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Better security, better jobs

Korea has one of the lowest unemployment rates in the world. Of developed economies, it also spends among the least money on employment insurance programs. On the outset, this makes a lot of sense. If you don’t have unemployment, why shell out on extensive unemployment benefit programmes?

Bubbles in our future? Certainly!

Have we learned the lessons of the 2008 crisis? Could a new bubble form and burst? This chapter from Donald Johnston’s 2017 book, Missing the Tide: Global Governments in Retreat, provides food for thought.

OECD Observer Roundtable on local firms and automation

Roughly 14% of jobs in OECD countries are highly automatable, while another 32% will be transformed by automation. By 2019, it is estimated that 1.4 million new industrial robots will be installed in factories around the world. How can local firms and their workers adapt to this? How can policy help?  As policymakers and experts gather to discuss such issues at the 14th OECD Forum for Local Development Practitioners, Entrepreneurs, and Social Innovators in Porto, Portugal 18-19 September, we ask our panel:

Going up?

“All human beings are born equal. But on the following day, they no longer are,” said French author Jean Renard in 1907. This is because sticky floors and ceilings–or rags to rags and riches to riches–define the bottom and top income distributions. Today, it takes four to five generations, on average, for children from the poorest 10% of the population to reach median income levels. Meanwhile, about 50% of children of wealthy parents will themselves remain rich in countries like Germany and the US.

Yanis Varoufakis on austerity and the Democracy in Europe Movement (DiEM): OECD Podcast

One country that symbolised the crisis of the last 10 years was Greece. Its insolvency embarked the country on a long regime of bail-outs and austerity. This August, Greece officially emerged from the crisis, with the OECD forecasting GDP growth again. So, did the austerity work? The former Greek finance minister and co-founder of the Democracy in Europe Movement (DiEM) remains unconvinced. Mr Varoufakis was a guest at the OECD’s “10 years after the crisis” conference.

SMEs are key for more inclusive growth

The role played by small and medium-sized enterprises (SMEs) in our economies and societies is very significant. In most cases crucial. In OECD countries, SMEs represent approximately 99% of all firms. They provide the main source of employment, accounting for about 60% of jobs in the manufacturing sector and 75% in services, and generating between 50% and 60% of value added on average. In emerging economies, SMEs contribute up to 45% of total employment and 33% of GDP.

A best case trade scenario…

Given current trade tensions, this question might seem fanciful, but what would happen if tariffs were reduced, rather than raised? 

…And worst case trade scenario

Following our “fantasy global trade” scenario posted here, let’s look at another trade hypothetical: what would happen if the US, China and Europe all raised trade costs on all goods, but not services, by 10 percentage points for all trading partners?

Mexico telecom reform: into the “last mile”

Since Mexico embarked on reform of its telecommunication and broadcast market in 2013, the results can be roundly summarised in a single phrase: price drop, revenue up. With the exception of the price index for pay TV, which has gone up 5%, the cost of roaming, and domestic and international phone calls has dropped steeply, with Mexicans now enjoying some of the lowest-cost mobile services in the OECD area. 

Simpler, clearer, faster, easier: Lower trade costs by cutting red tape

Several years ago at an informal gathering, a colleague of mine asked a senior representative of a major tractor manufacturer why she valued a particular OECD testing standard so much. Her response cut to the point: “Heck, your OECD standard stamped on our tractors gets our product through customs faster, and saves us weeks and dollars.”

book cover
Don’t cry for me

Argentina’s economy has survived recurring states of crises, alternating between periods of recession and high economic growth. The economy, and its people, need to be better equipped to be more resilient to shocks. 

Improving life in France’s lower-income neighbourhoods

While overall poverty is relatively low in France, it can be highly concentrated at the neighbourhood level. In some cases, 40% of households in such neighbourhoods are below the relative poverty line. Unemployment is high, children struggle in school, housing and urban infrastructure is run down, and there is a lack of local employers, public and private services, and amenities. The French government deploys special education, employment, business and safety measures in these areas. 

Can women win on the obstacle course of business finance?

About a decade ago, three academics silently sat in on and recorded 36 hours of closed-room discussion among a group of Swedish governmental venture capitalists made up of two women and five men. The venture capitalists (VC) were going over pitches made by 125 people to obtain financing for their businesses of which 99 were men and 26 women.

World Cups and Olympic Games: How to stop three weeks of fete from turning into 30 years of debt

The 2018 football World Cup has kicked off in Russia, and people around the globe are by now glued to their radios, televisions, and laptops, living each save, each goal, every triumph, every loss. Excitement reigns, but at the same time, some are also turning their thoughts to the future, to 2022 and beyond. Organising and hosting an event on the scale of the World Cup is a massive undertaking, as FIFA, the governing body of world soccer, the OECD, and even the voters of the Swiss canton of Valais, know well.

Investment in renewable energy: What policymakers must do to make it happen

There is enough capital out there and renewable energy technologies have become more cost-competitive, so why is investment still wanting? Policymakers hold the key.

