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OECD Secretary-General

Adapting to the Digital Transformation

 

Remarks by Angel Gurría

OECD Secretary-General 

16 April 2019 - Japan Institute of International Affairs, Tokyo

(As prepared for delivery)

 

 

 

 

Dear Ambassador Sasae, Ambassador Otabe, Rintaro, Ladies and Gentlemen,


It gives me great pleasure to be here with you. I would like to thank Ambassador Kenichiro Sasae, President of the Japan Institute for International Affairs (JIIA), for inviting me today. Let me also praise JIIA’s leadership in driving the T20 discussion on global governance and the future of multilateralism. This is particularly important in an era of constant and rapid change, like the one we live in today.


Japan has taken over the G20 Presidency at a particularly challenging time. Global growth is continuing to lose steam. According to our latest Economic Outlook, economic prospects are now weaker in nearly all G20 countries, with the global economy growing by 3.3% in 2019 and 3.4% in 2020, instead of almost 4% which we projected only last May. Heightened policy uncertainty and ongoing trade tensions are taking their toll on business and consumer confidence, as well as on hiring intentions, while trade growth continues to decelerate. China is also slowing, with consequences for our interconnected global economy.


This global slowdown is taking place amidst growing concerns that digitalisation is creating disruption and imposing a huge transformation upon our economies and societies. This transformation, however, also brings important improvements in well-being. Let me provide some context.

 

Digitalisation is bringing profound changes to how we live and work

The digital revolution has already created countless benefits. It has produced unimaginable progress in our education, health, transport, communication and energy systems. We can see this in our everyday lives. For example, a smartphone can let you monitor fatigue levels while driving, manage finances, find recommendations for movies, or use speech recognition to offer on-the-spot translation. And this is just the tip of the digital iceberg.


Think of blockchain; it is becoming a game-changing tool for governments, helping them improve the transparency, accountability and efficiency of public services. Artificial Intelligence (AI) is going mainstream, providing a powerful tool to analyse huge amounts of data to help us make better predictions and decisions.


New technologies are sparking innovation and generating new jobs. More than half of all new jobs in the US are now in ‘new professions’ that did not exist a few years ago. In the last decade, four in ten jobs were created in highly digital-intensive sectors.


However, this transformation also brings new challenges, whether in relation to taxation, competition, security, privacy and data governance, consumer and child safety, or market concentration. In particular, digitalisation is contributing to a number of growing gaps: between countries, between regions and localities, between age and skill groups, between firms.


For example, over 2013-16, just five economies accounted for 72 to 98% of patenting activity in the top-25 fast-accelerating digital technologies. Digitalisation is also making it harder for those without the right skills to enter and stay in the job market. About 14% of jobs across the OECD are estimated to be at high risk of automation, a further 32% are at risk of significant change over the next 10 to 20 years.

 

The OECD is helping governments to adapt

The OECD is helping governments navigate through this transition. Let me provide some concrete examples:


Our Going Digital Integrated Policy Framework, which we launched at our Digital Summit last month, is helping decision-makers better understand the core policy issues behind digitalisation.


An important part of the role of policy is to remove barriers to digital transformation. For example, governments can facilitate the expansion of high-speed networks needed for the Internet of Things and other advanced digital applications, and should help to reduce skill shortages and mismatches. Among others, the OECD’s Future of Work Initiative, building on our Skills and Jobs strategies, focuses on how technological progress, as well as demographic change and globalisation, are all affecting job quantity and quality and what this means for skills, for labour markets and social policy.


We are also working hard to level the playing field on tax in the digital era. Only last week I was with the G20 Finance Ministers in Washington DC, where we reaffirmed our commitment to advance the work on tax transparency and BEPS, including on addressing the tax challenges arising from digitalisation. In fact, members of the G20/OECD Inclusive Framework on BEPS recently pledged to step up efforts to reach a global solution over how to tax multinational enterprises in a rapidly digitalising economy.


In the area of AI, reinforcing trust and security in cyberspace is an urgent necessity. Which is why the OECD has developed a set of Principles to facilitate innovation, the adoption of and trust in, AI. To ensure consistency and complementarity, we hope that these Principles will support the G20 in developing a co-ordinated response to international co-operation for trustworthy AI.


The power of globally co-ordinated action to tackle the tough issues around digital transformation and other global challenges should not be underestimated. The G20 can provide a collective vision, which in turn, will deliver collective solutions for global challenges. That is why the OECD is delighted to be supporting the Japanese Presidency in developing the Osaka Update on the 2030 Agenda for Sustainable Development.


And last but not least, our new project on sustainable infrastructure is supporting Japan’s development of “G20 Principles for Quality Infrastructure Investment”. This will help make our infrastructure climate compatible while supporting the digital revolution and the transition to sustainability and net zero emissions.


Ladies and Gentlemen,


Getting the digital transformation right is a critical part of achieving what Prime Minister Abe calls, “Society 5.0”. The OECD strongly supports his vision for a free and open, ‘technology-based human-centred society’ borne out of the fourth industrial revolution.


Count on us! Count on the OECD’s continued and unwavering support as together, we design, develop and deliver better digital policies for better lives.  Thank you.

 

 

 

See also:

OECD work on Science and Technology

OECD work with Japan

 

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