The digital transformation is well under way, yet its scope and speed varies greatly across countries, sectors, people and places. Going digital will only fully benefit economies and societies if governments step up efforts to prepare businesses, people and policies for a digital world, the OECD said today.
More people are connected to the Internet than ever before, but gaps persist and new ones may emerge, according to data presented during the OECD’s Going Digital Summit taking place in Paris on 11-12 March. More than four in 10 rural households in OECD countries don’t have access to the fast fixed broadband needed to support the Internet of Things, whereas nearly nine in 10 households in urban areas have fast connections. A striking gap also remains between the way people with low and high levels of education use the Internet: over 40 percentage points’ difference in the case of Internet banking.
A digital divide by gender sees women lagging behind in information and communications technology (ICT) professions, and more than twice as many young men as young women are able to program. In some countries, the gender divide in Internet usage is still too high.
“The digital transformation is affecting every aspect of our lives. It is redefining social and economic interactions; it is raising concerns about jobs, skills, privacy and security. And it is testing our policy frameworks as we try to balance innovations that can greatly improve people’s well-being with many other concerns involving privacy, security, competition or equality, to mention just a few,” said OECD Secretary-General Angel Gurría. “We have a responsibility to get the digital transformation right so it empowers and improves everybody’s lives.”
The digital transformation of economies and societies brings a significant training challenge. Only 31% of adults have sufficient problem-solving skills to succeed in a digital world, and the highly skilled tend to benefit more from digital opportunities. Training must target those most in need, particularly low-skilled workers of whom only 40% receive firm-based training compared to 73% of high-skilled workers.
Data and data flows are an increasingly important source of value creation. Every day, data is produced equivalent to about 1.25 billion DVDs. Creating more value in the digital age requires enhancing access to and sharing of data, promoting interoperable privacy regimes to facilitate cross-border data flows, and opening up government data while taking account of national and private security concerns.
Broader concerns over online privacy and trust must also be addressed, as well as the impact of social networks on people’s mental health and on democracy. Cyberbullying is a growing challenge, with nearly one in ten 15-year-olds saying they are subject to it. The rapid development of Artificial Intelligence is revolutionising production and science and bringing direct benefits to consumers through applications like smart home appliances, improved healthcare and fraud detection but AI is also raising trust, safety and accountability concerns The OECD is seeking to address these by designing a set of guiding principles for AI.
Other key findings and recommendations include:
The Internet of Things is growing so fast that by 2022 three devices will be connected for every person in the world. But network capacity often lags behind. There are only seven fibre subscriptions per 100 people in the OECD area. Promoting competition and removing barriers to investment in infrastructure, especially fibre, can help increase access.
Most people, firms and governments are connected, but few are advanced users. Only 11% of small firms perform big data analysis compared to 33% of large ones. Governments can encourage more-sophisticated use of digital tools by investing in ICTs and skills.
Innovation is increasingly digital and data-driven, but not all countries innovate in the same way. Over 2013-16, about 33% of OECD country patents were in ICT compared to about 60% in China. Governments can boost innovation by promoting entrepreneurship, supporting basic research, and investing in R&D, patents and software.
The digital transformation is changing the world of work. OECD estimates show that automation may affect almost half of all jobs in the future, but four out of ten jobs created in the past decade were in highly digital-intensive sectors. It is vital that governments ensure fair transitions from declining to expanding job areas and strike a balance between flexibility and mobility on one hand and job stability on the other.
Trust fundamentally underpins the digital transformation, but almost a third of Internet users mistrust social and professional networks and 15% of EU citizens do not shop or bank online because of security concerns. Digital security risk management and improving online consumer protection should be strategic priorities.
Digital technologies and data transform how countries compete, trade and invest. For example, firms in the most digital-intensive sectors enjoy a 55% higher mark-up than other firms, and cross-border acquisitions of digital-intensive firms grew 20 percentage points more than those in other sectors over 2007-15. Reducing barriers to trade and investment, and addressing changing dynamics, can foster more market openness.
Two reports and an interactive data tool are being launched at the Going Digital Summit:
Going Digital: Shaping Policies, Improving Lives, which presents a comprehensive strategy for policy making in the digital age.
Measuring the Digital Transformation: A Roadmap for the Future, which proposes nine actions to build the next generation of data and indicators capable of dealing with the challenges of the digital transformation.
The online Going Digital Toolkit shows how countries compare in a raft of different areas from digital access and use to market openness, investment and trust, and featuring policy guidance and analysis to help countries realise the promises of digital transformation.
The OECD Going Digital Summit culminates Phase I of the OECD Going Digital Project, presenting the main findings and policy messages from the last two years of work by the Organisation in this area. The summit brings together high-level policy makers responsible for policies related to the digital economy and key stakeholders, to exchange views and share practices and experiences around the seven pillars of the OECD’s Going Digital integrated policy framework: enhancing access, increasing effective use, unleashing innovation, ensuring jobs, promoting social prosperity, strengthening trust and fostering market openness. The 2019 Ministerial Council Meeting of the OECD, taking place next 22-23 May and chaired by the Slovak Republic, will precisely focus on “Harnessing the Digital Transition for Sustainable Development: Opportunities and Challenges”.
