Table Of ContentBRIDGING DIVIDES
Bridging Divides is the theme of OECD Forum 2017. After many years
of global interaction, exchange and progress, driven by a potent mixture
of reform, economic transition, emerging markets and technological innovation,
divisions have again begun to erupt in OECD countries. Some of these income,
social, cultural and geographical divides have been lurking for some time,
but have deepened since the financial crisis started in 2008. Indeed, lately
there has been a backlash against international co-operation and globalism,
and a resurgence of protectionist, even nationalist, policies. All of this poses
challenges for key global agreements on climate and sustainable development,
and risks dashing the hopes for progress of people everywhere.
What should policymakers do to help bridge these dangerous divides,
and make the global economy work better for everyone? What promise
does digitalisation hold for bridging economic, social and geographical
divides? What must be done to bring people and institutions closer together?
How can facts, knowledge and positive narratives be marshalled to beat
back fake news and post-truths, and restore faith and confidence in the
value of international co-operation, openness and world progress?
In OECD Yearbook 2017, OECD experts are joined by thought leaders from
government, business, labour, academia and civil society to examine these
and other questions facing our societies today.
OECD Observer
Volume 2017 Supplement 1
ISSN 0029-7054
Volume 2017 Supplement 1
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Table of contents
INTRODUCTION 31 Business brief: Grupo Energía de Bogotá
6 We must bridge divides and make globalisation work for everyone
Angel Gurría, Secretary-General of the OECD DIGITALISATION
8 Making globalisation work: Better lives for all 34 Introduction
Lars Løkke Rasmussen, Prime Minister, Denmark and Chair
36 Re-booting government as a bridge to the digital age
of the OECD Ministerial Council Meeting 2017
Andy Wyckoff, Director, OECD Science, Technology and Innovation
Directorate
INCLUSIVE GROWTH
38 Making the most of the digital world: Changing an end to
10 Introduction a means
Susan Greenfield, CEO and Founder, Neuro-Bio Ltd and Member
12 Towards an empowering state: Turning inclusive growth into
of the British House of Lords
a global reality
Gabriela Ramos, Special Counsellor to the OECD Secretary-General 39 Business brief: Labster
and Sherpa to the G20
40 Business brief: Engie
14 The challenge of boosting innovation and trade, while achieving
inclusiveness 41 US manufacturing’s decline and the rise of new production
Catherine Mann, Chief Economist, OECD innovation paradigms
William B Bonvillian, Lecturer at MIT and Advisor to MIT’s Industrial
16 A new agenda for inclusive growth Performance Center
Liam Byrne, Founder, UK All-Party Parliamentary Group on Inclusive
Growth, and former Chief Secretary to Her Majesty’s Treasury 43 Why workers matter for a successful new production revolution
Lizette Risgaard, President, Danish Confederation of Trade Unions
17 Business brief: Randstad
45 How taxing robots could help bridge future revenue gaps
18 Bridging the generational divide in the UK Xavier Oberson, University of Geneva
Nick Clegg, Former Deputy Prime Minister of the United Kingdom
46 Databank on digitalisation
20 Changing the face of start-ups: Why diversity is not a nice-to-have
but a must-have 47 Business brief: Bomare Company
Nicola Hazell, SheStarts Director, Head of Diversity & Impact,
48 Corporate accountability is essential to human rights in the
BlueChilli Group
network society
21 March on gender Rebecca MacKinnon, Director, Ranking Digital Rights at New America
22 Towards a global market that works for everyone 50 Smartphones are child’s play, but what about the child labour?
Margrethe Vestager, EU Commissioner for Competition Roel Nieuwenkamp, Chair of the OECD Working Party on
