Digital Transformation and Productivity Recovery: a G20s Perspective Annual Conference of the Global Forum on Productivity FWG Venice, 8-9 July 2021 th 5 virtual meeting
Cecilia Jona-Lasinio
10 June 2021and Finance Italian Ministry of Economy
Reviving productivity growth •
Global labor productivity per worker is projected to increase in 2021, thus setting the stage for a revival in productivity trends for the next decade.
•
The persistent productivity slowdown experienced by most of the countries in the world economy over the past 15 years may be reversed as innovation and investment in digital transformation has been accelerated by the pandemic.
•
G20 economies can provide a substantial contribution in this respect promoting innovation policies to strengthen productivity trends and generate a more balanced, inclusive and sustainable recovery.
G20 Menu of Policy Options Digital transformation and Productivity Recovery
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Policies to promote digitalization and productivity: the broad picture Main policy challenges: • Ensure that digitalization speeds up productivity recovery while favoring decreasing income gaps. • Strengthen policy coordination to improve the diffusion of innovation across firms and revive business dynamism. • Define a public-private digital strategy for granting stable and inclusive access to digital technologies and services to citizens and firms. What policy objectives have been pursued by G20 countries so far? What policy options for the way forward?
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Boosting digitalization for productivity recovery (G20 survey results) MAIN POLICY OBJECTIVES Connectivity, 14%
Policy options
• Sustain innovation
and the knowledge economy
• Establish fair market conditions
• Improve technology
access for firms and citizens
Digital skills, 14% Access to financial services, 10% Broadband, 10% Digital government, 10% Digital innovation, 10% Access to public services, 9% Competitiveness of SMEs , 7% Access to healthcare, 4% Access to labour market, 4% Access to education , 2% Access to market, 2% AI and DP, 1% C. tracing, 1% DS and P, 1% Digital literacy, 1%
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Promoting digitalization for productivity recovery Challenges
Policy options • Increasing lifelong learning for all
Fostering digital inclusion
• Support SMEs digital transition • Consistency with financial inclusion • Digital infrastructures
Harnessing Digital Platforms
• Open and competitive online markets • Strengthen social protection and labor market regulation • Data market regulation
Ensuring Financing intangibles
• Enhance government financing • Expand equity markets • Foster access to bank financing 5
What type of policies have been implemented by G20 economies? (G20 survey results by section)
Type of policies 70.0%
• Almost 45% of policies adopted by G20 economies for improving digital inclusion fall in the public investment or regulatory code categories.
60.0%
50.0%
40.0%
• 68% of policies implemented for promoting digital platform diffusion refers to regulatory measures.
• 23% of policies for supporting intangible investments are classifiable as public investments
30.0%
20.0%
10.0%
0.0% MULTI-POLICY FRAMEWORK
PUBLIC INVESTMENT
PUBLIC SUBSIDY
PUBLIC-PRIVATE PARTNERSHIP
Digital inclusion
Mult i-policy framework 12.2%
Digital platforms
10.5%
10.5%
0.0%
Financing intangibles
19.2%
23.1%
15.4%
REGULATORY CODE
Public investment
Public subsidy
22.0%
9.8%
Public-private partnership 19.5%
SUBSIDIZED LOANS
TAX RELIEF
TRAINING
Regulatory code
Subsidized loans
Tax relief
Training
22.0%
0.0%
0.0%
14.6%
10.5%
68.4%
0.0%
0.0%
0.0%
3.8%
7.7%
7.7%
19.2%
3.8%
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What are the main targets of the proposed policies (survey results by section)
• 27% of policies adopted by G20 in the area of digital inclusion are directed to young people.
• 47% of policies implemented for promoting digital platform targets citizens and enterprises and 35% Innovative start-ups.
• 43% of policies for supporting intangible investments aims at supporting innovative enterprises.
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The way forward • The extent of digitalization and productivity growth rates and related policy interventions differ significantly across G20 countries. • Even if the national dimension of productivity-enancing policies remains relevant, international cooperation can play a strategic role amplifying country-level benefits and induce positive spillovers: • skills policies • technological diffusion • competition
• Continuous and constructive exchange of views among G20 members will keep them at the forefront of policymaking for the digital era.
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Backup slides
Survey Results - Methodology The policies listed by G20 members in the Survey on Digitalisation and Productivity were classified according to: 1. Survey section: •
The section of the survey under which a certain policy is listed (e.g. Digitalization and productivity, Digital Inclusion, Digital platforms or Financing intangibles)
2. Main and secondary objectives: •
What are the main and secondary goals that the listed policy aims to pursue?
•
Examples are measures aimed to put in place a comprehensive digital economy strategy, to ensure access to education and training, access to financial services, to build up digital infrastructures, etc.
The FWG Agenda for 2021
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Digitalization and productivity (G20 survey results) •
32% of G20 countries proposed policies that can be classified as multi faceted (Multi-policy framework). •
•
•
Argentine's National Connectivity Plan "Conectar" . The program aims to promote inclusion and internet access throughout the country. Spain’s Digital Skills National Plan promoting measures for empowering citizens in the digital age including in the school system.