Deloitte Debuts ‘Blockchain In a Box’ (BIAB)
Deloitte today introduced
“Blockchain in a Box” (BIAB) designed to provide intuitive, tangible blockchain
demonstrations and experimentations. It is a mobile, self-contained technology
platform capable of hosting blockchain-based solutions across four
small-form-factor compute nodes and three video displays, as well as networking
components that enable integration with external services, such as traditional
cloud technologies. Each compute node accepts Secure Digital (SD) card media, facilitating
rapid selection and exchange of demo solutions tailored to specific client
“Deloitte custom built this solution based on client interest in understanding blockchain capabilities in live interactions,” said Linda Pawczuk, principal, Deloitte Consulting LLP and U.S. blockchain leader and co-leader of global blockchain group. “What’s often misunderstood about blockchain is that it is an entirety of a technology solution — when in reality, it’s a technology component that enables larger business applications and approaches. Our mobile demonstration is practical, tactical and most importantly, tangible to clients.”
Deloitte has demonstrated the BIAB to several clients and to the broader blockchain and emerging technology community at multiple conferences, including Consensus 2019.
“Each time we have used the BIAB to facilitate exploration, the reaction is that of curiosity and excitement where the audience leaves with a deeper understanding of blockchain and how the use cases are implemented,” said Chih-Wei Yi, principal, Deloitte & Touche LLP. “It helps to demystify blockchain and is a refreshing and well-grounded approach versus traditional slideware-based demonstrations.”
Earlier this year, Deloitte released its annual Global Blockchain Survey, which revealed that blockchain investment continues to surge as new, practical business applications gain traction and business leaders begin to see beyond the “hype cycle.” Eighty-three percent of the 2019 survey respondents said their organizations see compelling use cases for blockchain, and more than half (53%) reported that blockchain technology has become a critical priority for their organization this year — a 10 percentage point increase over last year.
Creating a common approach to the digital economy and Industry 4.0
The United Nations Industrial Development Organization (UNIDO) participated in a forum of the Commonwealth Telecommunications Organisation (CTO) to discuss how international organizations can promote the development of the ICT infrastructure and new technologies in order to realize digital economies.
Mr. Bernardo Calzadilla-Sarmiento, UNIDO’s Director of the Department of Trade, Investment and Innovation, highlighted UNIDO’s role and functions in leveraging the potential of Industry 4.0 to meet the sustainable development goals (SDGs). Technical cooperation, developing new norms and standards, and the convening of stakeholders and partnerships to share best practices are ways of enabling this.
“Industry 4.0 is going to bring about far reaching changes and governments must implement best practices to address these important challenges.”
More than a dozen international bodies took part in the forum, including the African Union, ASEAN, the OECD and the World Economic Forum, who all agreed that public-private partnerships are key to combat the existing digital divide, both in terms of infrastructure and technical solutions, which include building capacities and using innovation in ICT.
The International Telecommunication Union further highlighted the need to support the development of and harmonization of international standards, which survey the readiness of enterprises for Industry 4.0.
APEC Strengthens Trust with Data Protection System
Data protection in the Asia-Pacific region has just received a significant boost with the appointment of the Infocomm Media Development Authority (IMDA) by Singapore as its accountability agent. Singapore joined the APEC Cross-Border Privacy Rules (CBPR) system in March last year and has become the third economy after the United States and Japan to operationalize the system.
Adopted in 2011 and endorsed by the 21 APEC Leaders, the CBPR system allows participating businesses and other organizations to develop their own internal rules and policies consistent with the specific CBPR program requirements upon which the certification is based in order to secure cross-border data privacy.
As accountability agents, IMDA will ensure the privacy policies and practices of participating organizations comply with the APEC CBPR and Privacy Recognition for Processors (PRP) through independent third party assessments before certifying them.
“The appointment of the IMDA by Singapore as the new accountability agent of the CBPR system shows the deep commitment from members to pursue a better data protection mechanism that does not hinder innovation and development,” said Shannon Coe, Chair of the APEC Electronic Commerce Steering Group.
Data protection is an urgent issue for businesses in the region, which is home to 45 per cent of the world’s internet users—about 1.99 billion people. People and businesses are connected globally, with more and more data flowing across borders.
“Trust is key to the growth and development of the digital economy,” added Coe. ”A strong data protection system is beneficial for both businesses and consumers and furthers participation in the digital economy.”
The approval of the IMDA as an accountability agent in Singapore was reached by the Joint Oversight Panel of the APEC Electronic Commerce Steering Group, which administers the APEC CBPR system. IMDA will join other accountability agents such as Schellman & Company, TrustArc in the United States and the Japan Institute for Promotion of Digital Economy and Community (JIPDEC) in Japan.
“In APEC, we are working to include more people to participate in the economy through digital trade and related processes. We can achieve this by ensuring that we have the right system in place to protect consumers’ data. This builds not only trust, but confidence for both consumers and the businesses,” said APEC Secretariat Executive Director, Dr Rebecca Sta Maria.
There are currently eight participating APEC economies in the CBPR system, including Australia, Canada, the Republic of Korea, Japan, Mexico, Singapore, Chinese Taipei and the United States.
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