OECD Observer Q3-Q4 2019

No 319-320 Q3-Q4 2019

www.oecdobserver.org

Seriously!

Why statistics offices need a comedian

Towards a human-centred AI p3, p15 Beyond humanitarian aid p23 Microbial resistance p29 Opioid crisis p33 Your country has talent p41

ŠMike Coppola / Getty Images North America / AFP

Comedian John Oliver

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Happy Birthday at 20.

Or is that 80?

Tim Berners-Lee, who is widely acclaimed as the father of the worldwide web, once reportedly asked how long a year was on the web, three months? And so the web year was born.

The OECD Observer magazine was founded in 1962, but our web platform, www.oecdobserver.org, which is hosted and powered by Pressflex, was launched in September 1999. This makes it 20 years old.

But if we apply Sir Tim’s adage, www.oecdobserver.org is celebrating its 80th birthday.

Things evolve fast online and today there are many web platforms, but there is still only one OECD Observer. Policymakers not only trust it as a smart gateway to OECD intelligence on digitalisation, but have been following us online for years via e-alerts, RSS feeds and social media. And now, with Augmented Reality bringing our multimedia content alive, we are making our paper versions go digital too.

That is worth celebrating.

You can read “Whence the web?” to find out how the worldwide web was born in the OECD Observer. Published in 2000. That’s just 76 web years ago.

Intelligence for policymakers

CONTENTS No 319-320 Q3-Q4 2019 www.oecdobserver.org

YOUR VIEWS

EDUCATION

DATABANK

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20

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37 Your country has talent; Not all jobs are created equal 38 Main economic indicators 40 Higher education rises but leaves question marks; Crossword

Bees and the environment, Activism as lobbying, No fear of automation; Twitterings

EDITORIAL 3

Setting course for a human-centred AI Angel Gurría, Secretary-General of the OECD

DEVELOPMENT & GOVERNANCE

NEWS BRIEF 4

Building a collaborative culture for teachers Andreas Schleicher Teachers’ pay: Mind the mid-career gap Anne-Lise Prigent

Skills mismatch warning; Fossil fuel support threatens climate action; New development standard to fight abuse; Working past 65; Soundbites; Economy; Country roundup; Other stories; Plus ça change

BLOGS 6 BlogServer

ECONOMY 9 Gig workers and the tax web

Anna Milanez 11 How policy can make a world of difference for small and medium-sized enterprises

Lamia Kamal-Chaoui 12 Why statistical offices should hire a comedian

Vincent F. Hendricks, Professor, Director of the Center for Information and Bubble Studies, University of Copenhagen, Denmark and Johannes Jütting, Manager of the Partnership in Statistics for Development in the 21st Century (PARIS21), Paris, France

GOING DIGITAL 15 AI society: How people can make artificial intelligence work for all

Rory J Clarke 17 AI and Europe’s medium-sized firms: How to overcome an Achilles heel

Benoît Bergeret, Founder, CEO, indust.ai; Founding Board Member, Hub France IA 19 Blockchain is a major technology of the 21st century Bruno Le Maire, French Minister of the Economy and Finance

23 Beyond humanitarian aid: Connecting the dots

Cyprien Fabre, OECD Development Co-operation Directorate 25 Linking Indigenous communities with regional development

Dawn Madahbee Leach, General Manager, Waubetek Business Development Corporation, and Vice-Chair of the National Indigenous Economic Development Board of Canada, Lars-Anders Baer, Chairperson of the Working Group for Indigenous Peoples to the Barents Euro-Arctic Co-operation, and Peter Yu, Chief Executive Officer of Nyamba Buru Yawuru Ltd and Chair of the Indigenous Reference Group to the Northern Ministerial Council.

27 A guide for tackling fraud and corruption in EU investment funds

Lisa Kilduff

AI and Europe’s SMEs, p17

HEALTH 29 Microbial resistance: The battle continues

Anne-Lise Prigent

OECD.ORG

Building a collaborative culture for teachers, p20

30 Profound change needed on climate, AI principles also affirmed at G20 Summit, Mali and the OECD 31 Recent speeches by Angel Gurría; List of OECD Ambassadors 32 Calendar; Frankie

BOOKS 33 Reviews: Treat the opioid epidemic as a public health crisis; Watching your basic behaviour 34 New publications 35 Focus on education 36 Review: Middling through

Linking Indigenous communities with regional development, p25

All signed articles in the OECD Observer express the opinions of the authors and do not necessarily represent the official views of the OECD or its member countries.

www.oecdobserver.org www.oecdinsights.org ©OECD September 2019

Published in English and French by the OECD EDITOR-IN-CHIEF: Rory J Clarke EDITORS, WRITERS: Kate Lancaster, Anne-Lise Prigent EDITORS: Cara Yakush, Fernanda Sapina LAYOUT: Design Factory, Ireland ILLUSTRATIONS: David Rooney, Sylvie Serprix ADVERTISING MANAGER: Aleksandra Sawicka

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Applications for permission to reproduce or translate all or parts of articles from the OECD Observer, should be addressed to: The Editor, OECD Observer, 2 rue André Pascal, 75775 Paris, cedex 16, France.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Founded in 1962. The magazine of the Organisation for Economic Co-operation and Development OECD Publications 2 rue André Pascal 75775 Paris cedex 16, France observer@oecd.org www.oecd.org

Reprinted and translated articles should carry the credit line “Reprinted from the OECD Observer”, plus date of issue. Signed articles reprinted must bear the author’s name. Two voucher copies should be sent to the Editor. All correspondence should be addressed to the Editor. The Organisation cannot be responsible for returning unsolicited manuscripts.

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

Your views We welcome your feedback.

Send your letters to observer@oecd.org or post your comments at www.oecdobserver.org

Torsten Bell @TorstenBell But how heavily are we currently taxed?

All the debate focuses on tax take as a share of GDP—ie the size of our economy. On that measure historically we’re up (from the lows of the early 90s) but still below the OECD average and northern European norms.

Tom Johnstone @itjohnstone On the impact of increasing life expectancy in wealthy OECD countries on health, healthcare & social support systems: yes populations are ageing, but not because people who live to 65 are going on to live much longer than they were 20 years ago.

It’s more about demographic mix.

Pedro Facon @PedroFacon Health at a Glance 2019: a must-read for each actor and stakeholder in healthcare.

Comparative statistics help us to identify strengths and weaknesses of our healthcare system and to learn from good practices in other countries. @OECD_Social

Bees and the environment

Twitterings

Since my childhood, I have always been fascinated by bees and beehives. They work in a very complex yet organized fashion.

Let’s protect them and our environment.

Sometimes we forget how all our lives depend on a very delicate balance with the other species and our habitats.

Robin Oglivy @RobinOglivy Just read new @OECD report that brings worrying news before #UNClimateSummit.

In advanced and emerging economies, 70% of energy-related CO2 emissions are entirely untaxed! Read here: http://oe.cd/2IB

Angela Capogrosso Sansone on LinkedIn, commenting on #WorldHoneyBeeDay, May 2019

Activism as lobbying The will of the people is received by way of elections, not by way of who shouts the highest. From that perspective, activism is about as democratic as lobbyism, and about as unpalatable when taken to extremes.

Björn Erling on LinkedIn, commenting on “How has #activism changed—and why is it more important now than ever?”, September 2019

No fear of automation Resisting automation is wasteful and ultimately pointless. Rather we need to prepare and train people to rise to a higher level and work alongside robots.

Luis Wolff Kono on LinkedIn, commenting on “1 in 6 middle-income workers are in jobs at high risk of automation. Are we ready for #thefutureofwork?”

Experts from around the world will weigh in at the #OECDForum, June 2019

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Alice Lyall @alicelyall Coastal tourism & climate change: decision makers seem unsure how to react; industry still focused on growth; only 25% of countries surveyed by OECD considered climate change in tourism policy!

Nico Fulton @FultonNico Did you know DRC has >60% global cobalt?

Vital for rechargeable batteries and achieving zero emissions. Important @OECD_BizFin report this week in #Kolwezi to tackle corruption and human rights concerns around cobalt. We must make our economy green AND clean.

Prerana Mehta @cyberecowarrior ‘What is more challenging now is not to start-up, but to accelerate....we need pioneers to stay the course—and then maybe we can build cyber security ecosystems’. High energy honest discussions at the OECD Global Forum in Digital Security for Prosperity #GFDSP in the UK.

Marc-Antoine Dilhac @MarcADilhac The Global Partnership on AI is now on the right track. Very happy to see Canada, France and the OECD working together, with many other countries (UK, Germany, Japan, etc.) and major international organizations (UNESCO) to deploy AI that benefits humanity. It makes a difference.

Glen Peters @Peters_Glen Global coal use is really China coal use superimposed on the decadal decline in OECD & rise in non-OECD. If global coal use has peaked or not, is really a question of Chinese coal use... https://bp.com/en/global/corporate/ energy-economics/statistical-review-ofworld-energy.html Bill Hare @BillHareClimate The ALP has a special responsibility to really be honest with coal regions about what the climate crisis means. Global coal use in electricity generation must fall by 80% below 2010 levels by 2030 and OECD nations should end coal use entirely by 2030.

Follow us on Twitter @OECDObserver Comments and letters may be edited for publishing. Send your letters to observer@oecd.org or post your comments at www.oecdobserver.org, or at the other OECD portals on this page.

EDITORIAL

Setting course for a human-centred AI We must seize the potential of AI and prepare and protect future generations Angel Gurría Secretary-General of the OECD

Fifty years ago, the world watched in awe as the first humans landed on the moon. Today, artificial intelligence (AI) is helping us to build on this achievement, by giving us the power to map the moon, to locate and count craters, and even (virtually) to moonwalk!

Here on earth, AI has the potential to catalyse remarkable progress in our education, health, transport, social protection, communication and energy systems. It can also help us meet our global ambitions, including the Sustainable Development Goals (SDGs) and the Paris Climate Agreement.

But AI is also fuelling anxieties and ethical concerns. Many fear that it will facilitate automated discrimination, by codifying existing biases from the analogue world into the digital world, including those related to gender, race or the justice system. To realise the full potential of this promising technology, we need one critical ingredient: trust. We need human-centred AI that fosters sustainable development and inclusive human progress.

A few priorities should be highlighted.

First, we must seize AI’s potential for productivity and scientific advances. AI holds significant potential to drive productivity gains.

It is helping people make better predictions and decisions, be they a doctor, a shop-floor manager or a farmer in the field. AI start-ups attracted over 12% of all worldwide private equity investments in the first half of 2018, reflecting this economic potential. AI can also increase the productivity of science. More than a decade ago at a laboratory in Wales, a robot named Adam became the first machine to discover new scientific knowledge independently–a compound that works against a drug-resistant parasite that causes malaria.

But such advances are not automatic; significant complementary investments are needed to support them. Many firms do not even use relatively basic digital technologies, let alone AI. In fact, OECD analysis shows that only 11% of small firms perform big data analysis. Meanwhile, the growing prominence of AI in science is raising important policy questions around access to data and high-performance computing, intellectual property, and education.

Second, we must prepare for the transformation of the labour market and build skills. For workers, technological change presents great opportunities. It can improve flexibility, productivity and earnings; and it can also reduce exposure to dangerous, unhealthy and tedious tasks.

But there are risks. Across OECD countries, on average, around 14% of jobs are at a high risk of automation in the next 10-15 years, and

a further 32% are at risk of disruption. AI will change, and perhaps accelerate, the profile of tasks that may be automated. There are also risks of increasing inequalities. In a rapidly changing world, lifelong learning is an imperative for everyone, particularly low-skilled workers.

We must prepare and protect future generations. The OECD’s Learning Compass for 2030 outlines the need to adapt education so that our children become digitally aware citizens. This means going beyond literacy and numeracy, and fostering data and digital literacy. But having technical expertise and training a new generation of data scientists and digital experts are not enough.

It will also be crucial to teach them social and emotional skills, as well as a sense of responsibility and ethics.

The third priority is to put AI at the service of the environment.

AI can accelerate the transition to a circular economy, for instance, reducing environmental pressures and the risks of raw material supply shocks. In fact, AI can help improve industrial production by making physical assets more intelligent and boosting data driven decision-making. This will help firms to extend product life, minimise waste, and optimise the performance of their systems and processes.

AI is also spurring innovative environmental policy approaches, for example, by working with industry to develop electronic waste tracking systems. The OECD is setting a course for human-centred AI. The OECD recognises that actions at the margin will not be enough to harness AI for sustainable development. We need a comprehensive approach.

In May, we launched the OECD Recommendation on Artificial Intelligence to promote the responsible stewardship of trustworthy AI. The Recommendation advances the first-ever set of intergovernmental principles on AI, includes technical definitions, principles for responsible stewardship of trustworthy AI (including human-centred values and fairness, transparency and explainability, robustness and accountability), recommendations for national policies and advice for international co-operation. In July, G20 Leaders endorsed the G20 AI Principles, which are largely drawn from the OECD Recommendation on AI. We will continue to advance multi-stakeholder collaboration on AI, with the launch of the OECD AI Policy Observatory, to facilitate the development of evidence and practical guidance for policymakers and act as a hub for OECD work on AI. Masayoshi Son, the founder of Soft Bank, said of AI, “If we misuse it, it’s a risk. If we use it in good spirits, it will be our partner for a better life”.

We must harness the efficiency and intelligence of AI to build a better world where growth is inherently sustainable, inclusive and beneficial to all. oe.cd/obs/2R6

@A_Gurria

www.oecd.org/about/secretary-general/

www.oecdobserver.org/angelgurria

Adapted from keynote address on “AI for Sustainable Development”, delivered at the London Business School, 9 September 2019. For the full version, see https://oe.cd/2OV For more on the OECD AI Principles and AI Policy Observatory, visit our Going Digital platform at www.oecd.org/going-digital/ai/

OECD Observer No 319-320 Q3-Q4 2019

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©Reuters/Peter MacDiarmid

News brief Skills mismatch warning

Soundbites

More students are obtaining a higher education than ever before. In OECD countries, 44% of 25-34 year-olds in 2018 had done so, compared to 35% in 2008, according to Education at a Glance 2019. The returns to education are clear: as those who have completed higher education are more likely to find a job than those who only have finished high school and they earn more too. But are students graduating with the skills they need to find work today—and tomorrow?

Some sectors in high demand can’t find workers with the right skills. Less than 15% of new students in bachelor’s programmes choose to study engineering, manufacturing and construction, while less than 5% study IT, despite these sectors having among the highest employment rates and earnings. Women are particularly under-represented, making up fewer than one in four entrants, on average, across OECD countries.