Main policy target 40% 35% 30% 25% 20%
37%
15% 10%
21% 15%
5% 0% CITIZENS AND ENTERPRISES
8% SMES
ENTERPRISES, START-UP
WORKERS
8% PUBLIC SECTOR
5% YOUTH
CITIZENS
37% of proposed policies targeted simultaneously citizens and enterprises (regardless of the size and type of firm)
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Main policy objective – classification /1 Main objective
Definition
Access to education and training
The category includes all measures aimed at transforming the conditions, circumstances and/or requirements (e.g. qualification, education level, skills or work experience, etc.) governing admittance to and participation in education and training institutions or programmes in the digital era.
Access to financial services
The category encompasses all measures aimed at enhancing the ability of individuals and/or enterprises to obtain financial services in the digital era – including credit, deposit, payment, insurance, and other risk management services.
Access to healthcare
The category encompasses all measures aimed at enhancing the digital transformation of health systems, improving access to health services.
Access to labour market
The category encompasses all measures aimed at setting in place digital services to facilitate labour market matching and reallocation. Active labour market policies fall under this category as well.
Access to market
The category encompasses all measures aimed at enhancing firms’ access to markets, reducing barriers to entry and improving the ability of enterprises to process business online in real time, reducing error and delays.
Access to public services
The category encompasses all measures aimed at enhancing access to public services, defined as services provided by governments and other public agencies to people living within a certain jurisdiction, either directly (through the public sector) or by financing private provision of services.
Artificial Intelligence and Data Processing
Policies aimed at fostering Artificial Intelligence and Data Processing are those who prepares students, citizens and enterprises to work in the areas of design, development and application of intelligent systems and analysis of big data.
Broadband
The objective encompasses all measures aimed at enhancing access to high-speed and stable communications infrastructures, services and data underpin digital transformation.
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Main policy objective – classification /2 Main objective
Definition
Competitiveness of SMEs
The objective encompasses all measures aimed at raising the productivity potential of SMEs, harnessing the benefits of the digital transformation, while enhancing their competiveness in the digital era.
Connectivity
The objective encompasses all measures aimed at enhancing access to communications infrastructures, services and data underpin digital transformation.
Contact tracing
The category includes measures aimed at putting into operations software and apps to identify, assess, and manage people who have been exposed to a disease to prevent onward transmission (e.g. COVID-19).
Data sharing and protection
The objective includes all measures aimed at fostering a stable and secure diffusion of information, making data available for public or private purposes, while protecting their diffusion beyond these purposes and preventing privacy threats.
Digital government
Digital government is defined as the use of digital technologies as part of governments’ modernisation strategies. All policies intended to create public value fall under this category.
Digital innovation
The objective includes all-encompassing policies aimed at fostering the structural transformation of societies and production systems in a digital way (e.g. national recovery and resilience plans), encouraging the use of digital technologies and applications to improve existing business and governments processes and workforce efficiency.
Digital literacy
The objective encompasses all measures aimed at fostering digital literacy, defined as the ability to find, evaluate, utilize, share, and create content using information technologies.
Digital skills
The category includes all measures aimed at enhancing digital skills, defined as a range of abilities to use digital devices, communication applications, and networks to access and manage information.
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Type of policy - classification Type of Policy
Definition
Multi-policy framework
The category encompasses all types of policies which set in place at the same time a variety of coordinated measures to reach a specific objective (e.g. measures aimed at fostering a broader digital transformation of the national economies usually fall under this category).
Public investment
Public investment refers to all capital expenditures carried out by the government or other public agencies in digital and soft infrastructures (e.g. human capital development, innovation support, research and development, etc.). The category comprises both direct and indirect investment.
Public subsidy
The category includes all policies which involve a benefit given to citizens, enterprises or other institutions in the form of a subsidy paid by the government or other public agencies.
Public-private partnership
The category includes the agreements between the government or other public agencies and a private partner whereby the private partner delivers and funds public services using a capital asset, while sharing the associated risks.
Regulatory code
The category encompasses all policies put in place by the government or other public agencies which revised an old regulation or established new standards and controls.
Training
The category includes all set of measures put in place by the government or other public agencies to ease and promote the development of digital literacy, digital skills and the incorporation of Information and Communication Technologies in educational and production systems.
Tax relief
The category includes all policies which involve a benefit given to citizens, enterprises or other institutions in the form of a tax reduction.
Subsidized loans
The category includes all policies through which the government or other public agencies provide citizens, enterprises or other institutions with a subsidized loans, thus covering part or the entirety of interest payments.
10 May 2021
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Survey Results - Methodology 3. Type of policy: What kind of policy is the adopted or planned measure listed in the survey? Examples are public investment, public-private partnerships, regulatory codes, training, public subsidies and tax reliefs, etc. 4. Main and secondary targets: What are the main and secondary targets of the listed policy? Examples are citizens and enterprises, workers, students and youngsters, the public sector, etc. The FWG Agenda for 2021
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