Responsible Business Conduct
23 Will labour remain different from the other factors of production?
52 Policy briefs
Branko Milanovic, Graduate Center, City University of New York
and Author
TRUST
24 Business brief: AARP
54 Introduction
26 Basic income: An answer to social security problems?
56 Can we save our democracies from hackers?
Marjukka Turunen, Director of Change Management, Kela, Finland
Rolf Alter, Director, OECD Public Governance Directorate
27 Databank on inclusive growth
58 We need leaders to act in service of future generations
28 Bridging food divides in Nigeria is a global challenge Mary Robinson, President, Mary Robinson Foundation-Climate
Laurent Bossard, Director, OECD Sahel and West Africa Club (SWAC) Justice, former President of Ireland, and former UN High
Commissioner for Human Rights
29 Eating soup with a knife: Confronting warfare in the Sahara
Olivier J Walther, Consultant to the Sahel and West Africa Club 60 We must protect the poorest as the fight of our lives
(SWAC-OECD) at the OECD and Associate Professor, University of Gayle Smith, President and CEO, The ONE Campaign
Southern Denmark 61 Business brief: FGV Projetos
30 Could measuring what matters be a bridge to happiness? 62 Participatory democracy: Portugal’s new frontier
Meik Wiking, Chief Executive, Happiness Research Institute, Denmark; Maria Manuel Leitão Marques, Minister of the Presidency and
Author, The Little Book of Hygge Administrative Modernisation, Portugal
OECD Yearbook 2017 © OECD 2017 3
63 We must invest in the transformational power of higher
education
Colm Harmon, Head of the School of Economics,
University of Sydney
64 Protecting human rights and the spirit of justice
Salil Shetty, Secretary-General, Amnesty International
65 Business brief: International Food Waste Coalition
66 Responsible business conduct and competition: The OECD
Guidelines for Multinational Enterprises and responsible supply
chain management
Karin Buhmann, Professor, Responsible for Business & Human
Rights, Copenhagen Business School (CBS)
69 Business brief: AXA Group
POST TRUTH DEBATE
70 Figures and feelings both count, as a matter of fact
Martine Durand, OECD Chief Statistician and Director, OECD
Statistics Directorate
72 How to make facts matter again
Heidi Tworek, Assistant Professor of History, University of British
Columbia and Fellow, Transatlantic Academy
73 How to stop the slide from info-storms to post-factual
democracy
Vincent F Hendricks, Professor, Director, Center for Information and
Bubble Studies (CIBS) University of Copenhagen, Denmark
75 Digging up facts about fake news: The Computational
Propaganda Project
Rory Clarke and Balázs Gyimesi, OECD Yearbook
76 Databank on trust
77 Business brief: Johnson & Johnson
___
78 The politics of globalisation circa 1773
Emma Rothschild
80 The OECD iLibrary Yearbook selection
82 Great Danes in OECD history: Anker Randsholt on Thorkil
Kristensen
83 Business brief: The City of Newcastle, Australia
84 Don’t Miss
4 OECD Yearbook 2017 © OECD 2017
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INTRODUCTION
We must bridge
divides and make
globalisation work
for everyone
Angel Gurría
D Secretary-General
C
OE of the OECD
©
Faced with a backlash against globalisation that threatens to related to deprivation becoming entrenched at a young age.
trigger a damaging retreat, the OECD has been thinking hard Children are at most risk of poverty, and on average across
about how to better address the downsides while preserving the OECD countries, 17% of 20-24 year-olds are not in employment,
benefits of economic openness. education or training.
During OECD Week in June 2017, both at the OECD Forum on All this has led many people in advanced countries to feel that
6-7 June and the OECD Ministerial Council Meeting on 7-8 June, globalisation is benefitting others, but not them. Moreover, many
we will discuss these questions, we will explore how to bridge feel that some of the processes through which globalisation is
challenging divides in our economies and societies, and we will advanced are insufficiently transparent and democratic. And
seek practical responses to these problems. citizens have been expressing their discontent in the ballot box.
Globalisation, which in a broad sense refers to the growing inte- Is globalisation to blame for the stagnation of middle-class
gration of the flows of goods, services, capital, people and ideas incomes in some advanced economies and the widening dispar-
throughout the planet, has brought net benefits worldwide. By ities of income and wealth? Reality is surely complex, but there
facilitating the spread of know-how, encouraging specialisation are some plausible mechanisms through which it may have
and a more efficient allocation of resources, it has boosted contributed.
global growth and helped lift hundreds of millions of people out
For example, tax systems in the OECD have become less prog-
of poverty. The period of rapid globalisation since the Second
ressive in the past few decades, with a shift of the tax burden
World War has yielded the greatest increase in global prosperity
onto labour. That has contributed to the slow growth of median
in history, despite a near-tripling of the world population, and
incomes and increasing inequality.
it has also helped to spread peace and democracy worldwide.
Europe is perhaps the most striking example: with its four Also, globalisation has deepened the financialisation of our
freedoms–free movement of people, capital, goods and services– economies, which appears to be positively associated with high-
the EU is probably the most highly globalised region of all, and er income inequality across OECD economies. Moreover, financ-
this continent, so ravaged by war over the centuries, has exper- ialisation was a key factor leading to the global crisis, and the
ienced more than seven decades of peace. slowdown in median income growth has been particularly mark-
ed since then.
