 % 39 % 41 %
35 %
0
20
40
60
80
100
2011 2012 2013 2014 2015
%
Small businesses(1-250 employees)
Medium-size businesses(251-2 500 employees)
Large businesses(2 500+ employees)
Source: OECD (2017), Key Issue for digital transformation in the G20, page 94
6. Digital security / privacy
6. Digital security / privacy
Key areas for G20 policy action
Public-private dialogue is essential (PPPs);
Security must be informed by an assessment of the risk; the economic and social objectives and the cost and impact of the measures; • Need to pool data, develop indicators of trust based on
an agreed methodology;
Develop national privacy strategies and increase interoperability to ensure flows of data
Foster capacity building and greater awareness in developing countries (ITU led consortia)
Two thirds of people surveyed lack the skills to succeed in technology-rich environments
very low skills or optedout of the test
low skills
medium skills
solid skills
2 out of 3
people lack
skills for the digital
age
25
7. Skills and the digital
economy
7. Skills and the digital economy
Key areas for G20 policy action
Assist people, especially the least able, in navigating the transition; starting with skills
Take advantage of the technology to improve skills development and training
Foster digitally competent consumers
Empower individuals
Share « best practices » helping displaced workers, including apprenticeship programmes, retraining, « nano-degrees » and vouchers
Laggards
Frontier
Laggards
Average of labour productivity across each 2-digit sector (log, 2001=0)
Frontier
Source: Andrews, D., C. Criscuolo and P. Gal (2016), "The Best versus the Rest: The Global Productivity Slowdown,
Divergence across Firms and the Role of Public Policy", OECD Productivity Working Papers, No. 5, OECD
8. SMEs, start-ups & dynamism
8.SMEs, start-ups & dynamism
Key areas for G20 policy action
Keep a level-playing field; don’t tilt towards incumbents
Improve access to finance
Improve access to skills (extension programmes to SMEs)
Improve access to technology (e.g. cloud)
Diagnose the decline in dynamism
Nuture start-ups and help them scale
9. Consumer rights
http://www.consumersinternational.org/news-and-media/news/2016/04/new-report-internet-of-things/
9. Consumer rights
Key areas for G20 policy action
Enhance cross-border co-operation; improve enforcement information sharing
Be attentive to role of platforms and how to build trust
Identify good practice approaches to making data portability work for consumers & business
Adopt new international (UN, OECD) standards for consumer protection
10. Legal frameworks
... and are spreading more and more quickly
1878
1979
1990
2003
2004
2008
2009
2010
2012
… 25 social media users
Year of
launch
Time to reach 100 million users worldwideFor every 100 people in
the world, there are …
Digital technologies have a huge reach …
… 32 active mobile-
broadband subscriptions
… 95 mobile-phone
subscriptions
… 40 internet users
1 yr, 3 mos
2 yrs, 2 mos
2 yrs, 4 mos
3 yrs, 3 mos
4 yrs, 5 mos
6 yrs, 5 mos
7 years
16 years
75 years
0 20 40 60 80
Candy Crush Saga
Apple App Store
iTunes
World Wide Web
Mobile phone
Telephone
YearsSource: OECD, based on BCG (2015).
10. Legal frameworks
Key areas for G20 policy action
Need for a whole-of-government approach;
Periodic review is needed; not regulate and ignore for a decade
Competition policy needs to better encompass the growing competitive importance of data and data analytics
Online platforms provide a host of opportunities and challenges; need for experimentation / “sand boxes”
Elaborate and pilot a policy framework for analysing digital readiness
• What are the digital policy priorities for the G20?
• Is there a natural sequence to activities?
• How best does the G20 take this forward?
• How to ensure coordination with “Future of Work” (EWG); Fin TECH (Finance); Digital Trade (TIWG); etc.
Discussion
Thank you
34
Contact: andrew.wyckoff@oecd.org
Website: www.oecd.org/sti
Twitter: @OECDinnovation
Newsletter: www.oecd.org/sti/news.htm
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