Our house is burning down and we’re blind to it.[…] Let us make sure that the 21st century does not become[…] the century of humanity’s crime against life itself.

See www.oecd.org/education

Fossil fuel support threatens climate action

New development standard to fight abuse

Government support for fossil fuel production and use is on the rise again, after a drop between 2013 and 2016, threatening efforts to curb greenhouse gas emissions and air pollution, and the transition to cleaner and cheaper energy.

Support across 76 countries increased by 5% to $340 billion in 2017, according to a new OECD-IEA report.

The OECD’s Development Assistance Committee (DAC)—made up of 29 donor countries and the EU—has agreed on a comprehensive set of recommendations aimed at preventing sexual exploitation, abuse and harassment. National aid agencies will be able to apply the measures when working with civil society, charities, and other bodies running development programs or delivering humanitarian aid.

See www.oecd.org/fossil-fuels

Economy Real GDP growth in the OECD area slowed to 0.5% in the second quarter of 2019, compared with 0.6% in the previous quarter, according to provisional estimates. It slowed markedly in the UK, to -0.2% from 0.5% in the previous quarter, and in Germany, to -0.1% from 0.4%. It also decelerated more moderately in the US and Japan, to 0.5% and 0.4%, and more marginally in France and Italy, to 0.2% and 0.0%. GDP growth also slowed in the European Union and the euro area, to 0.2% compared with 0.5% and 0.4%, respectively, in the previous quarter. Year-on-year GDP growth for the

4

Former French president, Jacques Chirac, who died 26 September 2019, addressing the World Summit on Sustainable Development, 2 September 2002. See www.jacqueschirac-asso.fr This is all wrong. I shouldn’t be up here.

I should be back in school on the other side of the ocean, yet you all come to us young people for hope. How dare you?

Greta Thunberg at the UN Climate Summit, 23 September 2019, Washington Post That “greatness” that I have achieved is something that everybody has the ability to create and be. Really, any one of us has this power.

Xiuhtezcatl Martinez, Indigenous rights and climate activist, artist, 28 August 2019, Landscape News

Working past 65 In the face of rapid population ageing, governments must promote more and better job opportunities for older workers, in order to protect living standards and the sustainability of public finances, according to a new OECD report. Working Better with Age projects that the number of older people (50+) who will need to be supported could reach 58 per 100 workers in 2050, on average in the OECD.

See www.oecd.org/development

See www.oecd.org/employment

OECD area slowed slightly compared with the previous quarter, to 1.6% from 1.7%. The US recorded the highest annual growth, at 2.3%, while Italy recorded the lowest, at 0.0%.

growth rates. In Japan and Italy, the CLIs continue to point to stabilising growth momentum.

The OECD’s composite leading indicators continue to anticipate easing growth momentum in the US and the euro area as a whole, particularly in Germany.

The CLIs continue to signal stable growth momentum in the OECD area as a whole and in France and Canada. In the UK, for which large margins of error persist due to Brexit uncertainty, the assessment remains for stable growth momentum, albeit around historically low trend

OECD area inflation picked up to 2.1% in July 2019, from 2.0% in June, as annual inflation excluding food and energy increased to 2.3%, compared with 2.2% in June. Energy prices were flat, following the -0.2% decrease in June, while food price inflation slowed slightly to 2.1%, compared with 2.2% in June.

The OECD unemployment rate was stable at 5.2% in July 2019. Across the OECD area, 33.3 million people were unemployed. The unemployment rate

NEWS BRIEF

Country roundup Luxembourg’s economy has grown at a robust pace and the country has enviable levels of well-being, but public policy must do more to preserve and share prosperity. www.oecd.org/luxembourg

Canada has the largest and most comprehensive and elaborate skilled labour migration system in the OECD, thanks to its selection system and the comprehensive infrastructure and data collection that support it. This allows for swift policy reaction to new evidence and emerging challenges. www.oecd.org/canada Sound macroeconomic policies and favourable external conditions have enabled Iceland’s economy to emerge stronger post-crisis. Yet a drop in tourist arrivals and seafood exports underlines the need for reforms to open up and diversify the economy and improve its resiliency to sectoral shocks. www.oecd.org/iceland New Zealand’s economy has stabilised, with solid growth supporting well-being through jobs and incomes. Ongoing implementation of the government’s new well-being approach will offer further opportunities to create a more sustainable and inclusive economy for all New Zealanders. www.oecd.org/newzealand

was also unchanged in the euro area (at 7.5% in July), with changes of 0.1 percentage point or less in most countries.

Outside Europe, the unemployment rate increased in October by 0.1 percentage point in Australia, Korea and the United States, but remained stable in Canada, Japan and Mexico and declined by 0.2 percentage point in Israel.

For more, see www.oecd.org/sdd/ statisticsnewsreleases.htm

©OECD

In Japan, narrowing the productivity gap requires enhancing product market competition and SME competitiveness.

Barriers to trade and investment inflows should be reduced to deepen Japan’s integration into the global economy. www.oecd.org/japan

Liliane Maury Pasquier, President of the Parliamentary Assembly of the Council of Europe, with OECD SecretaryGeneral Angel Gurría, during the OECD Global Parliamentary Network, 10 October 2019.

Active bribery may no longer be a felony in Greece as recent amendments to its Criminal and Procedural Codes may have left the country in breach of the OECD’s Anti-Bribery Convention.

The OECD Working Group on Bribery is concerned that this may have farreaching ramifications. www.oecd.org/greece Latvia’s economy is thriving, but boosting productivity, improving social protection and shifting to a low-carbon productive model are vital for sustainable and inclusive growth. www.oecd.org/latvia Malaysia’s economic performance has been very successful, but public policy can do more to address social and governance challenges while making growth stronger, greener and more inclusive. www.oecd.org/malaysia Enhancing migrant integration is one of Sweden’s priorities in 2019. Helping migrants—especially female migrants— to integrate into society and increasing their employability, is helping to boost the Swedish economy. www.oecd.org/sweden

Consumer prices, selected areas July 2019, % change on the same month of the previous year % OECD total 6.0 4.0

All items Food

2.0

Energy

0.0

All non-food, non-energy items June 2019

-2.0

Other stories Governments provide more than US$500 billion in often ineffective and trade distorting support to farmers each year, and efforts to reform agricultural policies have largely stalled, according to a new OECD report. See www.oecd.org/agriculture Governments must take further action to boost job opportunities at an older age. In the face of rapid population ageing, governments must promote more and better job opportunities at an older age to protect living standards and the sustainability of public finances.

See www.oecd.org/employment Experts seeking new approaches to avert systemic collapse related to climate change met at OECD in September.

Conservation scientists warned that up to a million plant and animal species faced extinction, while climate experts said the health and security of billions would be affected by rising sea and temperature levels. Economists asked when the next global recession would hit.

See www.oecd.org/naec

Plus ça change…

Teaching, a once esteemed vocation, appears to be in some difficulty. The profession is ageing in a number of OECD countries, as it fails to attract qualified young people. Reversing this will be difficult unless teachers’ pay becomes more competitive with that of other careers. More fundamentally, should governments, communities and parents not make creative efforts to restore the prestige of this critical occupation? After all, in our information-filled age, we still need guidance on what is worth learning.

“Teaching for lifelong learning”,

by OECD Secretary-General Donald J. Johnston, in Issue No 225, March 2001

OECD Observer No 319-320 Q3-Q4 2019

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BLOGS

BlogServer on basic rights and duties, key features of political institutions and the voting process. This approach dovetails with the idea of representative democracy, where civic education aims to ensure that future voters are ready to evaluate public officials’ performance and fitness for duty.

From OECD Education and Skills Today. More here: https://bit.ly/2YL6kzt

What regional data tells us about educational attainment and labour-market outcomes Simon Normandeau, Statistician, OECD Directorate for Education and Skills

100 things we’ve learned from PISA Marilyn Achiron, Editor, OECD Directorate for Education and Skills

We’ve compiled a list of 100 things we’ve learned from PISA over the past eight years. Scroll through the full list, test your knowledge on our new PISA quiz, ahead of the 3 December release of brand new PISA results!

From OECD Education and Skills Today. More here: https://bit.ly/36ACrEN

Why it’s so hard to compare early childhood education and care across the world Eric Charbonnier, Analyst, OECD Directorate for Education and Skills

There is a growing consensus across the world about the importance of quality early childhood education and care (ECEC).

Evidence shows that participating in high-quality ECEC can have a positive effect on children’s well-being, learning and development in the first years of their lives. But when we talk about ECEC at the international level, are we really talking about the same thing?

The answer isn’t as obvious as it may seem–primarily because ECEC can take very different forms in different countries.

From OECD Education and Skills Today. More here: https://bit.ly/2YGNzx6

Degrees or competencies? A new job language for the new economy Guillermo Elizondo, CEO & Founder, Territorium Life

Our economies are facing an immense challenge: high levels of unemployment and a shortage of job seekers with the needed skills. There is also a tremendous gap between the language companies and education providers use to describe skills. The critical question is how can education can really help people get the skills to find a job? Which style of learning can help people to become productive?

From the OECD Forum Network. More here: https://bit.ly/34mQV9T

How education can help bolster civic engagement

Our analysis finds that most people without upper secondary education struggle to find employment, at both the national and regional level. There are only 10 regions where more than 80% of low-educated younger adults are employed. Tertiary educated young adults fare notably better in the job market. Employment rates for 25-34 year-olds with tertiary education are at least 80% in 237 regions, suggesting that attaining higher education is likely to reap benefits wherever you live.

From OECD Education and Skills Today. More here: https://bit.ly/2PHOM31

It is never too late to invest in teachers’ professionalism Markus Schwabe, Statistician, OECD Directorate for Education and Skills

When it comes to the content and pedagogy of the subjects they teach, lower secondary teachers generally feel well prepared, according to results from our latest Teaching and Learning International Survey (TALIS). But less than half feel well prepared in areas of growing importance, such as using technology in teaching, teaching cross-curricular skills, or teaching in multicultural or multilingual environments. This could be attributed to teachers’ education and training in many countries, which traditionally focus on subject-based instruction, rather than new crosscurricular, problem-solving or project-based forms of teaching.

From OECD Education and Skills Today. More here: https://bit.ly/2EezUUt

We need new education spending priorities to build the skills of the future Stefanie Schurer, Associate Professor, School of Economics, University of Sydney

The next 50 years will see an unprecedented increase in the degree of automation and worker replacement through the emergence of artificial intelligence. Under the assumption that we keep today’s model of training our workforce, ever larger numbers of individuals will be excluded from the labour market, relying on governmental social protection schemes. We need new sweeping changes to our spending priorities. OECD governments need to radically rethink their model of human capital investment and learn to identify the areas of investment with the highest returns.

From the OECD Forum Network. More here: https://bit.ly/2qMp9ph

Marc Fuster Rabella, Analyst, OECD Directorate for Education and Skills

Civic education is part of the curriculum in all OECD countries.

Civics at school usually focuses on building students’ knowledge

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These extracts from blogs appeared in Q3 2019 and are courtesy of the OECD Forum Network and OECD Education and Skills Today.

A people powered initiative by the OECD The future of work is now.

Digitalisation has sparked changes which are radically affecting our working lives.

We are using new technologies to do our jobs more efficiently, finding work through online platforms, and collaborating in new ways with colleagues across countries.

Yet, these benefits are not shared by everybody. Many are experiencing the negative effects of growing inequality in wages, opportunities and risks – worrying trends for the future if left unresolved.

Through the “I am the Future of Work campaign”, the OECD is seeking to contribute to a positive future of work. We are gathering people’s perspectives and ideas about work and fostering solutions-oriented conversations across sectors and countries.

Together, we can build a better world of work for all.

OUR PRIORITIES

DIGITALISATION

SKILLS & LEARNING

SOCIAL PROTECTION

JOB QUALITY

How can technology shape the future of work in a positive way?

How do we keep skills and learning relevant in the changing world of work?

How can we improve social protection so that everyone benefits?

How can we make sure job quality is a top priority?

We want a future that works for all Photos © Agence MYOP

futureofwork.oecd.org

For information on our campaign, contact France Charlet at the OECD. Campaign visual identity and design: bearideas

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ECONOMY

Gig workers and the tax web Anna Milanez, OECD Centre for Tax Policy and Administration

oe.cd/obs/2Ra

©Jamie McCarthy/Getty Images/AFP

Non-standard jobs usually cost less

The gig economy is changing how labour is taxed, affecting employers, workers and public finances. This is why.

tax bills at the same time. But this could also cost the rest of us, in the form of lost public revenues.

When is a worker an employee? That’s a multi-million dollar question these days, especially for government tax revenues.

In some countries, this may not be the case much longer. The status of gig workers as independent contractors has recently been challenged in California, where a new law aims to put an end to such practices, under certain criteria.

Similar measures have been proposed or put in place in several other US states and some European countries. This is an area where the law is evolving rapidly.

A recent OECD working paper digs deeper into the tax implications of different forms of work, comparing how tax systems treat independent contractors and other non-standard workers in eight countries, looking at whether the differences in treatment permit firms to reduce their tax obligations.

Take the growing gig economy, spurred by the digitalisation of the economy.

Think of food delivery services, ride-hail cab companies, and babysitters, whose services you may have hired with a tap on your phone or click of your mouse.

Gig workers are usually considered self-employed, freelancers or independent contractors rather than as employees in the traditional sense.

Classifying such workers as “independent contractors” rather than as employees might make hiring more flexible, but also means workers may not be receiving the social protections and benefits that employees generally do, such as minimum wages, unemployment insurance, health insurance, or paid leave. Employers that choose to hire workers as independent contractors may avoid the costs associated with many labour protections, lowering their

Such potential for tax arbitrage across various kinds of employment may mean that firms and individuals carry out similar activities yet be taxed differently. This can undermine the effectiveness of tax systems and has important implications for equity too.

As the working paper highlights, firms

that contract labour from self-employed workers instead of hiring standard employees generally face lower tax burdens per worker hired.

For example, in the Netherlands, the tax cost of hiring an independent contractor is 37% lower compared to the cost of hiring a standard employee, reflecting a substantial labour cost savings for

Tax systems can encourage employers to classify workers as independent contractors to lower their tax bills firms. This is because the employer of an independent contractor is not liable for social contributions for the worker and also because such contractors are entitled to make certain deductions from their income tax, lowering both their own tax burden and their employer’s.