Globalisation: Don’t patch it up, shake it up

In Giuseppe Tomasi di Lampedusa’s novel Il Gattopardo (The Leopard)character Tancredi Falconeri famously says: “If we want things to stay as they are, things will have to change.” The Sicilian aristocracy he represents has only one way to preserve its privileges against Garibaldi’s “Risorgimento”: change things on the surface so that in practice nothing changes at all.

gdp,digital,economy,airbnb,blablacar,internet,sharing economy,digitalisation,web,productivity
Measuring the economy in the age of digitalisation

Recent years have seen a rapid rise in digital transactions, notably through web-based “sharing economy” platforms that have bridged, and indeed blurred, the gap between consumers and producers. But this upsurge has also created new challenges for measuring GDP, and, against a backdrop of slowing rates of productivity growth, has led some to question whether the slowdown reflects these new transactions.

Phase them out!

Fossil fuel subsidies keep fuel prices artificially low, and weigh heavily on government budgets and on the climate too. Phasing out these subsidies will help reduce CO2 emissions and possibly raise public revenues as well.

New energy in the electricity sector

With new business models emerging, competition in the electricity sector is beginning to stir.

The rise of the digital economy has led numerous markets to experience radical innovation in business models. This has shaken incumbent firms and benefited consumers. Electricity is no exception, with green and distributed generators located in the workplace and home already posing existential threats to traditional mass supply-based businesses. And now a variety of new business models are emerging to disrupt retail too. With innovation needed to deliver on commitments to combat climate change and address fuel poverty, radical innovation in the electricity sector holds promising potential. 

Employment now better than in 2008 thanks to services

Employment in OECD countries has finally caught up and passed 2008 pre-crisis figures with 67.6% of the working-age population now with jobs, according to the latest OECD employment numbers. 

Canada climate policy: The plans look great, now let’s go!

"The markets have moved on, the world has moved on, coal is not coming back," said Catherine McKenna, Environment and Climate Change Minister of Canada when she launched the Powering Past Coal Alliance with the UK and 23 partner countries, states and regions at the COP23 climate conference in Bonn on 16 November 2017.

Eurasia: Investing for the future

After an extended period of relatively strong growth, the countries of Eurasia have recently experienced a series of powerful external economic shocks.* Lower global commodity prices, recession in Russia, moderate growth in China and subdued economic prospects in many west European economies have all hit Eurasia hard. The region’s overall GDP fell in 2015 for only the second time in two decades (the first time was in 2009), and growth in 2016 was weak, according to IMF estimates, with accelerations in a few countries offset by downturns elsewhere. The recovery seems to have continued into 2017 but it is uneven and modest at best, and growth is far below the rates achieved in the 2000s.

A new network for open economies and inclusive societies

Who would have guessed just a decade ago that trade and investment policies would emerge today as one of the most contested fields in OECD countries? We’ve had protests about globalisation before, but this time it seems different. As Martin Wolf wrote in the Financial Times, “The era of globalisation under a US-led order is drawing to a close… The question is whether protectionism and conflict will define the next phase”.

oecd, japan, economy, shinzo abe, angel gurria
Japan should boost inclusive growth to help address demographic and fiscal challenges

The Japanese economy has gained momentum, with “Abenomics” playing a key role in the country’s economic revival. But the latest OECD Economic Survey of Japan warns that more needs to be done to underpin inclusive growth, productivity and well-being amid pressures from high and rising government debt and a shrinking workforce.

Labour productivity in 2015

Employment rates have been rising in several OECD countries, but productivity has not kept up. Indeed, a slowdown of productivity growth in the past years continued to undermine rises in economic output and living standards. Labour productivity among the G7 countries was highest in the US where the level of GDP per hour worked was US$68.3 in 2015, followed by France and Germany, while Canada and Japan had levels below the OECD average of $51.1.

oecd,pensions,retirement,ageing,savings
OECD Observer roundtable on pensions

Healthcare is not the only service feeling the effects of ageing populations. Pension systems are also under financial pressure, with policymakers in many countries struggling to find long-term solutions (see for instance www.oecd.org/pensions). We ask a range of experts: 

oecd,china,economy,urban,rural,growth
China's economy

As it enters the 13th Five-Year Plan period (2016-20), the Chinese economy continues to grow fast by international standards. While growth is slowing gradually, GDP per capita remains on course to almost double between 2010 and 2020. As a result, the Chinese economy will remain the major driver of global growth for the foreseeable future. 

health, health care, OECD, oecd observer, francesca colombo
Healthcare systems: Tackling waste to boost resources

Is there such a thing as a right amount of health spending? In an ideal world, this would likely mean spending that achieves effective healthcare services, with good outcomes for patients, the right number of professionals with the right skills, and delivers good value for tax payers with little, if any, wastage. Finding that balance is a difficult challenge. 

mari kiviniemi,gender,women,oecd
Why a push for gender equality makes sound economic sense

This year’s OECD Forum coincides with the celebration of the 20th anniversary of the Beijing Declaration, which was an important milestone to promote gender equality worldwide. Much has been achieved since 1995, but unfortunately, a lot remains to be done to close the gender gap and increase women’s participation in our economies and societies.

Closing the gender gap can boost the economy

Reconciling work and family commitments is a challenge in every country, but particularly for Japanese men and women. Much more so than in most other OECD countries, men and women have to choose between babies and bosses: men choose bosses, women less so, but on the whole there are very few babies and there is too little female employment. These shortcomings are increasingly coming to the fore and will have to be addressed.