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Report Highlights Importance of Digital Economy

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By Krishan Dutt | IDN-InDepthNews Report

PARIS (IDN) – The 34-nation Organisation for Economic Co-operation and Development (OECD) faults rich and emerging countries of the bloc for lack of a national strategy on protecting online privacy or funding research in this area. This, it says in a new report, tends to be viewed as a matter for law enforcement authorities to handle.

The report titled OECD Digital Economy Outlook 2015 however notes that Information and Communication Technologies (ICT) are transforming the ways social interactions and personal relationships are conducted, with fixed, mobile and broadcast networks converging, and devices and objects increasingly connected to form the Internet of Things (IoT).

The term implies the connection of most devices and objects over time to a network of networks. It encompasses developments in machine-to-machine communication, the cloud, big data and sensors, actuators and people. According to the report, this convergence will lead to machine learning, remote control and eventually autonomous machines and systems.

Estimates indicate that 25 billion devices could be connected by 2020, but challenges remain in gathering concrete and accurate data on the widespread use of IoT technology, now and in the future. Adoption will, therefore, depend to a large extent on the capacity of governments to create an adequate regulatory framework in key areas including telecommunication, privacy and consumer policy, says the report.

The report covers areas from broadband penetration and industry consolidation to network neutrality and cloud computing in the 34-nation bloc and its partner countries like Brazil, Colombia and Egypt. The report stresses the need to do more to offer ICT skills training to help people transition to new types of digital jobs.

According to the report, broadband markets are expanding, with an increase in wireless broadband subscriptions – reaching close to 1 billion subscriptions in the OECD area – offsetting a decrease in fixed telephony. The performance of communication networks is improving with the deployment of fibre and 4G, while prices are declining, in particular for mobile services.

“There is significant potential to expand coverage and improve the quality of fixed and mobile broadband infrastructures. New OECD methodology for measuring advertised fixed broadband speeds will facilitate governments’ ability to maintain progress towards the Internet of Things (IoT),” says the OECD report.

With growing demands placed on networks and more spectrum resources needing to be allocated to mobile communications, the complementarity of fixed and mobile networks will need to be exploited, the report adds.

“The potential is huge for increased adoption and use by firms of ICTs and the Internet to boost growth and innovation, across all sectors. While most firms in OECD countries have a broadband connection – 95% of all enterprises with more than 10 employees in 2014 – few use enterprise resource planning software (31%), cloud computing services (22%) or receive electronic orders (21%), the rport points out. Differences among countries and between small and large firms remain considerable, it adds.

While the digital economy pervades countless aspects of the world economy, impacting sectors as varied as banking, retail, energy, transportation, education, publishing, media or health, its full potential has yet to be realised even in the world’s most advanced and emerging countries constituting the OECD.

The report calls for boosting economic and social growth through national digital agendas. It notes that governments in OECD countries are increasingly aware of the need to develop the digital economy in a strategic manner, to expand its benefits and respond to key challenges such as reducing unemployment and inequalities, and lifting people out of poverty.

Today's national digital strategies cover issues ranging from business creation and productivity growth to public administration, employment and education, health and aging, environment and development. Overall, governments are increasingly aware that “Internet policy making” depends on a set of coherent, whole‑of‑government policies:

Infrastructure, which provides a foundation for new business models, e‑commerce, and new collaborative scientific and social networks, needs to be of high quality, accessible to all and available at competitive prices.

With competition in the digital economy being challenged by several major shifts including technical convergence and the integration of business models among telecommunication providers and new Internet players, governments must also engage in efforts to protect competition, lower artificial barriers to entry, and strengthen regulatory coherence, urges the report.

The consolidation of mobile markets must not reduce innovation or the ability of other actors to compete, it adds.

Encouraging higher uptake of ICTs is essential, particularly by government and businesses including SMEs, says the report.

It adds: Trust in the reliability and security of online networks, services and applications need to be secured, and users assured that their privacy and consumer rights are protected.

The report points out that the OECD has called on leaders and decision makers to integrate digital security and privacy risk management in their broader economic and social risk management frameworks, rather than addressing these issues as separate technical and legal challenges.

“Cybersecurity strategies should be supplemented with national privacy strategies, so as to address privacy issues in a co‑ordinated, holistic manner and identify the limitations society is willing to accept to serve collective public interests,” adds the report.

Through ICT‑related education, training and re‑skilling, people must be equipped with the appropriate skills to make use of ICTs and to manage risks to their online social and economic activities, with a view to fostering entrepreneurship, employment and e‑inclusion.

Recognising the potential disruptive effects of going digital is critical. Governments will need to facilitate the transition of workers to new types of digital jobs., the report adds. [IDN-InDepthNews – 25 July 2015]

Image: OECD

2015 IDN-InDepthNews | Analysis That Matters

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