The Netherlands is not alone in this.

In fact, employer liability for social insurance does not extend to selfemployed workers in most of the countries analysed in this paper. One factor contributing to more equal tax

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treatment across employment forms is higher social contribution requirements for independent contractors compared to those for employees. In both Italy and in the United States, independent contractors must contribute at higher levels, replacing the foregone employer’s contribution. In such countries, there is less of a threat to the financing of social protection.

Policymakers need to evaluate and re-evaluate tax systems to ensure that they keep pace with today’s evolving labour market. To date, labour taxes have been the largest tax category in almost every OECD country. This means that, in countries where the difference in the total employment cost savings between employees and the self-employed is large, firms have strong incentives to hire

Non-standard jobs usually cost less

Percentage Difference in Total Employment Cost Relative to Employee (%)

% difference in total employment cost of non-standard workers relative to employee (%) -40%

Argentina

-30%

-20%

-10%

0%

Unincorp. self-employed (simplified regime) Unincorp. self-employed

Australia

Genuine independent contractor–sole trader Genuine independent contractor–owner manager Independent contractor treated as an employee Genuine independent contractor–incorporated

Hungary

Sole trader (low-skilled) Sole trader (high-skilled) Owner Manager (low-skilled) Owner Manager (high-skilled) Quasi self-employed

Italy

Continuous & coordinated staff CIT-paying firm Unincorp. self-employed

Netherlands

Unincorp. self-employed Incorp. self-employed

Sweden

Unincorp. self-employed Incorp. self-employed

UK

Sole trader Owner manager

US

Sole proprietorship

10%

workers on non-standard contracts. In these cases, the tax systems may be driving up demand for non-standard work.

The digitalisation of the economy has ushered in a variety of business models centred on intermediation between consumers and contractors. Many of them harness differences in taxation across employment forms to achieve tax-related labour cost savings. Yet there are important implications for workers, employers and the state alike. While firms are naturally motivated to save on tax-related labour costs, this dynamic could threaten public revenues and may lead to a world in which workers in precarious positions lack important social protections. Tax and benefit systems should be reformed to ensure that firms are not unduly encouraged to use independent contractors as a way of lowering their tax bill.

At the same time, legitimate selfemployment should be encouraged.

Nor should all forms of work be taxed in the same way. While tax design principles suggest that tax systems should be neutral across employment types, there may be differences between workers in terms of the benefits and other entitlements they receive, which may merit different tax treatments, if there are sound policy rationales.

References and further reading Visit www.oecd.org/taxation Milanez, A and B Bratta (2019), “Taxation and the future of work: How tax systems influence choice of employment form”, OECD Taxation Working Papers, No 41, OECD Publishing, Paris, https://doi.org/10.1787/20f7164a-en.

Milanez, A and B Bratta (2019), “Annex-Taxation and the Future of Work: How Tax Systems Influence Choice of Employment Form”, OECD Taxation Working Papers, No 42, OECD Publishing, Paris, https://doi.org/10.1787/6b20cce5-en.

Young, Clara (2019), “Are platform workers really their own bosses?”, in OECD Observer No 317, Q1.

S corporation C corporation Source: Anna Milanez and Barbara Bratta’s calculations based on OECD responses, see OECD Taxation Working Paper No 41, Fig 12

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Source: Authors’ calculations based on OECD questionnaire responses.

oe.cd/obs/2Ra

ECONOMY

How policy can make a world of difference for small and medium-sized enterprises oe.cd/obs/2Rb

Lamia Kamal-Chaoui, Director, OECD Centre for Entrepreneurship, SMEs, Regions and Cities.

in the United States, and 66% in Germany and the United Kingdom, were in lowwage sectors, which contributed to a stagnation in average wages and to widening inequalities.

transformation and engage more employees in training for digital workplaces. Recent progress in engaging in vocational education programmes and in closing the training gap with large firms must be strengthened in order to bridge the skills divide.

Some SMEs are taking the lead at the knowledge frontier: there are major innovation and productivity champions, particularly in specialised services such as professional, scientific and technical activities, where size does not play such a key role. Yet, many SMEs are stalling when it comes to investing in the skills, tech and innovation that would be needed to boost wages and productivity.

Policies should help SMEs take advantage of new opportunities in the production revolution by embracing the likes of big

Action is needed now, to enable SMEs to make the most of emerging opportunities...

In particular, SMEs lag in digitalisation.

Policies are needed to make them more proactive in adopting digital practices and in protecting their data, and to be better prepared to face cybersecurity threats. More effort is needed to improve skills to manage their digital

There are challenges on the horizon.

The SME engine has restarted, driving job creation since 2010, but new jobs have often been in low-productive low-paid activities. Between 2010 and 2016, close to 90% of the net new jobs in France, 75%

data analytics and artificial intelligence to improve the differentiation and customisation of their goods and services.

Digitalisation can help SMEs integrate into global markets and value chains.

Internationalisation represents another

More training needed to improve skills for digital workplaces % of businesses providing IT training to their employees, by size class, 2012 Small firms (10-49 employees)

Medium firms (50-249 employees)

2018

Large firms (250+ employees)

New Zealand Norway Finland Belgium Ireland Germany UK Denmark Slovenia Austria Luxembourg Netherlands Iceland Sweden Czech Republic Spain France Portugal Italy Hungary Slovak Republic Greece Estonia Poland Latvia Lithuania 0

10 20 30 40 50 60 70 80 90 100%

0

10 20 30 40 50 60 70 80 90 100%

0

10 20 30 40 50 60 70 80 90 100%

Source: OECD SME and Entrepreneurship Outlook 2019

10

20

30

40

50

60

70

80

90

100%

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Why statistical offices should hire a comedian important channel to increase SME productivity and wages. In fact, data show that wage gaps with large firms, which typically pay employees 20% more than small businesses, are smaller for exporting SMEs.

Vincent F. Hendricks, Professor, Director of the Center for Information and Bubble Studies, University of Copenhagen, Denmark and Johannes Jütting, Manager of the Partnership in Statistics for Development in the 21st Century (PARIS21), Paris, France oe.cd/obs/2Rc

Public action has to take the wide diversity of SMEs into account to be effective. It should also address the broad range of factors that can affect their business environment and which cross over multiple policy domains, from regulation to infrastructure, competition and tax, not to mention national and subnational levels of policy governance.

Perhaps it is because the expert community has not come up with compelling and easy-to-understand narratives that strike a chord with people’s feelings and concerns. The danger is, while experts need to make value judgments on measurement criteria and frameworks, in a polarised society these can be misused by populists who dismiss experts as partisan without any

Many of these issues are addressed in the SME and Entrepreneurship Outlook.

SMEs can help us reach new heights, and with international co-operation and more evidence on good practices, policymakers can help SMEs and entrepreneurs play a fuller part in building more resilient, sustainable and inclusive societies.

Reference OECD (2019), OECD SME and Entrepreneurship Outlook 2019, OECD Publishing, Paris, https://doi.org/10.1787/34907e9c-en

oe.cd/obs/2Rb

Comedian John Oliver

Did you know that each year in the United States nearly 730 people die falling out of bed, while only nine are killed by jihadist terrorists? If you had to guess, which one do you think Americans are more worried about?

The late statistician Hans Rosling argued that we are victims of the “fear instinct”, which explains why things that frighten us are more likely to grab our attention.

Just think about how often politicians on all sides have worked on people’s fears to turn public opinion against migration, for example.

In an age where misinformation spreads on social media with the click of a mouse, stories about the danger of vaccinations,

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©Mike Coppola / Getty Images North America / AFP

Action is needed now, to enable SMEs to make the most of emerging opportunities but also to ensure they are better prepared in the event of a new economic slowdown. In fact, as trade tensions increase and market conditions for SMEs tighten, the room for them to benefit from digitalisation and globalisation may narrow.

the myth of climate change or other flat-earth conspiracies have challenged the relationship between perceived realities, objective truth and official statistics. Groups on social media become echo chambers in which members start believing an argument if it is simply repeated often enough. When surrounded by people with similar views, whether on social media or in person, those gut feelings become reinforced.

“real world” understanding. Such factors are proving to be a critical challenge for democracy and public institutions.

How can statisticians turn the tables?

Let’s start by recalling what they do.

The mandate of official statistical offices is to produce reliable information about a society in its entirety, based on the Fundamental Principles of Official Statistics. The information should be data driven, based on reliable methodologies, and pave the way for informed discussion, decision and action. In an ideal world, statisticians should remain dispassionate and objective, as their role is to engage in the science of data collection and analysis itself, not to make judgments about the data that they collect.

Listen up, pay attention– Statisticians need to realise how their facts can be interpreted differently by various groups. Actively engaging with users and listening to their arguments also helps statisticians become better at

ECONOMY

reviewing their own facts in light of new realities. Doing this can help remove the accusation that experts inhabit an ivory tower, and can win back the trust they need to function effectively.

They must therefore adopt a user-centric focus rather than churning out numbers that do not provide citizens with a clear understanding of where the data came from, what they are for or what the government will do with them. Using new channels and forms of data dissemination will be key. The UK Office for National Statistics’ recent efforts to make housing planning statistics more coherent and comparable by forging links between various groups is a good example of this.

The statistical community has a huge chance to team up more directly with citizen groups at the local level to address issues of concern to people such as public transport, sport facilities, education and other areas linked to public services. Empowering citizens to use data and statistics in a responsible way is key. This could also involve providing statistical literacy training to civil society and the media. Statistics Canada is providing civil society groups with a tool to improve the quality of their own citizen-generated data.

Statistics Netherlands has also reoriented itself towards bringing data to the consumer rather than producing data for the sake of it, and has even launched their own TV studio. More initiatives like this are needed, as well as others that create opportunities for statisticians to listen to the concerns and aspirations of citizens.

–and smile Responding to people’s emotions is another key part of the answer.

Political satire programmes on television, such as the Daily Show with Trevor Noah and Last Week Tonight with John Oliver, draw millions of viewers.

Politicians often appear on popular comedy TV programmes and talk shows

Empowering citizens to use data and statistics in a responsible way is key

Truth is no laughing matter, but perhaps we can use humour to get the truth out, for the good of science and society.

to get closer to their constituencies.

Popular Youtubers such as Cyprien in France or Charges in Brazil also use humour to comment on current affairs.

Like the TV shows, they put news and information into a format that is engaging and appeals to a wide audience.

It’s no wonder they have become a primary source of political news for millennials. Can statistical offices learn from this approach? Or even better: could they take part in it?

Creating funny and light-hearted narratives around statistics would get more people interested in how statistics

.

are produced and used, and help engage statisticians in public discussions. From busting myths to addressing bias on all sides, humour can also help stop misleading and confusing information from spreading further.

References and links Durand, M. (2016), ”Figures and feelings both count, as a matter of fact”, in OECD Yearbook 2017, OECD Publishing, Paris, https://www.oecd.org/internet/figuresand-feelings-both-count.htm Hendricks, V. (2017), ”How to stop the slide from infostorms to post-factual democracy”, in OECD Yearbook 2015, OECD Publishing, Paris, https://oe.cd/1VJutting, J. (2013), ”Measuring development goals: Towards a data revolution”, OECD Observer, OECD Publishing, Paris, https://oe.cd/obs/2CF Sutherland, P. (2015), ”We must harness the true strength of migration”, in OECD Yearbook 2015, OECD Publishing, Paris, https://oe.cd/2CF

oe.cd/obs/2Rc

Number of US citizens killed annually Breakdown by cause

Islamic jihadist immigrants1

2

Far right-wing terrorists

5

1

All Islamic jihadist terrorists (incl. US citizens)1 9 Armed toddlers2 21 Lightning3 31 Lawnmowers4 69 Being hit by a bus4 264 Falling out of bed4 737 Being shot by another American5

11,737

10-year average of terrorists attacks “Deadly Attacks Since 9/11”, New America, http:// securitydata.newamerica.net/extremists/ deadly-attacks.html www.snopes.com/toddlers-killed-americans-terrorists/ 3 10-year average of deaths by lightning, NOAA, www.nws.noaa.gov/om/hazstats/resources/weather_fatalities.pdf 4 10-year average, Underlying Cause of Death 2014, CDC, http://wonder.cdc.gov 5 10-year average 2005-2014, CDC, Injury Prevention and Control: Data and Statistics (WISQARSTM) 1

2

This does not mean becoming angry, for one of the surest ways to reinforce someone’s prejudices is to attack him or her. On the contrary, why not use humour?

Source: www.cdc.gov/injury/wisqars/fatal_injury_reports.html

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AI society: How people can make artificial intelligence work for all

“An instrument of the devil”. This is how the invention of the telephone was greeted in Sweden in the mid-19th century, according to Ericsson, a telecommunications firm. From phones to televisions and cars, such horror is quite a common public reaction to the advent of new technologies, even if it often doesn’t take too long before the same people wonder how they ever did without them.

Optimists can also get it wrong too, though. Some early supporters of the phone in Sweden emphasised less the benefits of communication than their belief that the pulse from phone signals would bring relief to their rheumatism.

Artificial intelligence inevitably finds itself subject to similar discussion. It is not wrong to be critical of early technology, but it is also important to remain open to new opportunities. This is the challenge for policymakers: how to take the fullest advantage of AI to deliver the widest possible benefits, while reducing the risks?

Artificial intelligence, or AI as it is popularly known, has evolved greatly since it was

first conceptualised in the Dartmouth Summer Research Project at Dartmouth College in the US state of New Hampshire in 1956. Indeed, since then AI has acquired the potential to reshape economies, by stimulating productivity, improving

AI is still in its infancy, and we do not know how powerful AI can become efficiency and lowering costs. Its applications are to be seen in a range of sectors, from transport and farming to finance, and healthcare, as well as in criminal justice and security. It can even help improve governance in both the public and private sectors, for instance, by helping people make better predictions and more informed decisions.

Yet, AI is still in its infancy, and although surveys suggest most business people see AI as an advantage, we do not know how powerful AI can become. In this light, it is inevitable that AI should fuel anxieties and ethical concerns, too.

There are questions to answer about the trustworthiness of AI, when it comes to privacy for instance, and about the

risks of reinforcing any existing biases on race or gender in the algorithms that underpin AI, or even infringing people’s rights. Concerns are also growing about AI systems exacerbating inequality, market concentration and the digital divide.

No single country or actor has all the answers to these challenges. As AI’s impacts permeate our societies, what we do know is that its undoubted transformational power must be put at the service of people and the planet.

