The Role of the OECD in Shaping the Future of the Digital Economy

USCIB/BIAC/OECD ConferenceAndrew Wyckoff

Director STI10 March 2014

OECD’s Role

1. Early adopter / shaper of the international dialogue

2. Provider of an evidence base

3. Forum for sharing experiences, collective learning

OECD’s Role

1. Early adopter / shaper of the international dialogue

2. Provider of an evidence base

3. Forum for sharing experiences, collective learning

OECD Internet Policy Making: Principles/Instruments

• C(2012)7 - International Mobile Roaming Services• C(2011)154 - Principles for Internet Policy Making• C(2010)61 - Information and Communication Technologies and

the Environment • C(2008)99 - The Future of the Internet Economy (The Seoul

Declaration)• C(2002)131/FINAL - Security of Information Systems and

Networks - Towards a Culture of Security • C(99)184/FINAL - Consumer Protection in the Context of

Electronic Commerce • C(80)58/FINAL – (revised in 2013) Protection of Privacy and

Transborder Flows of Personal Data 4

OECD Internet Policy Making: Key Events

Ministerial Declaration signed by OECD MCs, Egypt, India, Indonesia, Latvia, Senegal, the EU

Interest in adhering from: Costa Rica and Lithuania

Communiqué signed by OECD MCs, Colombia, Costa Rica, Lithuania

First Ministerial on e-commerce in 1998

Google incorporated in 1998; Amazon launched in 1995; Skype didn‘t exist…

1998: Ottawa 2008: Seoul 2016: Mexico2011: Paris

Contribution of the Digital Economy to

growth

The radar screen

• Deregulation• Domain Names• Mobile• BroadBand• E-commerce • Identity

6

What is a digital company?

• TomTom has 5 trillion data points on traffic, adding 6 billion per day.

• BMW cars have 50 sensors, 7 cameras, could recognize open parking spots for other cars

• NEST makes Internet connected thermostats, that save energy use

• GE expects to connect all machines to the Internet, making them more efficient.

Internet of Things / M2M

The emergence of “Big Data”

Estimated worldwide data storage

Source: OECD based on IDC Digital Universe research project.

in e

xaby

tes

(bill

ions

of g

igab

ytes

)56.30

0.05

40

10

10

20

30

40

50

60

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

HHD SSD

CAGR 1998-2012: -39% CAGR 2007-12: -51%

Source: OECD based on Pingdom (2011)

Average data storage cost for consumers, 1998-2012

USD

per

GB

The Long Tail of the OECD

10

OECD’s Role

1. Early adopter / shaper of the international dialogue

2. Provider of an evidence base

3. Forum for sharing experiences, collective learning

High Performance of the ICT Sector

12

Top 250 ICT firms, Index 2000-13

(*) Estimates based on quarterly financial reports. Source: OECD, Internet Economy database, compiled from annual reports, SEC filings and market financials.

ICTs contribute significantly to GDP growth

OECD Productivity Database, November 2013

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ICT investment accounts for only 15% of total investment (GFCF), yet has a large impact on GDP. ICTs also impact multifactor productivity as a driver of productivity growth

-5

-3

-1

1

3

5

1995-2011

Labour input ICT capital Non-ICT capital Multifactor productivity

Decomposition of GDP growthTotal economy, annual percentage point contribution

Benchmarking Diffusion

• OECD countries taking different approaches

• Fixed networks/Backhaul• Spectrum• Remote and rural• Transition to IPv6

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OECD’s Role

1. Early adopter / shaper of the international dialogue

2. Provider of an evidence base

3. Forum for sharing experiences, collective learning

Leverage the Internet for growth and innovation

What needs to be done so economies and societies can fully benefit from the Internet? • User adoption/inclusiveness• Business integration• Openness for innovation• Regulation

Example: VAT for E-books

0% 20%

Effects:• Lower e-book adoption• Less hardware development• Discourages e-learning• Environmental impacts

– VAT differences (CTP)• UK: E-books (20%)• UK: Physical books (0%)

– E-book readers– Online learning (EDU)– Bookstores (ELS)

Country Reviews

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Protecting E-Consumers• Active and informed consumers drive innovation and competition.

Improving information disclosures and providing a minimum level of protection across transactions.

• Key issues– Improving disclosures and protections:

What are my rights and obligations? – Combatting misleading practices:

Should I believe that online testimonial?

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Addressing cybersecurity risks• Security is indispensable for trust but can also inhibit

innovation and development Helping leaders approach cybersecurity for economic and

social prosperity

• Key issues:– National cybersecurity strategies– Risk approach– Government coordination– Public-private co-operation– Innovation and skills– International dialogue– Better metrics

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Promoting responsible use of personal data

• Protecting privacy facilitates global data flowsRevisiting privacy protection in the context of “big

data”

• Key issues– National strategies – Risk management– Data breach notification– Global interoperability

and transborder data flows– Enforcement

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“We support the principles of multi-stakeholder Internet governance developed by the OECD.” – U.S. Secretary of State Hillary Clinton, Dec. 2011

2011 Internet Policy Making Principles