OECD launches digital economy outlook
Today the Organisation for Economic Cooperation and Development (OECD) announced the launch of the OECD Digital Economy Outlook 2020.
The 318-report examines and documents evolutions and emerging opportunities and challenges in the digital economy. It highlights how OECD countries and partner economies are taking advantage of information and communication technologies (ICTs) and the Internet to meet their public policy objectives.
And while African countries are not members of the 37- member organisation, through comparative evidence, the report can inform African policy-makers of regulatory practices and policy options to help maximise the potential of the digital economy as a driver for innovation and inclusive growth.
The report illustrates how digital transformation is affecting economies and societies. Finally, it provides a special focus on how the COVID-19 pandemic is amplifying opportunities and challenges from digital transformation,” the document says.
Trends to learn from
According to the report, OECD countries are strengthening their strategic approach to policy for digital transformation. This means that OECD countries are developing a co-ordinated, whole-of-government approach to digital transformation, which includes seven interrelated dimensions: access, use, innovation, jobs, society, trust and market openness.
”Good policies in all of these dimensions are needed to make digital transformation work for growth and well-being. Cross-cutting issues such as gender, skills, digital government and data governance also need to be taken into account,” it says.
The report adds that access and connectivity have fuelled more demand for high-quality connectivity. In some cases, operators have experienced a 60% jump in Internet traffic. “For the first time, the share of fibre in all fixed broadband subscriptions in OECD countries rose to 27% by June 2019, up from 12% eight years earlier. In nine OECD countries, high-speed fibre makes up at least half of fixed Internet connections,” the report says.
Overall, fixed broadband networks increasingly took on the ‘heavy lifting’ of the increasing demands on wireless networks. Many OECD countries moved towards high-capacity fixed networks, and the next generation of wireless networks, i.e. 5G. As of June 2020, 22 OECD countries offered 5G commercial services in selected locations. Gigabit networks and 5G are likely to become the underlying connectivity behind the Internet of Things (IoT) and artificial intelligence, the report says.
In terms of digital uptake, usage and skills, the report says Internet usage significantly increased over the last decade, but continued to vary widely across countries.
“The age of first access to the Internet has been decreasing in almost all countries in recent years. In 2018, 24% of 15 year-olds in the OECD area first accessed the Internet at the age of 6 or under compared to only 15% in 2012,” the report says.
In 2019, the proportion of adults accessing the Internet ranged from over 95% to less than 70% among OECD countries, it said.
According to the report, all OECD countries and several partner economies enhanced access to and sharing of public sector data. However, only a few also have initiatives to facilitate data sharing within the private sector.
One of the key findings on privacy and data protection was that all 29 countries that responded to the OECD’s 2019 Privacy Guidelines Questionnaire have in place some form of legislation for privacy and personal data protection. Of these, 17 reported their main privacy legislation was adopted after 2013. In addition, 10 countries reported they are revising their privacy and data protection legislation, and eight countries reported plans for revisions, the report says.
The report adds that in 2020, most OECD countries had whole-of-government digital security strategies. However, too often, these strategies lack an autonomous budget, evaluation tools and metrics, and integration into overall national digital plans. “The emergence of digital security innovation hubs suggests that governments may increasingly harness digital security for economic development rather than see it only as a cost or a threat,” the report says.
The digital transformation is rapidly impacting the consumer marketplace, enabling purchases in multiple channels, contexts and settings, the report says. It adds that the COVID-19 crisis has accelerated these trends by leading more consumers and businesses on line.
“Consumer policy makers are increasingly recognising the need to keep pace with technological developments and to work with counterparts in other relevant policy areas to ensure that consumers are adequately protected from unfair practices and unsafe products. They are also increasingly adopting a multidisciplinary approach to identify and address consumer policy issues, incorporating learnings from economics, psychology, cognitive and social sciences and empirically tested results in order to understand and guide consumer behaviour,” the report says.
The report notes that digital technologies are both a key area of research and innovation and themselves a key foundation for developments in research and innovation. “Around one-third of patents owned in OECD countries are related to information and communication technologies (ICTs). This share has fallen over the last decade but has increased markedly in China, India and the Russian Federation. These three countries have moved from being mainly specialised in ICT manufacturing and software production to other parts of the value chain, including product and component design,” the report says.
Evolving business models also means that policy can support e-commerce innovation by removing regulatory barriers that preserve artificial distinctions between online and offline commerce and encouraging regulatory flexibility, experimentation and transparency.
By mid-2020, over 60 countries had a national artificial intelligence (AI) strategy. Priority areas include AI-related research and development and AI skills.
Meanwhile on the African continent, the African Union set up a working group on AI. The working group plans to create a joint capacity-building framework across the continent. This will address skills gaps and prepare African youth for future jobs; identify and initiate AI projects across Africa to serve the Sustainable Development Goals and establish a common AI strategy for Africa.