We therefore need international cooperation and responses from all interests in society to guide the development and use of AI for the wider good.

The OECD has been leading a wideranging reflection on the issues, and formed an international expert group it in 2018 to help with scoping principles for artificial intelligence in society.

The new group won wide applause, including by world chess champion Garry Kasparov, who as he put it in a video address, was perhaps the first knowledge worker in history to have his job threatened by a machine when

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he was beaten in chess by an AI-driven supercomputer in 1997.

The expert group’s discussions inspired the OECD Principles on Artificial Intelligence—the first international standard on AI—which was adopted by all OECD members and by several partner countries on 22 May 2019. These principles focus on simple, yet essential values, such as transparency, accountability and human rights, for AI to gain acceptance and become a reliable, human-centred technology. Only then will AI be able to deliver on its promise of benefiting both people and the planet (see references).

An OECD report, Artificial Intelligence in Society, examines the evolving AI landscape and highlights key policy questions.

What makes AI different is that it enables technology to learn by doing: it uses large datasets and powerful computing to help it quickly choose the best route among alternative paths forward. This gives AI more autonomy than conventional technology. Deep Blue, the chess-playing computer that outwitted Kasparov, was able to predict and quickly respond as the board developed. Breakthroughs in machine learning since 2011 have improved machines ability to make predictions from data, while the maturity of modelling techniques such as “neural networks”, along with even greater computing power, have helped spur AI’s recent growth.

Business investors have perked up their interest too. Private equity investment in AI start-ups accelerated from 2016, after five years of steady increases, doubling to US$16 billion in 2017. AI start-ups attracted 12% of worldwide private equity investments in the first half of 2018, up from just 3% in 2011, with all major economies involved, albeit with some variation across companies and industries. The OECD report describes just how OECD and non-OECD countries alike are jockeying for position on the AI stakes, with strategies, plans and initiatives in large and small countries alike.

16

AI applications are permeating many sectors, with the prospect of noticeable benefits for productivity and solving complex challenges. One much publicised example concerns efforts to develop autonomous or semi-autonomous transport vehicles as a way of reducing traffic congestion and pollution, and improving road safety. In healthcare, AI

Designing AI systems that are transparent and accountable is critical systems could help diagnose and prevent disease outbreaks early on, and can help farmers better monitor crop and soil health, and tailor their treatment. In criminal justice, AI enables predictive policing and assessing reoffending risk, as well as combing facial-recognition databases to identify criminals.

One leading public concern is how AI will change the nature of work as it replaces or alters labour. Policies to promote constant education, training and skills development, and to empower people as they move from one job to another, are vital. Meanwhile, thanks to AI, new jobs are being created, including that of coaching robots, as well as jobs demanding soft skills for sectors such as health and education.

It is in crime and security where public policy become particularly sensitive. How reliable is AI and how accurate is the data AI is using? What room do people have to challenge it, particularly in light of the fact that, as the OECD report points out, some AI systems are so complex that explaining their decisions may be impossible?

In financial services where AI can help detect fraud, there are questions about it being used to assess credit-worthiness or to allocate health insurance, based on personal data that may be acquired without the knowledge or consent of private individuals. Likewise, the potential invasiveness of marketing using AI to mine data on personal consumer behaviour is another divisive subject of debate.

On such challenges, the authors of Artificial Intelligence in Society are clear: AI systems must function properly and in a secure and safe manner, so designing systems that are transparent about the use of AI and are accountable for their outcomes is critical.

The OECD’s goal is to help build a shared understanding of AI, and to encourage a broad dialogue on these important policy issues. National policies are needed, inspired by the OECD AI Principles, to promote trustworthy AI systems, including those that encourage investment in responsible AI research and development.

Rules and guidelines that enable access to data, alongside strong data and privacy protection, may be required.

In short, policies are needed to address public concerns, while promoting AI so that everyone, not just large firms and administrations, but small and mediumsized enterprises, local authorities and people at home as well, can benefit from it. Our societal intelligence will be a determining factor in shaping better AI policies for better lives. Rory J Clarke References AI at the OECD: www.oecd.org /going-digital/ai/ Berryhill, Jamie, and Kévin Kok Heang, Rob Clogher, Keegan McBride (2019) “Hello World: Artificial intelligence and its use in the public sector,” OECD Working Papers on Public Governance No 36 See https://dx.doi.org/10.1787/726fd39d-en Hathaway, Claire (2019), “Artificial bias” in OECD Observer No 317-318, Q1-Q2 2019, https://oe.cd/obs/2D7 OECD (2019), Artificial Intelligence in Society, OECD Publishing, Paris, https://doi.org/10.1787/eedfee77-en.

OECD Observer (2019), What are the OECD Principles on AI?”in No 317-318, Q1-Q2 2019, https://oe.cd/obs/2DX OECD (2018), “OECD creates expert group to foster trust in artificial intelligence”, news release, 13 Sep, see https://oe.cd/2Ss Or https://www.oecd.org/innovation/oecd-creates-expertgroup-to-foster-trust-in-artificial-intelligence.htm Prigent, Anne-Lise (2019), “Societal intelligence”, in OECD Observer No 317-318, Q1-Q2 2019, https://oe.cd/obs/2D8 For “The telephone is the instrument of the devil”, see Ericsson’s website: https://www.ericsson.com/en/about-us/ history/communication/how-the-telephone-changed-theworld/the-telephone-is-the-instrument-of-the-devilworld/ the-telephone-is-the-instrument-of-the-devil

GOING DIGITAL

AI and Europe’s medium-sized firms: How to overcome an Achilles heel oe.cd/obs/2R8

©Alamy/Unsplash/Fernanda Sapina

Benoît Bergeret, Founder, CEO, indust.ai; Founding Board Member, Hub France IA

Artificial intelligence could become very real in the world of business. But funding needs to be corrected first for mediumsized firms, where millions of jobs are at stake.

Modern technologies collectively known as artificial intelligence (AI) have demonstrated their ability to help companies decide faster and operate better. With the promise of further and more impactful applications, business leaders in all sectors are starting to embrace AI technologies. This includes medium sized firms, which face particular challenges.

McKinsey estimates that the potential impact of AI in Europe could exceed 20% of gross value added in 2030, if widely diffused and properly used.

Because of its enormous potential impact on the EU workforce and economy, AI has been embraced by public organisations and governments, generating a flurry of initiatives and large

public budget allocations to support its spread.

Funding of AI adoption in Europe mainly comes from three sources. Public funding is the first source, either top-down or at the local level. The second is self-funding of large enterprises’ internal projects, which can in some cases be supported by public funding. And the third is venture capital funding of AI start-ups, totalling upwards of US$7.4 billion world wide in the second quarter of 2019 alone.

Funders, both public and private, operate under the assumption that investing at the top of value chains—such as Horizon 2020’s €1.5 billion investment in R&D— will ultimately benefit all of the economy—the famous “trickle-down” effect. However, there are structural limits inherent to these funding mechanisms, creating a significant blind spot when it comes to medium-sized enterprises (MSEs). By MSEs, we mean companies employing between 250 and upwards of

5,000 staff and generating turnover between €50 and €6 billion. Current funding mechanisms exclude many MSEs, especially those whose primary activity is not centered on data, such as businesses that produce goods or services relying on the exploitation of a tangible asset. These MSEs are found in the manufacturing, transportation, and energy production sectors, among others.

From our estimates, MSEs in these sectors (collectively referred to here as “industrial MSEs”) together represent about 20 million jobs in Europe, and 50 to 60% of gross value added.

MSEs do not benefit fully from these incentive mechanisms for three reasons.

First, public support often comes in the form of financial incentives distributed as part of “top-down” programmes that operate via trickle-down mechanisms, all the way down to narrow segments of the industrial fabric. The groups targeted by these programmes often only feel their impact some time later. When this public

OECD Observer No 319-320 Q3-Q4 2019

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support is delivered at the local level, its reach and scope are inherently limited by the amounts distributed, and by the distribution methods.

The second reason is that investments made by large corporations in AI technology only serve companies that are part of their value chain: suppliers, partners, and clients. However, not all MSEs are part of these value chains.

A third reason is that venture capital investment is for the most part funnelled to products or platform start-ups in areas such as customer relationship management (CRM), or supply chain optimisation for instance. But mediumsized firms rarely adopt AI products that affect the core of their activity (for instance their manufacturing process), as doing so is often seen by their leadership as disruptive, and therefore both risky and costly.

Industrial MSEs are therefore overly exposed to the risk of a loss of competitiveness to foreign players, as industrial companies outside of Europe are moving fast in their AI transformation, acquiring flexibility, reducing costs, and expanding their global reach. For Europe’s industrial MSEs, job losses and value destruction for shareholders, on a large scale, is what is at stake.

To make matters worse, industrial MSEs in Europe encounter specific operational challenges when considering AI adoption.

Due to legacy and the short-term constraints that come from running a mid-size business, not all MSEs have readily available data. They often struggle to understand what data to produce from their productive assets, and what to do with them.

There will be an acute shortage of AI skills on the market for the foreseeable future, especially the deep multidisciplinary technological skills needed to tackle difficult industrial problems. It is an illusion to believe either that enough skilled AI experts will arrive on the market

18

soon, or that most MSEs will be able to attract, let alone retain, the relevant talent.

Culturally, MSEs are often led by rather cautious leaders, who may hesitate to become early adopters in using new technologies, and may prefer to follow proven successes in their sector, especially when their core business or production assets are concerned.

To make progress, the current Europewide momentum around AI adoption, albeit admirable, must become more comprehensive. European governments should address this Achilles heel in the continent’s future economic leadership.

Solutions can be developed to fix this problem, and it is not necessary that these should all be “top-down”. At a minimum, Europe as a community of states needs to do three urgent things simultaneously.

First, it needs to increase AI awareness among the leaders of MSEs by engaging in aggressive AI education initiatives, and diffusing information on AI adoption success stories. Second, Europe needs to increase intra-EU market integration and co-operation around AI adoption by facilitating information exchange and access to AI solutions.

of helping companies with their digital transformation. And of course, AI is only a part of digital transformation. There is a scale issue that is linked to the granularity and diversity of SMEs. We need to enable the emergence of relays that are close to SMEs and ensure that their reach is wide enough.

The above actions are essential. They are required for the core fabric of the European economy-industrial MSEs— to be in a position to increase its performance and competitive standing in the global economy. Twenty million jobs are at stake.

References AI4EU: https://www.ai4eu.eu/ Asgard and R. Berger (2018), “Artificial Intelligence– A Strategy for European Start-ups”, https://asgard.vc/ wp-content/uploads/2018/05/Artificial-IntelligenceStrategy-for-Europe-2018.pdf CB Insights (2019), “AI in Numbers: Global Funding, Exits, And R&D Trends in Artificial Intelligence”, https://www. cbinsights.com/research/report/ai-in-numbers-q2-2019/ Council of the European Union (2019), “Draft Council Conclusions on the Coordinated Plan on the Development and Use of Artificial Intelligence Made in Europe”, https://data.consilium.europa.eu/doc/document/ ST-6177-2019-INIT/en/pdf.

Deloitte (2019), “Future in the balance? How countries are pursuing an AI advantage”, https://www2.deloitte.com/ content/dam/insights/us/articles/5189_Global-AI-survey/ DI_AI-Global-Survey-Synopsis.pdf

Last but not least, Europe should support the growth of pan-European “applied AI” labs, with a major role for private funding, that simplify and accelerate access to essential AI skills. To help industrial MSEs adopt AI solutions quickly, efficiently, and safely, such applied AI labs should combine deep, multi-disciplinary AI R&D skills with a pragmatic, proven culture of “getting things done”. These labs should also offer business transaction models that are compatible with the specific characteristics of MSEs and the constraints they face.

European Council on Foreign Relations (2019), Machine politics: Europe and the AI revolution”, Policy brief, https://www.ecfr.eu/publications/summary/machine_ politics_europe_and_the_ai_revolution.

France is an interesting example in that respect. There are technology research institutes (IRT—Instituts de recherche en technologie) but only one of them, SystemX in Saclay, is in charge

University of Cambridge (2019), “A survey of the European Union’s artificial intelligence ecosystem”, https://83d6fa692c07-4589-82a1-386547d3715c.filesusr.com/ugd/ff3afe_ 1513c6bf2d81400eac182642105d4d6f.pdf

McKinsey Global Institute (2019), “Notes from the AI Frontier: Tackling Europe’s gap in digital and AI”, https:// www.mckinsey.com/~/media/mckinsey/featured%20 insights/artificial%20intelligence/tackling%20europes%20 gap%20in%20digital%20and%20ai/mgi-tackling-europesgap-in-digital-and-ai-feb-2019-vf.ashx Région île de France (2019), « Intelligence artificielle : lancement du Pack IA et du Challenge ‘IA for Industry’ », https://www.iledefrance.fr/intelligence-artificiellelancement-du-pack-ia-et-du-challenge-ia-industry Dutton, T. (2018), “An Overview of National AI Strategies”, https://medium.com/politics-ai/an-overview-of-national-aistrategies-2a70ec6edfd.

oe.cd/obs/2R8

GOING DIGITAL

Blockchain is a major technology of the 21st century Bruno Le Maire, Minister of the Economy and Finance, France* oe.cd/obs/2Tt

that the move from a centralised financial system to a decentralised one will happen much faster than people expect.

©OECD/Victor Tonelli

This is also true of the services sector. Because blockchain is not limited to the financial sector, as I often hear people say.

It allows users to draw up smart contracts that can revolutionise the insurance sector. These contracts allow some tasks to be automated on behalf of consumers. For example, payments to policyholders could be made automatically in the event of a climate disaster. I think that the automatic activation of insurance contracts in the case of climate disaster, instead of a series of decisions authorising payments, represents a real step forward for policyholders.

Like all new technologies, blockchain is controversial. Some people say that it will be the most significant breakthrough technology of the 21st century. Others are telling us that it is a technological illusion. All I know is that most people talking about blockchain understand nothing about blockchain. […]

Blockchain is a major technology for the future of France, Europe and the rest of the world. This is why I have, alongside the president of France, defined a clear blockchain strategy— something that was lacking in France just three or four years ago. […]

Like any politician, I can be mistaken, but I am personally convinced that blockchain is the future, and will be a major technology of the 21st century. We need to take it seriously, to organise it and to make sure that the OECD’s member countries lead the way in its use.

