Making the digital transformation work for economies and societies CREATIVE INDUSTRIES IN THE DIGITAL CONVERGENCE ERA 11 October 2017 Eiffel Tower Paris, France Making the digital transformation work for economies and societies Vincenzo Spiezia Senior Economist vincenzo.spiezia@oecd.org

Digitalisation is not new… IBM 360 (1964) – the first commercial mainframe

… but the advent of ubiquitous computing is … Quarterly shipping trends of smartphones, 2010-13 2005 2013 Sources: www.washingtonpost.com and OECD Broadband Portal http://pages.experts-exchange.com/processing-power-compared/

… and the ICT sector as a driver of innovation … Specialisation in ICT-related patents, 2012-15 Patents in ICT as a percentage of total IP5 patent families

… gains new momentum with IT services and software ... Growth of employment in the ICT sector and its sub-sectors OECD area, USD current prices (2008 = 100)

… with artificial intelligence creating promising opportunities …

… as part of a bigger ecosystem that is driving digital transformation.

To seize the benefits of the digital transformation, we need to set the right foundations

The foundations for digital transformation Connectivity Effective use Enhanced security Policy co-ordination

Connectivity keeps improving with falling average prices and fast growth in mobile data usage

Fixed broadband subscriptions are growing … Fixed broadband subscriptions, December 2016 By technology per 100 inhabitants

… but fibre is still low in many countries. Fixed broadband subscriptions, December 2016 Fibre connections per 100 inhabitants

Mobile broadband subscriptions are at a new high … Subscriptions per 100 inhabitants

Prices for fixed and mobile broadband keep falling … OECD trends in fixed and mobile broadband prices, 2013-16

Top five countries in mobile data usage … mobile data usage is growing fast with a few countries pressing ahead… Top five countries in mobile data usage Gigabytes per mobile broadband subscription per month

Mobile data usage per mobile broadband subscription, 2016 … but not everywhere. Mobile data usage per mobile broadband subscription, 2016 Gigabytes per month

Infrastructure and connectivity are not enough: governments must foster more effective use of advanced digital technologies

The young and educated are leading on Internet usage … Internet users by age and educational attainment, 2016 As a percentage of the population aged 16-24 High All Low

… while elderly and less educated individuals lag behind … Internet users by age and educational attainment, 2016 As a percentage of the population aged 55-74 High All Low

… and much potential remains for more sophisticated usage. Diffusion of selected online activities among Internet users, 2016 As a percentage of Internet users performing each activity

Governments must step up efforts to empower people with the skills needed to succeed in a digital world and broaden access to digital opportunities for all actors

Generic ICT skills are already much in use, but often insufficient … Workers using office productivity software at work every day As a percentage of total population

… and digital transformation raises demand for ICT specialists … Top ten jobs that employers have difficulty filling, 2016 Rank Job 1 Skilled trade workers 2 IT staff 3 Sales representatives 4 Engineers 5 Technicians 6 Drivers 7 Accounting and finance staff 8 Management/executives 9 Production/machine operations 10 Office support staff

… who are still rare in many countries and mostly male … ICT specialists by gender, 2016 As a percentage of all male and female workers

In particular firms could make better use of advanced ICT tools to boost productivity

Almost all firms are connected … Enterprises’ broadband connectivity, by firm size, 2016 As a percentage of enterprises in each employment size class

… but firms could make greater use of advanced ICT tools. Diffusion of selected ICT tools and activities in enterprises, 2016 As a percentage of enterprises with ten or more employees

Governments have a lot to gain with digital, but need to make greater efforts.

Governments need to move on from e-government services … Use of e-government services by individuals and businesses As a percentage of individuals and businesses interacting with public authorities online

… towards digital government. Open government data availability and accessibility, 2017 Index

Growing digital security, privacy and consumer risks hamper digital opportunities: governments need to address digital risk strategically to achieve economic and social goals

Numerous individuals experience digital security incidents … Digital security incidents experienced by individuals, 2015 or later As a percentage of all individuals and by level of educational attainment

… as well as privacy violations. Individuals having experienced privacy violations in the last three months As a percentage of all individuals

Many businesses are ramping up security measures … Deployment of encryption by businesses worldwide

… and are putting policies in place to manage digital privacy risks. Enterprises having a formal policy to manage digital privacy risks, 2015 As a percentage of all enterprises in each employment size class

For the digital transformation to spur growth and social prosperity, countries need governance model that achieves coherence and effective co-ordination

Governments face many challenges… Governments’ main challenges to achieve digital policy objectives Main challenges in 2017 Main challenges next 3-5 years Awareness, implementation, enforcement 1 Co-ordination Skills, training, education 2 3 Public investment or funding Policy design and measures 4 Technical, including standards and interoperability Laws or regulation 5 Trust, including privacy, security, consumer protection 6 Laws and regulation ICT adoption, business digitalisation, innovation 7 8 Private investment or access to finance 9 10

…but need need an effective model for co-ordination National digital strategy governance Number of countries that have allocated respective responsibilities Lead the development Contribute input Co-ordinate Government, e.g. Prime Minister, Presidency, Chancellery, etc. 4 5 Digital affairs ministry or body or ministerial position 8 1 10 Ministry or body not dedicated to digital affairs 15 2 13 Several ministries, bodies or institutions 6 14 Multiple public and private stakeholders 17

Policy messages Digital opportunities abound, but they must be equally harnessed by all Infrastructure and connectivity are essential but not enough: effective use of advanced digital technologies is key Legacy frameworks to be revised to embrace the potential of digital innovation while mitigating its social cost Digital security, privacy and consumer risks to be addressed strategically to achieve economic and social goals A whole-of-government approach and more cooperation across countries are needed The promises of technologies, e.g. AI and blockchain, hinge on grappling with technical hurdles and policy challenges

Making the Transformation Work for Growth and Well-being What’s NEXT? Going Digital Making the Transformation Work for Growth and Well-being Understand the digital transformation and its impacts on the economy and society Provide policymakers with the tools needed to develop a forward-looking, whole-of-government policy response Help overcome the gap between technology and policy development