Nonetheless, there is a growing and widespread feeling of dis-
content towards globalisation in many segments of our soc- In addition, digitalisation–“globalisation on steroids”–is bring-
ieties, anchored in the perception that those benefits have not ing disruption along with opportunity. We estimate that 9% of
been equally shared and may be concentrating in a few hands. jobs are at high risk of being automated. Furthermore, many
new jobs are non-standard, with unclear implications for the
One aspect of this is the slowdown in the growth of median
quality of work.
incomes, which has been particularly marked since the start of
the crisis, though in some OECD countries, real median incomes Lastly, while globalisation should typically foster competition,
have failed to grow for 20 years or more. Meanwhile, incomes there is some evidence that market concentration has been
and wealth at the top end have continued to rise rapidly. Across increasing across a range of industries. Possible globalisation-
the OECD, the richest 10% of the population now earn almost related reasons include “winner-takes-most” features in some
10 times more than the poorest 10%, up from seven times in markets. This tendency towards greater market concentration is
the 1980s. And wealth is even more concentrated than income: associated with an observed widening of the divergence of prod-
the richest 1% of households in the OECD possess 19% of total uctivity and wages between leading and laggard firms within
wealth, while the bottom 40% own just 3%. This has been acc- given sectors. This has also been feeding inequality and yield-
ompanied in many cases by a fall in social mobility, which is ing stagnant incomes for many workers. While all these mech-
6 OECD Yearbook 2017 © OECD 2017
INTRODUCTION
Globalisation is a means
to an end, not an end in itself.
We must ensure that the
growth it fosters is inclusive
and sustainable.
anisms have some plausibility, it is difficult to disentangle glob- This is a welcome trend. The OECD is doing its bit to ensure
alisation from other factors, especially technological change. more inclusive globalisation, including through its support for
If we don’t respond to the concerns being expressed by our the G20 and G7, and we are supporting new initiatives, such as
citizens, we risk seeing a damaging retreat from openness. We the Global Deal launched in 2016 with the Swedish government
urgently need to make globalisation work for all. and the International Labour Organization. This is a multi-
stakeholder partnership to encourage social dialogue to create
That is what our MCM agenda is all about, shaped by Den-
jobs and support more inclusive growth.
mark’s vision as chair of the meeting, and animated by the new
ideas coming from our New Approaches to Economic Chall- We also need to listen to people’s concerns and engage more
enges (NAEC) and Inclusive Growth initiatives; and our Prod- effectively with citizens. The OECD could help governments
uctivity-Inclusiveness Nexus developed at last year’s MCM. better communicate the benefits and challenges of globalisation
Our ministerial discussions, held back-to-back with the OECD through the establishment of a permanent platform for engage-
Forum, will be nourished by rich debates among decision- ment with civil society, as well as continuing our work on open
makers and thought leaders from civil society on how to bridge government.
divides, marshal digitalisation and win public trust in a better,
When it comes to making globalisation work for all, we can
more inclusive, future. Indeed, our attempts to “fix” globalisation
learn a lot from this year’s MCM chair, Denmark. As one of the
to make it work for all will only succeed if they are set in the
world’s most open countries, Denmark has established a robust
context of inclusive growth.
safety net to protect people from the creative destruction that
For example, providing people with adequate income supp- globalisation brings. Indeed, provisions in Denmark ensure
ort in the case of negative contingencies is vital, but it is not that Danes can re-skill, upskill and adapt to innovation and
enough. What is needed is an empowering state. Social protect- technological change.
ion systems must become social enabling systems. Among other
Globalisation is a means to an end, not an end in itself. We have
things, this means focusing on gender inclusion, the integration
to ensure that the growth it fosters is inclusive and sustainable,
of migrants and early childhood education, as well as lifelong
that globalisation works for all. Openness and multilateralism
learning. Policies have to make it easier for workers to part-
are worth preserving and enhancing: they bring greater
icipate in global production networks and adapt to a rapidly
prosperity, peace, innovation, diversity and cultural exchange.
changing environment.