My first observation is that it could potentially transform a certain number of activities, which must be proof of its effectiveness. One such activity is financial services. Financial markets are based on a very complex architecture—marketplaces, clearing houses, settlement systems—and have just one purpose: ensuring the security of financial transactions. And blockchain technology can one day replace these highly complex infrastructures. It is a very promising technology for these financial services because it would allow an extraordinarily cumbersome and complex system of transaction certification to be replaced by a blockchain protocol. The protocol would be a complete, decentralised solution allowing people to carry out transactions, record the transactions and store the value connected to the transactions. It is no coincidence that a large number of fintech firms are developing this technology.

You are aware of my determination to make French fintech firms the best in the world. When I look at the work of LiquidShare, for example, a French start-up, I am convinced

Blockchain can also transform the manufacturing industry.

I would like to see this second [OECD Global Blockchain Policy] Forum share the message that blockchain technology is not limited to services: it is already operational in industry, in

The move from a centralised financial system to a decentralised one will happen much faster than people expect manufacturing and in industrial production. I believe it will transform all sectors and all processes of industrial production.

Let us take the example of the food industry. The key issue here is product traceability. And blockchain provides an effective, incontestable solution for the total traceability of products throughout production and supply, all the way to the consumer, guaranteeing total confidence in the safety of the products. This is an absolutely huge step.

With all of this, we need a strategy. Now that the use of blockchain is spreading to all sectors of economic activity, and, financial services to insurance through, and I insist on this, manufacturing, we must follow a strategy that allows us to control and regulate the technology.

One of the major democratic challenges of the 21st century will be to calibrate the control and regulation of technology according to our values. Because it is the democracies that determine the value of the technology and not the technology that determines our values. This point is absolutely decisive if we want the advances in artificial intelligence, driverless cars and elsewhere to be accepted by the public. […] *This is a 650-word extract from speech by Bruno Le Maire, French Minister of the Economy and Finance, as delivered at the OECD Global Blockchain Policy Forum, OECD, Thursday 12 September 2019. For the full 3,500 word speech (English version), visit: https://oe.cd/obs/2Tt Watch the speech in French at https://oecd.streamakaci.com/blockchain2019/ Visit www.oecd.org/finance/oecd-blockchain-policy-forum.htm

OECD Observer No 319-320 Q3-Q4 2019

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EDUCATION

Building a collaborative culture for teachers Andreas Schleicher, Director, OECD Directorate for Education and Skills oe.cd/obs/2OL

achieve the best outcomes—are still quite rare. The views of teachers expressed in TALIS tell us a lot about the gap between pedagogical vision and practice and between professional aspirations and a still highly industrial organisation of work.

To meet a growing demand for high-quality teachers, countries will need to work harder, to make teaching more attractive

It is time to address transparency

©Alamy

not just financially, but intellectually too, by treating teaching professionals as advanced knowledge workers in a world in which both autonomy and a collaborative culture are paramount.

Most people remember at least one teacher who took a real interest in their life and aspirations, helped them understand who they were, taught them to love learning. And it is precisely these aspects that inspire the vast majority of people to become teachers: according to the OECD Teaching and Learning International Survey (TALIS), nine out of ten teachers in participating OECD countries and economies cite the opportunity to influence children’s development and contribute to society as one of their main motivations to join the profession.

What does this profession look like today, at a time when the kind of things that are easy to teach and test have also become easy to digitise and automate? For example, machines can do basic calculations, memorise facts, or sort and organise far more quickly than humans can. Today, society no longer rewards people just for what they know—Google knows everything—but for what they can do with what they know.

Today’s teachers are being asked to help students think for themselves and work with others. Teachers should have a deep and broad understanding of what they teach and for whom. They must be experts not only in their subject matter and how to teach it, but also in how to create the kinds of learning environments that lead to good outcomes. They must be able to respond to many different learners, in an environment that is constantly changing.

They must also help students develop a sense of enquiry and research skills required to help with lifelong learning.

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This means providing teachers with better opportunities to prepare for tomorrow’s world. Our data show that little more than half of teachers participating received initial training in the use of technology for teaching, and less than half felt well prepared when they joined the profession. Contrast this with the view of two-thirds of teachers, who report that the most impactful professional development they participated in focused on innovation in their teaching.

Designers of successful education systems in the 21st century will do whatever it takes to develop teachers’ ownership over professional practice. Some say we cannot give teachers and education leaders greater autonomy because they lack the capacity and expertise to deliver on it. There may be some truth in that. Yet simply perpetuating a prescriptive model of teaching will not produce creative teachers. By contrast, when teachers feel a sense of ownership over their practices, their classrooms, and when students feel a sense of ownership over their learning, that is when productive teaching takes place.

It is time to address transparency, professional autonomy and the collaborative culture of the teaching profession all at the same time. TALIS reminds us that many teachers and schools are ready for this, and acting now will help garner trust. Imagine, for example, a giant open-source community for teachers, where they can share their ideas, a space that unlocks teachers’ creativity simply by tapping into the desire of people to contribute, collaborate and be recognised for their contributions. This is the next TALIS satellite project, through which the OECD will establish a global video library of teaching, Global Teaching InSights.

And that’s not all we ask of our teachers. We also expect them to be compassionate and thoughtful; to encourage students’ engagement and responsibility; to promote collaboration and social cohesion; to provide continual assessment and feedback to all kinds of students; and to ensure that everyone feels valued and included. A tall order, to say the least.

Successful schools will always be places where great people want to work and where their ideas can be best realised, where they are trusted and where they can put their trust.

What can school systems do to help teachers achieve their mission? For a start, school systems should take a greater interest in the professional views of teachers as experts on teaching and learning. Surveys such as TALIS­—which establish a teacher perspective on how teaching and learning can be organised to

Schleicher, A., “What teachers tell us about their work”, OECD Education and Skills Today, blog https://oecdedutoday.com/talis-teaching-learning-international-survey-oecdteachers/

References and further reading OECD (2019), TALIS 2018 Results (Volume I), Teachers and School Leaders as Lifelong Learners, TALIS, OECD Publishing, Paris, https://doi.org/10.1787/1d0bc92a-en.

Andreas Schleicher on OECD Podcasts: “First-class humans, not second-class robots— learning and the future of work”, https://soundcloud.com/oecd/first-class-humans-notsecond-class-robots-andreas-schleicher-on-learning-and-the-future-of-work

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EDUCATION

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Teachers’ pay: Mind the mid-career gap Teachers’ salaries early and mid-career

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Primary teachers’ salaries, starting/15 years’ experience, US$, 2018 or latest available

It is often said that the most important ingredient in a successful classroom is the teacher. So are we paying them enough? Take primary school. Education of children in their early years is critically important, and attracting teachers to primary schools is a key challenge. By 2018 in the OECD area primary teachers’ pay at the start of a career ranged from just less than $15,000 in Latvia to nearly $75,000 in Luxembourg. In some 20 of the 35 OECD countries in the chart, starting salaries fall in the $20-40,000 range. Teachers in most of these countries can look to quite sharp increases in salaries by mid-career. For instance, they jump from around $40,000 to over $60,000 in Ireland and to over $65,000 in Canada.

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In fact, 35 an examination of teachers’ pay in France, including the likes of bonuses 30 and overtime, shows that in 2017 teachers 25 aged between 25 and 64 and working in 20 secondary schools earned a little more 15 than the OECD average, thanks to bonuses, 10 whereas those working in primary schools 5 earned less than this average.

However, in France, Sweden and Turkey, primary teachers who have 15 years of teaching behind them earn just a few thousand more than starting salaries. As OECD education expert Eric Charbonnier has put it in the case of France, it is these mid-career teachers, who suffer the widest gap compared with other OECD countries.

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widest gap. At the end of the teaching career, the gap narrows to 2%.

After fifteen years of teaching, a French primary-school teacher earns roughly half the statutory salary of a teacher in Germany, 12% less than in Finland and 30% less than in England (UK).

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DEVELOPMENT & GOVERNANCE

Beyond humanitarian aid: Connecting the dots with development oe.cd/obs/2GJ

©AFP/Mohammed Al Shami Anadolu

Cyprien Fabre, OECD Development Co-operation Directorate

Drought, floods, earthquakes, conflict, climate change: these are just some of the areas which humanitarian assistance is traditionally called on to address.

Policymakers tend to consider shortterm humanitarian assistance and longer-term development assistance quite separately, yet they are two sides of the same coin. As we mark the annual World Humanitarian Day on 19 August, the OECD Lives in Crisis project provides some food for thought.

Today’s humanitarian crises and conflicts are more complex than in the past. They last longer, generate massive population displacement and do not develop in smooth, linear ways. Shocks such as climate change can have an impact on many different areas simultaneously, from food security and health to political and social stability. As a result, the need

for emergency assistance is increasingly overlapping with long-term development needs: there is no longer a specific point in time when people’s needs cease to be “humanitarian” and instead become linked to “development”.

Humanitarian needs are tied to development needs. In fact, they are often a direct reflection of the most serious development challenges.

Humanitarian aid may not necessarily be the best instrument to meet people’s needs in crisis contexts. Despite this, the current international system relies almost exclusively on the provision of short-term, emergency humanitarian aid whenever a crisis occurs.

The scale, complexity and longevity of most crises are straining today’s mechanisms for designing and funding

humanitarian interventions. Indeed, the 2016 World Humanitarian Summit called for a new, holistic paradigm for conceiving, programming and delivering humanitarian assistance. Three years later, there is still much to do to fully implement the reforms agreed at the summit, as the OECD “Lives in crises” project demonstrates.

Together with its partner, Ground Truth Solutions, the OECD interviewed over 12,000 people either affected by crises or working as humanitarian field workers since 2016. Respondents were interviewed about their perceptions in seven different country contexts, all of which present different crises patterns, namely in Haiti, Lebanon, Iraq, Somalia, Afghanistan, Uganda and Bangladesh.

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The project gathered a number of striking

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findings. First, aid workers and aid recipients differed sharply on their perceptions of whether or not aid was fairly distributed. Humanitarian workers were confident that aid was going to those who need it most. In stark contrast,

Humanitarian aid works as a temporary painkiller, but cannot treat the underlying cause aid recipients responded that it was not.

They argued that people lacking political or social power, including those with illnesses, the elderly, and remote and undocumented individuals, do not always receive the aid they need.

The interviews also highlighted that humanitarian assistance represents only a part of what individuals require.

People affected by crises cannot live exclusively on humanitarian assistance; it is insufficient to cover their basic needs.

After the initial emergency phase, they generally need to find other sources of income, a livelihood, or otherwise resort to other measures, such as leaving school or accruing debt.

If humanitarian assistance is not sufficient to meet people’s core needs, it is even less effective in helping people achieve economic self-sufficiency. People in crisis contexts surveyed by the OECD and Ground Truth Solutions consistently mentioned their lack of economic and livelihood opportunities as a primary grievance. In the protracted crises that make up most humanitarian contexts, affected people want financial autonomy, not prolonged assistance. People in crisis contexts want to work, for their dignity and well-being. Humanitarian assistance is not designed to put an end to need, but to sustain people through times of need.

In addition, humanitarian aid is often unpredictable in nature. Longer-term approaches should be mobilised in order to enable an environment in which people affected by crises are able to earn a living.

Meeting people’s needs requires listening

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to them and understanding their own views on what their needs are and whether they are being met, and it also demands that we consider carefully how we define a crisis in the first place.

For instance, although both political crises and natural disasters can create humanitarian needs, labelling them as “humanitarian” does not incite decisionmakers to engage with anything other than humanitarian assistance.

public money in risky contexts all make it hard to marshal resources for anything other than short-term humanitarian budgets delivered through big, trusted humanitarian partners with both expertise and absorption capacity.

Overcoming these stubborn divides is a challenge. Clearly, we must enable all partners to define, in each crisis context and at different points in time, the tools that are best for the problem at hand and how best to wield them together.

Yet policymakers require a range of instruments that include, but are not limited to, humanitarian assistance.

They also need to mobilise development and peace assistance, and use levers such as political dialogue, multilateralism, development co-operation, peacebuilding or stabilisation measures, and engage the private sector too. And players operating in these areas must work together in order to be most effective.

This “nexus”, where people working in humanitarian aid, development and peace areas collaborate, is described in a recent recommendation from the OECD Development Assistance Committee.

Activating this nexus requires reaching beyond humanitarian aid. How donors operate, the administrative processes in countries and any aversion to engaging

Humanitarian assistance works as a temporary painkiller, but cannot treat the underlying cause. To work properly, humanitarian policy responses should by default be part of a broader, collaborative plan, using the humanitariandevelopment-peace nexus.

References OECD (2019), DAC Recommendation on the Humanitarian-Development¬Peace Nexus, OECD Legal Instruments, OECD, Paris, https://legalinstruments.oecd. org/en/instruments/OECD-LEGAL-5019 OECD (2019), Lives in Crises: What Do People Tell Us About the Humanitarian Aid They Receive?, OECD Publishing, Paris, https://doi.org/10.1787/9d39623d-en For more on World Humanitarian Day, see www.unocha.org/world-humanitarian-day-2019

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DEVELOPMENT & GOVERNANCE

Indigenous communities and regional development Dawn Madahbee Leach, General Manager, Waubetek Business Development Corporation, and Vice-Chair of the National Indigenous Economic Development Board of Canada, Lars-Anders Baer, Chairperson of the Working Group for Indigenous Peoples to the Barents Euro-Arctic Co-operation, and Peter Yu, Chief Executive Officer of Nyamba Buru Yawuru Ltd and Chair of the Indigenous Reference Group to the Northern Ministerial Council.

ŠBruno Kelly/Fotostation

oe.cd/obs/2Rd

We are pleased to have provided leadership and guidance on this report— the first-ever global study of its kind on Indigenous economies and regional development. This work has directly involved Indigenous communities and leaders throughout. It is also timely.

As Indigenous peoples worldwide achieve growing legal recognition of their rights as well as title to land and sea, it is imperative that we overcome the implementation gap and translate these rights into better outcomes.

Reconciliation involves addressing Indigenous land titles along with the meaningful engagement of the original people in planning the protection and sustainable use of lands, water, natural resources and wildlife. It also demands

the inclusion of Indigenous peoples and perspectives in governance and policy design at all levels.

to come. That is why it is so integral to link Indigenous peoples to regional decision making and development.

We are stewards of the lands and waters—a responsibility given to us by the Creator. All life relies on the gifts that Mother Earth has provided by plant life, waters, animal beings, air and the grandfather stones. We must balance our use and need of these gifts in a sustainable and environmentally responsible way. Indigenous peoples have survived on the lands and hold an innate knowledge and connection to the lands that we have occupied for millennia.

