productivity challenges in the oecd and ireland · @oecd @oecdeconomy productivity challenges in...
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@OECD
@OECDeconomy
Productivity challenges
in the OECD and Ireland
Future Jobs National Summit
Dublin, Ireland
22 November 2018
Luiz de MelloOECD
Director of Economics Department
Policy Studies Branch
Productivity is essential for growth
Contribution to potential per capita output growth, OECD average
Source: OECD Economic Outlook, November 2018.
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
%
Labour productivity Potential employment rate
Working-age population share Potential per capita growth
Productivity growth is not recovering in
OECD countries…
Source: Sorbe, S., P. Gal and V. Millot (2018) “Can productivity still grow in service-based economies?” OECD Economics
Department Working Papers, forthcoming.
-1
0
1
2
3
4
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
%
Manufacturing
Services
Multifactor productivity growth, OECD average
4
… and gaps are widening among firms…
Source: Andrews, D., Criscuolo, C. and Gal, P. (2016): "The Best versus the Rest: The Global Productivity Slowdown, Divergence across
Firms and the Role of Public Policy", OECD Productivity Working Papers No. 5.
Multifactor productivity, average across 24 OECD countries (Index 2003=100)
Manufacturing Services
100
110
120
130
140
150
Global frontier
Firms below the frontier
100
110
120
130
140
150Global frontier
Firms below the frontier
… especially in ICT services
Source: Andrews, D., Criscuolo, C. and Gal, P. (2016): "The Best versus the Rest: The Global Productivity Slowdown, Divergence across
Firms and the Role of Public Policy", OECD Productivity Working Papers No. 5.
ICT services Non-ICT services
80
100
120
140
160
180
200
Global frontier
Firms below the frontier
Top 2%
Top 10%
80
100
120
140
160
180
200
Global frontier
Firms below the frontier
Top 2%
Top 10%
Multifactor productivity, average across 24 OECD countries (Index 2001=100)
There are large differences in take-up of
new digital technologies
0
20
40
60
80
Social Media High SpeedInternet
EnterpriseResourcePlanning
CustomerRelationshipManagement
CloudComputing
SupplyChain
Management
CloudComputing(complex)
% Highest
Ireland
Average
Lowest
Source: Andrews, D., G. Nicoletti and C. Timiliotis (2018): “Going Digital: What determines technology diffusion among firms?”, OECD
Economics Department Working Papers No. 1476.
6
Percentage of firms adopting digital technology (2015-16)
In Ireland, productivity has yet to
recover in services…
7
Source: Ireland Department of Finance (2018).
Multifactor productivity, median across firms (Index 2006=100)
… where gaps between foreign and
local firms are widest
8
Source: OECD MultiProd.
%
Services
Multifactor productivity difference between foreign and domestic firms (2014)
Digital adoption in firms
Capabilitiesto benefit from ICT by
making complementary
investments
Incentivesto adopt the latest
technologies and
business practices
Human capital & skills
Managerial quality
Education & training
Job matching
Market settingsEntry & exit barriers
Labour market policies
Access to capital
Digital trade
Policy can foster digital adoption
through incentives and capabilities
Source: Andrews, D., G. Nicoletti and C. Timiliotis (2018): “Going Digital: What determines technology diffusion among firms?”, OECD
Economics Department Working Papers No. 1476.
By having better organisational
capital & talent pool
By fostering competition &
reallocation
Structural
policies
Business dynamism can improve…
10Source: Eurostat
… by removing barriers to entry and
exit
11
OECD indicators of Product Market Regulations and Insolvency Regimes
(a higher score denotes stronger barriers)
Source: OECD PMR Indicators and Insolvency Regimes Databases.
0
0.5
1
1.5
2
2.5
State control Barriers toentrepreneurship
Barriers to tradeand investment
Penalties for failedentrepreneurs
Product market regulation Insolvency regime
Ireland
OECD average
Managerial skills can improve through
lifelong learning
12
Percentage of the population aged
25 to 64 participating in
education and training, 2015
Source: Eurostat.Source: World Management Survey.
0
5
10
15
20
25
30
Ireland Italy Germany Portugal Spain United
Kingdom
Sweden
%
Management skill survey scores, 2014
2.5
2.7
2.9
3.1
3.3
3.5
Spain Ireland Portugal Italy United
Kingdom
Sweden Germany
0
1
2
3
4
5
6
7
8
9
Customer RelationshipManagement
Cloud Computing Cloud Computing(high)
%
Highest (GRC)
Ireland
Average
Lowest (BEL)
13
Reducing skill mismatches facilitates
adoption of digital technologies
Source: Andrews, D., G. Nicoletti and C. Timiliotis (2018): “Going Digital: What determines technology diffusion among firms?”, OECD
Economics Department Working Papers No. 1476.
Percentage increase in the adoption of digital technologies by firms
in response to lower skill mismatches
(difference between more and less exposed sectors)
THANK YOU
14
For more information, please visit:
http://www.oecd.org/global-forum-productivity/
http://www.oecd.org/eco/surveys/economic-survey-ireland.htm
OECD
OECD Economics
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