But we will only succeed if we ensure that their benefits are
We also need more and better international co-operation to widely shared.
address problems such as a race to the bottom in standards and
OECD Week 2017 will provide a space to discuss how we can
market-distorting behaviour, as well as aggressive tax avoid-
best preserve openness and multilateralism, bringing to the
ance and irresponsible business conduct. While in some cases
table our analysis and ideas to ensure that globalisation works
new standards may be needed, in others it is a question of broad-
for all.
ening the coverage of existing standards and enforcing their
compliance. The OECD is already working on many of these Adapted from remarks delivered at Copenhagen, Denmark, 27 April 2017
issues.
Also, countries should go further in building standards in trade www.oecd.org/about/secretary-general
and investment agreements. Many modern free trade agree- @A_Gurria
ments (FTAs) have started to address such issues by including
provisions on labour, social and environmental questions, as
well as addressing new issues such as state-owned enterprises.
OECD Yearbook 2017 © OECD 2017 7
INTRODUCTION
Making
globalisation
work: Better
lives for all
©Rights reserverd LPCCarohimuarsinre cLo iMløf Mtiknhekiesee tOte iRnrE,g CaD Ds2em0 nM1mu7inasirsskte eanrni adl
We are faced with a paradox: never before in the course of human blind. And they are not stupid either. What they see is the flip-
history have we enjoyed better standards of living, working and side of the coin: the gap has widened between those who benefit
health as we do in this present period of globalisation–and still from globalisation and possess the energy and the skills to
many people turn against globalisation. Why? embrace the new developments, and those who do not.
This paradox is what we will dissect and discuss at this year’s If we want globalisation to work, we must bridge this gap. We
OECD Ministerial Council Meeting (MCM). It is my hope that the cannot neglect the problems of inequality that globalisation has
deliberations at the meeting and the work of the OECD will also produced. We cannot ignore the genuine concerns of mill-
contribute to enlighten the debate on globalisation and thereby ions of people.
facilitate a work-for-all-approach.
We must narrow the gap by widening the possibilities for more
Let’s start out by reminding ourselves about what globalisation people around the world.
is. It is the process of further integration of our economies and Clearly, our domestic policies will have to adapt to the rapid trans-
societies regarding the exchange of goods, services, capital, peop- itions that globalisation brings. Ultimately, it is the responsibil-
le and ideas. This development has been going on for centuries ity for governments how to distribute the benefits of globalis-
and has accelerated, mainly due to technological progress. ation domestically. It is also a domestic responsibility to put
The wave of globalisation since the Second World War has Globalisation cannot be halted, either
created more opportunities for the people of the world than at
internationally or at our borders. Trying to
any time previously and has lifted more people out of poverty
pretend otherwise would prove very costly.
globally than at any other time in history. Life expectancy is
rising and literacy levels have never been higher. This is true
programmes in place that alleviate the effects of disruption as
for both advanced and less advanced economies. There is no
demand for skills shifts from one category of labour to another,
doubt that the world today is a much better place than before.
such as making sure that the people in need of assistance have
Globalisation has provided present generations with more
access to adequate further education, and the social benefits or
possibilities than that of their parents–my own included. And
other types of interventions needed to support them.
the future too looks bright for the vast majority of the global
population. Like most countries, Denmark continues to seek responses to
the challenges brought about by globalisation and rapid tech-
In addition, many of the problems we are faced with demand
nological change. To me, and to most Danes, the premise has
global co-operation–on climate change, poverty reduction, secur-
always been that globalisation cannot be halted, either inter-
ity and migration, for instance. Actually, to address these issues
nationally or at our borders. Trying to pretend otherwise would
we will need more globalisation, not less.
prove very costly.
Yet, it seems that an increasing number of people do not look
In Denmark, as part of our ongoing national dialogue, we have
upon globalisation as a benefit, but as a threat.
established a Disruption Council where these questions are dis-
cussed among concerned parties, including the labour market
They see their jobs being lost, and replaced by machines, or out-
partners and professional experts. We realise that we have to
sourced to other countries or taken over by immigrants. And
keep upgrading our skills and respond to change in order to
when they look out their windows, each new day seems to hold
adapt to new circumstances. We are aware that the Danish
fewer possibilities for them than the day before.
“flexcurity” model is very instrumental in this regard, but we
Are these people blind? Do they not understand how happy also recognise that this approach cannot be adopted just any-
they are supposed to be? The answer is simple: they are not where. Instead, each country will have to build on its own trad-
8 OECD Yearbook 2017 © OECD 2017