This is a worldview that is critical for all peoples to understand and embrace in order to sustain the earth for generations

Historic injustices have prevented Indigenous peoples from exercising their rights to development in accordance with their own needs and interests. Indigenous peoples have been colonised, dehumanised, subjugated and dispossessed of their lands and resources.

Where treaties were entered into with Indigenous governments to share the lands and resources, they have too often been breached. Fortunately in some places, reconciliation is starting to take root. The United Nations Declaration on the Rights of Indigenous Peoples and the successive International Labour

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Organization’s conventions (no 107/1957 and no 169/1989) are being adopted and incorporated in the laws of many countries throughout the world who recognise the richness that Indigenous

We must balance our use of lands and waters in a sustainable way peoples can bring to the social and economic fabric of a country. Despite the many socio-economic challenges we face, Indigenous peoples are building capacity, creating businesses, undertaking economic development, contributing to regional economies and sharing the beautiful values of our culture.

The capacity for Indigenous peoples to create secure and sustainable wealth is fundamental to the universal Indigenous quest for self-determination. It is therefore imperative for Indigenous peoples to decide how that should proceed on the principles of free, prior and informed consent. We want to navigate our own way in a modern economy where we ensure the correct balance of our customary and cultural obligations to self, community and country while at the same time activating our natural tangible and intangible assets to grow our strength and independence. In the end, we want to resume responsibility and “own our risk”.

This report demonstrates the value of sharing lessons between Indigenous peoples across countries. It shares some of our leading practices such as the fisheries initiatives of Indigenous peoples in Alaska, the mining project of the Gumaj Corporation in Northern Australia, the parliament structure of the Sami in Sweden or the models of Indigenous financial institutions in Canada. We have Indigenous communities worldwide that have built their own economies through community-owned businesses, managing their own lands, training their own people and strengthening their own governance practices while incorporating their unique cultural traditions. We look

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forward to the future as we build on each other’s successes, share our stories and cheer on our accomplishments.

This report demonstrates that Indigenous peoples can be full participants and equal beneficiaries in economic development. We are pleased at how this report underlines the importance of re-establishing and strengthening governance structures that empower Indigenous communities. From regional

Dawn Madahbee Leach General Manager, Waubetek Business Development Corporation, and Vice-Chair of the National Indigenous Economic Development Board of Canada

policies and programming to better statistics, it provides a roadmap to fulfil the needs and aspirations of Indigenous peoples. It is also a roadmap for OECD member and non-member countries to meet the rights and aspirations of Indigenous peoples and communities so that they can realise their vast potential.

Miigwetch, Giitu, and Gala Mabu to the OECD for embarking on this path with us!

Lars-Anders Baer Chairperson of the Working Group for Indigenous Peoples to the Barents Euro-Arctic Co-operation

Peter Yu Chief Executive Officer of Nyamba Buru Yawuru Ltd and Chair of the Indigenous Reference Group to the Northern Ministerial Council.

All signed articles in the OECD Observer express the opinions of the authors and do not necessarily represent the official views of the OECD or its member countries.

Reference OECD (2019), Linking Indigenous Communities with Regional Development, OECD Rural Policy Reviews, OECD Publishing, Paris, https://doi.org/10.1787/3203c082-en

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DEVELOPMENT & GOVERNANCE

A guide for tackling fraud and corruption in EU investment funds Lisa Kilduff, OECD Directorate for Public Governance

https://bit.ly/372gqOU

just on business, as in Tomas’s case. Citizens lose out on new schools or improved health care services, and roads and buildings are left unfinished—powerful symbols of graft. Trust is being eroded, too: a recent poll shows that across the EU, only 34% of people have confidence in their national governments and parliaments. In some cases, citizens are even taking to the streets to protest fraud and corruption in EU funds.

©Alamy

So, what can governments do to tackle this issue? A recent OECD guide, Fraud and Corruption in European Structural and Investment Funds: A Spotlight on Common Schemes and Preventive Actions, provides evidence-based insights into the risks, and explains what responsible public officials can do to mitigate them.

Fraud and corruption are undermining the impact of the European Structural and Investment Funds, with recent high-profile cases resulting in mass protests and political upheaval. So what can EU governments do to tackle the problem?

Tomas is a farmer who receives subsidies from the European Union. He has worked hard to cultivate an impressive 7,400 acres of land in a small village in an EU member state. It’s more than his livelihood—taking care of the farm and its livestock is a source of pride for Tomas, as it has been for generations. But for the last four years, Tomas has been embroiled in legal battles—and at times experienced threats and violence—over the rights to his land.

Tomas’s troubles started in 2015, when an agricultural company began to cultivate arable land he owned. When he reported it to law enforcement authorities, the company presented what Tomas claims to be a falsified lease agreement and other forged documents to the national agency responsible for allocating EU grants to farmers. After being told that he must take his claim to court, Tomas was intimidated and physically attacked when he confronted the perpetrators. Nor did he get support from local political leaders; it turned out that they had allegedly helped the agricultural company carry out its scheme in exchange for kickbacks and bribes. Today, Tomas is still seeking justice for what happened to him.

This is just one example of a fraudulent scheme that occurs in European Structural and Investment Funds (ESI). These funds aim to enhance the quality of life of EU citizens through a range of investments, including research and development, infrastructure, employment and agriculture. But how can we be sure that the money is reaching the intended recipients? Tomas’s case is not unique. Estimates from known cases of fraud and corruption suggest that over €390 million are misappropriated from the ESI funds each year. This is probably just the tip of the iceberg, as there is a lack of comprehensive data and a possibility that many cases may be going undetected.

Yet these losses have tangible and lasting consequences, not

Take this example. In one EU member state, three public officials leaked sensitive information to a private company to help it win a contract for an EU-funded project. Later, these public officials modified project data to conceal their wrongdoing. Together with business representatives, they benefited from over €2 million in kickbacks. To prevent this fraudulent scheme from occurring in the first place, the authority in charge of selecting contractors should have used a secondary mechanism to review samples of winning bids, as well as rotating the staff who evaluate applications to reduce any risk of bias. As the project developed, the relevant authorities should have compared project outputs against costs to make sure the funds were being used properly.

In another case, a beneficiary of EU funds was supposed to implement a motorway construction project. Instead, they colluded with contractors and organised crime groups to pocket the funds. To hide the fraudulent scheme, the beneficiary mimicked repair works on the motorway, for instance, by closing sections of the road without actually undertaking the construction or repairs. This could have been prevented by more rigorous background checks to identify any conflicts of interest between project partners. Simple regular on-site visits would have revealed that the works weren’t being carried out.

There is much at stake when it comes to tackling fraud and corruption in ESI funds. In the past, governments have focused on compliance but now must do more to prevent fraud and corruption. By adopting a proactive risk management approach from the very start, they can confront these issues head-on and change them for good.

Fostering integrity-driven policies across the EU can reduce the risk of fraud and allow societies to benefit fully from their rightful investment funds. And that means better lives for millions of people like Tomas, too.

References OECD (2019), Tackling Fraud and Corruption Risks in the Slovak Republic: A Strategy with Key Actions for the European Structural and Investment Funds, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/6b8da11a-en.

OECD (2019), “Fraud and Corruption in European Structural and Investment Funds: A Spotlight on Common Schemes and Preventive Actions”, available at: https://www.oecd.org/gov/ethics/prevention-fraud-corruption-european-funds.pdf.

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HEALTH

Microbial resistance: The battle continues oe.cd/obs/2R7

©AFP/Waltraud Grubitzsch/Picture Alliance

Anne-Lise Prigent, OECD Observer

More generally, we need to take greater care of our ecosystems.

Most of the genes responsible for resistance have been around for a long time, far longer than antibiotics, says Julie Louise Gerberding, vice-president at Merck. Pouring antibiotics into soil, livestock or water will just amplify this resistance.

We can reduce infections with preventive measures. “Everybody’s health depends on immunisation,” insists Zsuzsanna Jakab, WHO Regional Director for Europe. There is a huge margin for increasing vaccination levels in livestock, and this could be a weapon in the fight against resistance to antimicrobials.

Healthcare budgets and facilities face an uphill battle against anti-microbial resistance. Can policymakers find a way through?

A discussion at the OECD Forum 2019 spelt out some major risks if they don’t.

Tuberculosis is back. We thought that with antibiotics we had more or less vanquished this titan killer by the middle of the 20th century. And yet, since the 1990s, it has re-emerged more virulently than ever.

Worldwide, tuberculosis infects 10 million people every year, and kills over three million. It is thousands of years old, and has now adapted: between 2011 and 2015, two million people contracted a strain of tuberculosis that is resistant to antibiotics.

Not only tuberculosis, but infected cuts, small infections that turn into epidemics—these problems that we thought we had consigned to history are now returning. Our modern medicine, all the way up to transplants, ultimately relies on a surprisingly small number of drugs, including antibiotics to prevent infections.

The trouble is that their effectiveness is weakening.

If we don’t take action, so-called superbug infections that are resistant to antibiotics could kill upwards of 2 million people over the next thirty years in Europe, North America and Australia alone. In OECD countries, 17% of infections are already resistant, compared to no less than 40-60% in Brazil, Indonesia and Russia, where resistance rates could increase four to seven times as fast.

Of course, the more we use antibiotics, the more we encourage bacteria to mutate and develop resistance, as per the theory of evolution. But unfortunately, too many doctors continue to prescribe these drugs systematically, and in some countries they are even available over the counter. There is no need for people to turn to antibiotics at the first sneeze, participants at this OECD Forum session argued, as these should be prescribed more judiciously.

Nor is it just about medicine and hospitals, since farms and our food chain also face issues. The agricultural sector accounts for between two thirds and three quarters of antibiotic consumption, Timothy Jinks, from the Wellcome Trust’s drug-resistant infections programme, pointed out. In many cases, if one animal falls ill, the entire herd is treated with antibiotics.

Simple preventive measures naturally remain essential. The biggest strides in healthcare have been made through hygiene: ensuring cleanliness, washing hands, etc. This holds for hospitals, as well as for schools and homes. For two dollars per person per year, three-quarters of deaths due to these infections could be prevented, OECD data show.

A failing market?

In the last 25 years, just two new second-line antibiotics have been invented for the treatment of tuberculosis, according to Serhiy Kiral, a member of the Ukrainian parliament. Most of the antibiotics used to treat the disease have been around for over 50 years, because the market is not profitable enough. For Julie Louise Gerberding, one way to solve the failing market might be a public-private coalition between governments, the private sector, philanthropists such as the Gates Foundation, and so on.

The Coalition for Epidemic Preparedness Innovations was cited as an example, which is working on vaccines to prevent outbreaks of diseases such as Ebola.

Another cause for concern is the chain of production. For some medicines, production is concentrated in a handful of plants.

Recently, a fire in a Chinese plant led to shortages of medicines in Europe and the US. In OECD countries, life expectancy has risen, but without antibiotics, it will fall back again. Knowledge is improving and reports are being published, but public authorities must take action now. Civil society must also act in support, as they have done before with issues like malaria and AIDS. Why not antimicrobial resistance?

What is clear from this OECD Forum debate is the need for investment. The private sector should help to make this happen, and public policy should make it attractive to invest in. Given the global nature of both disease and science, international co-operation will be essential if policymakers are to find a way to beat back anti-microbial resistance once and for all.

References and further reading This article reflects a session of the 2019 OECD Forum, Drug-Resistant Infections & Vaccines, 21 May, see www.oecd.org/forum/programme/#!142040.

OECD (2018), Stemming the Superbug Tide: Just A Few Dollars More, OECD Health Policy Studies, OECD Publishing, Paris, https://doi.org/10.1787/9789264307599-en.

OECD (2018), Stopping antimicrobial resistance would cost just USD 2 per person a year, https://www.oecd.org/health/stopping-antimicrobial-resistance-would-cost-just-usd-2-perperson-a-year.htm OECD (2018), “Stopping antimicrobial resistance would cost just $2 per person a year”, media release, 7 Nov, see www.oecd.org

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“Be it by political conviction or electoral convenience, leaders need to think big and act bigger”, said OECD SecretaryGeneral Angel Gurría, as he urged governments to take climate action seriously, in a major speech in Geneva in July. Mr Gurría asked leaders to set aside “short termism” and to honour climate commitments by taking steps “to put a meaningful price on carbon, to phase out state support for fossil fuels, and to stop burning coal”.

Read the full speech, “Climate: Reclaiming our Future” here: http://www.oecd. org/environment/cc/climate-lecturereclaiming-our-common-future.pdf

AI principles also affirmed at G20 summit Speaking to G20 leaders during the summit in Osaka, Japan, in June, OECD Secretary-General Angel Gurría said the profound impact of the digital revolution on our societies required common policies and welcomed their endorsement of the G20 Artificial Intelligence (AI) Principles. These are based largely on consultations led by the OECD, whose AI Principles were adopted at the annual OECD Ministerial Council Meeting in May, while drawing up its own principles. “You are affirming that the AI we want is centred on people, respects ethical and democratic values, is transparent, safe and accountable,” Mr Gurría said.

Shinzo Abe, Prime Minister of Japan

For more on the OECD AI Principles, see https://www.oecd.org/going-digital/ai/principles/

©OECD

Mali and the OECD

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Prime Minister of Mali Boubou Cissé with OECD Secretary-General Angel Gurría on 11 September. The prime minister and the secretary-general explored opportunities for Mali to benefit from the organisation’s expertise, in particular the OECD Development Centre, and to deepen co-operation (see www.oecd.org/ development). See also, “Mali: Why everyone should care about its future”,

by Erik Solheim, in OECD Observer, Oct 2015, https://oe.cd/obs/2Uh

©Rights reserved

Profound change needed on climate

OECD.ORG

Recent speeches by Angel Gurría G7 Leaders Summit: Climate, Oceans, Biodiversity Remarks delivered in Biarritz, France, 26 August 2019

Ambassadors Australia

Mr Alexander Robert William Robson

Austria

Mr Thomas Schnöll

Belgium

Mr Jean-Joël Schittecatte

Canada

Ms Madeleine Chenette

Chile

Mr Felipe Morande

Czech Republic

Mr Petr Gandalovič

Denmark

Mr Carsten Staur

Estonia

Mr Clyde Kull

Finland

Mr Tuomas Tapio

France

Mr Jean-Pierre Jouyet

Germany

Mr Martin Hanz

Greece

Ms Rania Antonopoulou

Remarks delivered in London, UK, 9 September 2019

Hungary

Mr László Turóczy

2019 G20 Leaders’ Summit on Digital: AI, data governance, digital trade, taxation

Iceland

Mr Kristján Andri Stefánsson

OECD Global Blockchain Policy Forum

Ireland

Mr Dermot Nolan

Remarks delivered in Osaka, Japan, 28 June 2019

Remarks delivered in Paris, France, 12 September 2019

Israel

Mr. Eli Emanuel Lev

Italy

Mr Alessandro Busacca Mr Hiroshi Oe

G7 Leaders Summit: Digital Economy and Artificial Intelligence ©OECD/Julien Daniel

Remarks delivered in Biarritz, France, 26 August 2019

For a complete list of the speeches and statements, including those in French and other languages, go to: http://www.oecd.org/about/ secretary-general/

Keynote Address to the International Fiscal Association Congress: “Towards the Third Big Bang” Remarks delivered in London, UK, 8 September 2019 Keynote Address to the London Business School: “AI for Sustainable Development”

Strengthening the gender dimension of aid for trade

Launch of the International Migration Outlook 2019

Japan Latvia

Ms Ivita Burmistre

Remarks delivered in Geneva, Switzerland, 3 July 2019

Remarks delivered in Paris, France, 17 September 2019

Lithuania

Ms Lina Viltrakiene

Luxembourg

Ms Martine Schommer

The Fourth Biennial Climate Lecture: Reclaiming Our Common Future

New Approaches to Environmental, Social and Economic Challenges

Mexico

Ms Sybel Galván

Netherlands

Mr Guido Biessen

Remarks delivered in Geneva, Switzerland, 3 July 2019

Remarks delivered in Paris, France, 18 September 2019

New Zealand

Ms Jane Coombs

Norway

Mr Per Egil Selvaag

The Economy of Well-Being

What must business do today?

Opening Session of NYC Climate Week

Poland

Mr Aleksander Surdej

Portugal

Mr Bernardo Lucena

Remarks delivered in Brussels, Belgium, 8 July 2019

Remarks delivered in New York, US, 23 September 2019

G7 Finance Ministers and Central Bank Governors Meeting: Addressing risks in the global economy and the financial systems

Placing Well-being at the Heart of Climate Policy

Remarks delivered in Chantilly, France, 17 July 2019

Remarks delivered in New York, US, 23 September 2019

G7 Finance Ministers and Central Bank Governors Meeting: International Taxation

Aligning Development Co-operation with the Paris Agreement

Remarks delivered in Chantilly, France, 17 July 2019

Remarks delivered in New York, US, 24 September 2019

G7 Finance Ministers and Central Bank Governors Meeting: Fighting Inequalities Between and Within Countries

Tax Inspectors without Borders

Remarks delivered in Biarritz, France, 18 July 2019

Remarks delivered in New York, US, 25 September 2019

Slovak Republic Ms Ingrid Brocková Slovenia

Ms Irena Sodin

Spain

Mr Manuel Escudero

Sweden

Ms Anna Brandt

Switzerland

Mr Giancarlo Kessler

Turkey

Mr Erdem Başçi

United Kingdom Mr Christopher Sharrock United States

Mr Andrew Haviland Chargé d’Affaires a.i.

—­— European Union Mr Didier Lenoir Colombia

Mr Jaime Castro

September 2019

OECD Observer No 319-320 Q3-Q4 2019

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Calendar highlights Please note that many of the OECD meetings mentioned are not open to the public or the media and are listed as a guide only. All meetings are in Paris, France, unless otherwise stated. For a comprehensive list, see the OECD website at www.oecd.org/newsroom/upcomingevents JUNE

SEPTEMBER

14

Launch of Government at a Glance 2019

3

Conference on competition and the digital economy

1-2

Japan G20 Employment Ministerial, Matsuyama, Ehime, Japan

14

4-7

Civil Society Days

10

Launch of Education at a Glance 2019

Launch of OECD Environmental Performance Reviews: Denmark 2019, Copenhagen, Denmark

13

OECD Policy Forum on Blockchain

18

Launch of Environment at a Glance 2019

16-20 Conference on VAT Guidelines on Digital Economy, Yangzhou City, China

20

OECD Conference on Child Well-being

21

Launch of the OECD Economic Outlook

19-20 Business at OECD Employment, Labour and Social Affairs Committee Strategy Meeting

25-28 OECD Eurasia Week 2019, Tbilisi, Georgia

8-9 OECD Secretary-General’s Report on Tax to the G20 Finance Ministers, Fukuoka, Japan 11

Launch of Artificial Intelligence in Society, Tokyo, Japan

12-13 Global Forum on Responsible Business Conduct, Bangkok, Thailand 12-13 International Forum on Intellectual Property Enforcement 16

G20 Report on Fossil Fuel Subsidies, Tokyo, Japan

25

Launch of OECD Economic Surveys: New Zealand 2019, Wellington, New Zealand

24-25 Latin American and Caribbean Competition Forum, San Pedro Sula, Honduras OCTOBER 3 7-8

OECD Expert Group on the Economics of Public Health

JULY

10

OECD Forum on Trust in Business

1-2

OECD Committee on Digital Economy Policy Meeting

15

Launch of Environment at a Glance 2019

29

3

Launch of Aid for Trade at a Glance 2019

30

3

Secretary-General’s 4th biennial Climate Change Lecture, Geneva, Switzerland

NOVEMBER

5

G7 Education and Development Ministers’ Meeting

8

Launch of Going for Growth 2019

11

Launch of OECD Economic Surveys: Austria 2019

Green Growth and Sustainable Development Forum

27

Launch of Pensions at a Glance 2019

29

19th International Economic Forum on Africa

DECEMBER 2-13 COP 25—Conference of the Parties to the UN on Convention on Climate Change (UNFCCC), Madrid, Spain 3

Launch of OECD PISA 2018 Initial Results

6th Forum on Green Finance and Investment

5-6

Global Forum on Competition

4th Business at OECD Forum on Health

9

Public consultation meeting on the Global AntiBase Erosion (GloBE) Proposal under Pillar Two

7

Launch of Health at a Glance 2019

7-8

OECD Working Party on Health Care Quality and Outcomes

13

Launch of Pharmaceutical Residues in Freshwater: Hazards and Policy Responses

This strip originally appeared in OECD Observer No 256, July 2006

32

Business at OECD/OECD Joint Conference on Higher Education

25

10-11 OECD Local Development Forum, Antwerp, Belgium 10

Trade Union Advisory Committee Meeting

11-12 26th Session of the OECD Health Committee

BOOKS OECD iLibrary

Treat the opioid epidemic as a public health crisis The opioid crisis continues to devastate families and communities, especially in North America, but also increasingly in Sweden, Norway, Ireland, and England and Wales. This is in part due to doctors’ over-prescription: in the United States, for example, 240 million opioid prescriptions were dispensed in 2015, nearly one for every adult in the general population. Illegal opioids are also increasingly available.

With greater availability, overdose deaths are rising. In the United States, 399,230 people died from opioid overdose between 1999 and 2017, while in Canada, more than 10,000 people died between January 2016 and September 2018, and

in Australia, more than 1,000 people die each year. There’s an economic cost to this human tragedy, too–in the United States, for example, the opioid crisis led to the loss of 12 billion work hours between 1999 and 2015, ultimately costing the country 702 billion in lost real output.

This report looks at the magnitude of the opioid crisis across OECD countries, describing its impact on health care systems, social services, and law enforcement as well as the crisis’ impact on specific groups. Three out of four opioid deaths involve men, while prisoners are far more likely than the general population to abuse opioids.

Pregnant women and mentally ill people are also more likely to be at risk.

What needs to be done? The report recommends that opioid use disorders (OUDs) be considered a chronic health condition and primarily addressed as a

public health issue. This should guide the design of health policy responses, but also social policy and law enforcement strategies. For example, medicationassisted therapy, complemented with psychosocial support, could be supported both by the health sector and law enforcement, facilitating the connection of low-level offenders with health care.

Likewise, health care networks can offer more recovery and reinsertion opportunities to OUD patients by having good communication with employment or housing support services. More closely monitored prescription by doctors and use of alternative chronic pain management options are also key to addressing the crisis.

OECD (2019), Addressing Problematic Opioid Use in OECD Countries, OECD Health Policy Studies, OECD Publishing, Paris, https://doi.org/10.1787/a18286f0-en oe.cd/obs/2Re

Watching your basic behaviour Forgetting to file your taxes on time. Not cleaning up after your dog when it leaves a mess on a public street.

Driving above the speed limit.

Why do we behave in certain ways and not others? Why are certain polices effective, eliciting desired behaviours and improving people’s lives, while others fail to do so?

Behavioural science has shown that our choices and actions are all influenced both by context and our own biases and that a more nuanced understanding of human behaviour can lead to better policies.

Policymakers who want to achieve impact should consider what actually drives the decisions and behaviours of citizens rather than relying on assumptions of how they should act. And they can draw on behavioural insights (BI) to do so.

Grounded in rigorous research from behavioural economics and the behavioural sciences, BI can help public bodies understand citizen needs and why citizens behave as they do, as well as allow them to pre-test policy solutions.

By integrating BI into the policymaking process, governments can better anticipate the behavioural consequences of a policy and, ultimately, design and deliver more effective policies that improve the welfare of citizens.

This report provides concrete guidance on how to apply BI more systematically and responsibly. Its toolkit helps

policymakers work through the “BASIC” (Behaviours, Analysis, Strategies, Interventions and Change) methodology and apply BI to any policy problem from start to finish. By understanding how and under what circumstances BI can be applied to cause behaviour change, policymakers are far more likely to design and deliver effective policies.

Although the report is geared to policymakers who have limited or even no experience with BI, it will also be of interest to confirmed BI practitioners and points readers who are ready to go further towards a wealth of resources.

OECD (2019), Tools and Ethics for Applied Behavioural Insights: The BASIC Toolkit, OECD Publishing, Paris, https://doi.org/10.1787/9ea76a8f-en oe.cd/obs/2Rf

OECD Observer No 319-320 Q3-Q4 2019

33

BOOKS OECD iLibrary

New publications Applying the OECD Principles on Water Governance to Floods: A Checklist for Action

Recent Trends in International Migration of Doctors, Nurses and Medical Students

This report uses the OECD Principles on Water Governance as a tool for multi-stakeholder policy dialogue and practical assessment of the performance of flood governance systems. It applies the Principles to flood-prone contexts to help strengthen governance frameworks for managing risk.

This report describes recent trends in the international migration of doctors and nurses in OECD countries. It includes four case studies on the internationalisation of medical education in Europe (France, Ireland, Poland and Romania) as well as a case study on the integration of foreign-trained doctors in Canada.

ISBN: 978-92-64-543-676, June 2019, 140 pages €19, $21, £14, ¥2300

ISBN: 978-92-64-318-656, July 2019, 139 pages €21, $25, £16, ¥2700

Agricultural Policy Monitoring and Evaluation 2019 This annual report monitors and evaluates agricultural policies spanning all 6 continents, including the 36 OECD countries, the 5 non-OECD EU Member States, and 12 emerging economies.

ISBN: 978-92-64-632-622 July 2019, 190 pages €46, $55, £36, ¥6000

Waste Management and the Circular Economy in Selected OECD Countries: Evidence from Environmental Performance Reviews This report provides a cross-country review of waste, materials management and circular economy policies in selected OECD countries, drawing on OECD’s Environmental Performance Reviews during the period 2010-17. It presents main achievements, common trends and policy challenges, and provides insights into the effectiveness and efficiency of policy frameworks.

ISBN: 978-92-64-309-395, September 2019, 116 pages. €15, $18, £12, ¥1900

34

All publications are available to read and share at www.oecd-ilibrary.org

Good Governance in Egypt This report looks at the role of legislative drafting manuals in enhancing legislative and regulatory quality.

It presents examples from both OECD and MENA countries and discusses the preparation of Egypt’s legislative drafting guide, among the first of its kind in the region, offering tailored policy recommendations on maximising its potential.

ISBN: 978-92-64-311-442, August 2019, 49 pages €15, $18, £12, ¥1900

Linking Indigenous Communities with Regional Development There are 38 million Indigenous peoples living across 12 OECD countries. Supporting their economic inclusion at local and regional levels is essential to overcoming the significant gaps in well-being that continue to exist between Indigenous and non-Indigenous populations.

This report provides recommendations for achieving vibrant local and regional Indigenous economies.

ISBN: 978-92-64-167-940, July 2019, 344 pages €60, $72, £48, ¥7800

Digital Opportunities for Better Agricultural Policies Recent digital innovations provide opportunities to deliver better policies for the agriculture sector by helping to overcome information gaps and asymmetries, lower policyrelated transaction costs, and enable people with different preferences and incentives to work better together. This report explores opportunities to improve current agricultural and agri-environmental policies, and to deliver new, digitally enabled and information-rich policy approaches.

ISBN: 978-92-64-887-885 €30, $36, £34, ¥3900

OECD Labour Force Statistics 2019 This annual edition of Labour Force Statistics provides detailed statistics on labour force, employment and unemployment, broken down by gender, as well as unemployment duration, employment status, employment by sector of activity and part-time employment. It contains participation and unemployment rates by gender and detailed age groups as well as comparative tables for the main components of the labour force.

ISBN: 978-92-64-313-224, September 2019 €78, $94, £62, ¥10200

Working Better with Age People today are living longer than ever before, but what is a boon for individuals can be challenging for societies.

If nothing is done to change existing work and retirement patterns, the number of older inactive people who will need to be supported by each worker could rise by around 40% between 2018 and 2050, on average in the OECD area.

ISBN: 978-92-64-455-269, August 2019, 80 pages €15, $18, £12, ¥1900

BOOKS OECD iLibrary

Focus on education Education Policy Outlook 2019: Working Together to Help Students Achieve their Potential This report analyses the evolution of key education priorities and key education policies in 43 education systems. It compares developments in education policy ecosystems between 2015 and 2019 with education policies adopted between 2008 and 2014. It looks into “what is being done” as well as “why and how it works” to help education systems gain better understanding of how policies can have greater opportunities of success in their specific contexts.

ISBN: 978-92-64-763-586 €90, $108 £82, ¥11700, September 2019, 600 pages

Financial Incentives to Promote Adult Learning in Australia Australia requires a strong system of adult learning to position firms and workers to succeed as skill demand changes. This report finds that Australia has scope to improve the coverage and inclusiveness of its adult learning system, of which coverage has declined since 2012 and in which several vulnerable groups are under-represented. It also provides policy recommendations for how Australia could reform its financial incentives to boost participation.

ISBN: 978-92-64-406-940, August 2019, 72 pages €15, $18 £12, ¥1900

Education at a Glance 2019: OECD Indicators Education at a Glance is the authoritative source for information on the state of education around the world. It provides data on the structure, finances and performance of education systems across OECD countries and a number of partner economies.

ISBN: 978-92-64-888-111, September 2019, 520 pages. €78, $94, £62, ¥10200

All publications available at www.OECD-iLibrary.org Vocational Education and Training in

Bulgaria: Governance and Funding Over recent years, Bulgaria has shown great willingness to reform its vocational education and training (VET). Significant challenges remain to the system’s responsiveness to labour market needs and its capacity to ensure equitable outcomes for learners. This report is a focused review of the governance and funding of VET.

ISBN: 978-92-64-483-811, June 2019, 54 pages €15, $18, £12, ¥1900

Good Practice for Good Jobs in Early Childhood Education and Care Recruiting and retaining skilled staff is a longstanding challenge for the early childhood education and care (ECEC) sector. OECD countries are increasingly demanding that ECEC staff be highly skilled and highly qualified, but low wages, a lack of status and public recognition, poor working conditions, and limited opportunities for professional development make recruitment and retention difficult. What can countries do to build a highly qualified and well-trained ECEC workforce?

ISBN: 978-92-64-800-380, June 2019, 53 pages €15, $18, £12 ¥1900

Benchmarking Higher Education System Performance The scope of contemporary higher education is wide and concerns about the performance of higher education systems are widespread. The number of young people with a higher education qualification is expected to surpass 300 million in OECD and G20 countries by 2030. Higher education systems are faced with challenges including expanding access, containing costs, and ensuring the quality and relevance of provision.

The Road to Integration: Education and Migration This report looks at eight pillars of policymaking that are crucial if education systems are to effectively support newcomers.

For each pillar, the report details a set of principles driving the design and implementation of system-level policies and school-level practices.

ISBN: 978-92-64-569-775, June 2019, 140 pages €15, $18, £12, ¥1900

OECD Reviews of Evaluation and Assessment in Education: North Macedonia How can assessment and evaluation policies work together to improve student outcomes in primary and secondary schools? The country reports in this series analyse major issues facing evaluation and assessment policy to identify improvements to enhance the quality, equity and efficiency of school education.

ISBN: 978-92-64-845-251, June 2019, 240 pages €36, $43, £28, ¥4600

How’s Life in the Province of Córdoba, Argentina?

This report assesses well-being in the four largest urban agglomerations of the province of Córdoba and provides policy recommendations to strengthen regional development practices and to improve people’s well-being. Using around 30 statistical indicators, the report analyses the performance of Córdoba’s agglomerations in 12 well-being dimensions.

ISBN: 978-92-64-980-709, September 2019, 120 pages. €18, $21, £14, ¥2300

ISBN: 978-92-64-686-472, June 2019, 644 pages €63, $75, £50, ¥8100

OECD Observer No 319-320 Q3-Q4 2019

35

BOOKS OECD iLibrary

Middling through Every generation since the baby boom has seen its middle class shrink and the economic influence of that class weaken.

Should we care?

Yes, according to Under Pressure: The Squeezed Middle Class, which shows why a strong, prosperous middle class is crucial for any successful economy and cohesive society. The middle class sustains consumption, drives investment in education, health and housing, and pays taxes that support social protection systems. Societies with a strong middle class have lower crime rates, enjoy higher levels of trust and life satisfaction, as well as greater political stability and good governance.

If that’s the case, why does today’s middle class feel so squeezed? One reason is the higher cost of living, which has hit the middle class hard: house prices have risen faster than household incomes, as have health and education costs.

At the same, time, middle-class wages have stagnated and job security has declined as globalisation and automation have reshaped the world of work. So it’s not surprising that more than 1 in 5 middle-income households spend more than they earn. Wealth is increasingly concentrated among richer groups too, with the top 10% in the income distribution holding almost 50% of all wealth.

Nor is it a surprise to see middle-class people in so many countries pointing the finger at the current socio-economic system as unfair and demanding their proper share from economic growth. This

has translated into rising populism and social unrest.

This OECD report takes an in-depth look at the facts and figures behind the headlines and protests. It documents the pressures and growing risks facing the middle class–and it discusses solutions.

It argues that tax and benefit systems need to be made fairer and recommends reforms to improve access to housing and education. It calls for addressing inequalities “at the root”, through education and training for fast changing workplaces. The report makes the case for policy action now, to ease the squeeze on middle-class households and restore the “middle class dream” once again.

OECD (2019), Under Pressure: The Squeezed Middle Class, OECD Publishing, Paris, https://doi.org/10.1787/689afed1-en.

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Your country has talent

The trouble is that more jobs in lowerproductivity activities means more

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attractiveness can help provide some benchmarks.

How does your country compare? Find out by visiting: www.oecd.org/migration/ talent-attractiveness/

The data shows, for instance, that Australia is particularly attractive to highly educated workers, while Canada appeals to entrepreneurs and international university students are drawn to Switzerland.

Not all jobs are created equal

oe.cd/obs/2Uj

New jobs mainly in lower productivity sectors % of jobs created by births in sectors with above-median productivity as share of all employment created by employer enterprise births, selected countries

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Note: See source for more countries http://dx.doi.org/10.1787/sdbs-data-en Source: OECD SME and Entrepreneurship Outlook

lower-paid jobs. This also weighs down average salaries in the economy as a whole.

Between 2010 and 2016, for example, close to 90% of all new jobs in France were created in activities with below-average

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New businesses are thriving, and are generating millions of new jobs along the way. However, many of these new jobs are in low-productivity sectors. This means new jobs in hospitality and food services in Great Britain and Greece, for instance, and in construction in Italy and Norway.

In almost every major OECD economy, the top three sectors generating the largest net employment gains over the period 2010 to 2016 were restaurants, health and residential care activities, and these had below average labour productivity. In contrast, the level of jobs created in small and medium-sized firms with above median productivity has been dropping since 2006. Economists believe that this has contributed to lower growth in OECD productivity in recent decades.

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Highly educated workers

Au

Does your country have what it takes to attract talent? Young people entering the labour market today are more educated than older workers, and as digitalisation and globalisation reshape demand for skills, countries look beyond their borders to meet their needs. However, luring in highly qualified migrants is easier said than done, since many of them, whether in areas such as health, technology or finance, find themselves in the driving seat as the competition for global talent intensifies and in a position to pick their destinations more carefully in line with their own career plans. Countries have to be appealing to them, as well as the other way around. So, what makes skilled migrants choose one country instead of another?

OECD countries for potential migrants Top Attractiveness 10-ranked countries forof highly educated workers, entrepreneurs and university students Top 10-ranked 10-ranked countries countries for for highly highly educated educated workers, workers, entrepreneurs entrepreneurs and and university university students students Top

http://dx.doi.org/10.1787/888933924039

wages; this number was close to 65% in Germany and the UK, and over 75% in the US. oe.cd/obs/2Uk

OECD Observer No 319-320 Q3-Q4 2019

37

DATABANK % CHANGE FROM: PREVIOUS PERIOD

38

LEVEL:

PREVIOUS YEAR

CURRENT PERIOD

SAME PERIOD LAST YEAR

Australia

Gross domestic product Industrial production Consumer price index

Q1-2019 0.4 1.8 Q1-2019 0.5 1.0 Q1-2019 0.0 1.3

Current balance Unemployment rate Interest rate

Q1-2019 -2.1 -8.2 Q1-2019 5.0 5.5 Q1-2019 2.0 1.8

Austria

Gross domestic product Industrial production Consumer price index

Q1-2019 0.4 1.6 Q1-2019 2.0 6.3 Q1-2019 -0.3 1.7

Current balance Unemployment rate Interest rate

Q4-2018 1.8 2.8 Q1-2019 4.7 5.0 Q1-2019 -0.3 -0.3

Belgium

Gross domestic product Industrial production Consumer price index

Q1-2019 0.3 1.2 Q1-2019 2.7 3.8 Q1-2019 0.2 2.2

Current balance Unemployment rate Interest rate

Q4-2018 -2.7 1.0 Q1-2019 5.8 6.1 Q1-2019 -0.3 -0.3

Canada

Gross domestic product Industrial production Consumer price index

Q1-2019 0.1 1.3 Q4-2018 -0.6 2.6 Q1-2019 0.6 1.6

Current balance Unemployment rate Interest rate

Q1-2019 -13.0 -12.9 Q1-2019 5.8 5.8 Q1-2019 2.0 1.6

Chile

Gross domestic product Industrial production Consumer price index

Q1-2019 0.0 1.9 Q1-2019 -1.5 -1.4 Q1-2019 0.2 2.3

Current balance Unemployment rate Interest rate

Q1-2019 -2.0 -1.2 Q1-2019 6.9 6.9 Q4-2018 2.8 2.5

Czech

Republic

Gross domestic product Industrial production Consumer price index

Q1-2019 0.6 2.6 Q1-2019 -0.2 0.6 Q1-2019 1.3 2.7

Current balance Unemployment rate Interest rate

Q4-2018 1.1 0.6 Q1-2019 2.0 2.3 Q1-2019 2.0 0.9

Denmark

Gross domestic product Industrial production Consumer price index

Q1-2019 0.2 2.2 Q1-2019 -2.0 3.5 Q1-2019 0.3 1.2

Current balance Unemployment rate Interest rate

Q1-2019 5.3 5.0 Q1-2019 5.3 5.0 Q1-2019 -0.3 -0.3

Estonia

Gross domestic product Industrial production Consumer price index

Q1-2019 0.5 4.6 Q1-2019 0.7 3.5 Q1-2019 -0.4 2.3

Current balance Unemployment rate Interest rate

Q4-2018 0.1 0.3 Q1-2019 4.3 6.5 Q1-2019 -0.3 -0.3

Finland

Gross domestic product Industrial production Consumer price index

Q1-2019 0.2 1.2 Q1-2019 0.4 0.3 Q1-2019 -0.1 1.2

Current balance Unemployment rate Interest rate

Q4-2018 -1.0 0.5 Q1-2019 6.7 8.0 Q1-2019 -0.3 -0.3

France

Gross domestic product Industrial production Consumer price index

Q1-2019 0.3 1.2 Q1-2019 0.9 0.5 Q1-2019 -0.2 1.2

Current balance Unemployment rate Interest rate

Q4-2018 -2.5 -6.0 Q1-2019 8.7 9.2 Q1-2019 -0.3 -0.3

Germany

Gross domestic product Industrial production Consumer price index

Q1-2019 0.4 0.7 Q1-2019 -0.1 -2.2 Q1-2019 -0.6 1.4

Current balance Unemployment rate Interest rate

Q4-2018 68.0 79.9 Q1-2019 3.2 3.5 Q1-2019 -0.3 -0.3

Greece

Gross domestic product Industrial production Consumer price index

Q1-2019 0.2 1.3 Q1-2019 0.2 1.3 Q1-2019 -1.5 0.7

Current balance Unemployment rate Interest rate

Q4-2018 -1.6 -1.9 Q4-2018 18.6 21.0 Q1-2019 -0.3 -0.3

Hungary

Gross domestic product Industrial production Consumer price index

Q1-2019 1.5 5.2 Q1-2019 3.2 6.3 Q1-2019 0.5 3.2

Current balance Unemployment rate Interest rate

Q4-2018 0.5 1.0 Q1-2019 3.4 3.7 Q1-2019 0.1 0.0

Iceland

Gross domestic product Industrial production Consumer price index

Q1-2019 0.6 3.8

.. ..

Q1-2019 0.4 3.1

Current balance Unemployment rate Interest rate

Q1-2019 0.4 0.2 Q1-2019 3.0 3.1 Q1-2019 5.0 4.7

Ireland

Gross domestic product Industrial production Consumer price index

Q4-2018 0.1 2.6 Q1-2019 2.6 2.4 Q1-2019 -0.1 0.8

Current balance Unemployment rate Interest rate

Q4-2018 5.1 14.9 Q1-2019 5.0 5.9 Q1-2019 -0.3 -0.3

Israel

Gross domestic product Industrial production Consumer price index

Q1-2019 1.3 3.2 Q1-2019 2.2 0.4 Q1-2019 -0.2 1.3

Current balance Unemployment rate Interest rate

Q4-2018 4.2 2.2 Q1-2019 4.0 3.7 Q1-2019 0.3 0.1

Italy

Gross domestic product Industrial production Consumer price index

Q1-2019 0.1 -0.1 Q1-2019 1.0 -0.5 Q1-2019 0.1 1.0

Current balance Unemployment rate Interest rate

Q4-2018 11.1 14.9 Q1-2019 10.4 10.9 Q1-2019 -0.3 -0.3

Japan

Gross domestic product Industrial production Consumer price index

Q1-2019 0.5 0.8 Q1-2019 -2.4 -1.2 Q1-2019 -0.3 0.3

Current balance Unemployment rate Interest rate

Q1-2019 34.4 47.0 Q1-2019 2.4 2.5 Q1-2019 0.0 0.1

Korea

Gross domestic product Industrial production Consumer price index

Q1-2019 -0.3 1.8 Q1-2019 -2.9 -1.7 Q1-2019 -0.3 0.5

Current balance Unemployment rate Interest rate

Q1-2019 11.8 15.6 Q1-2019 4.0 3.7 Q1-2019 1.9 1.7

Latvia

Gross domestic product Industrial production Consumer price index

Q1-2019 -0.1 3.2 Q1-2019 -0.8 -0.9 Q1-2019 0.6 2.9

Current balance Unemployment rate Interest rate

Q1-2019 0.3 0.3 Q1-2019 6.6 7.8 Q1-2019 -0.3 -0.3

Lithuania

Gross domestic product Industrial production Consumer price index

Q1-2019 1.0 3.8 Q1-2019 -2.3 4.7 Q1-2019 0.1 2.1

Current balance Unemployment rate Interest rate

Q4-2018 0.5 0.3 Q1-2019 6.0 6.5 Q1-2019 -0.3 -0.3

Luxembourg

Gross domestic product Industrial production Consumer price index

Q4-2018 0.3 1.7 Q1-2019 -1.6 -2.6 Q1-2019 -0.1 2.0

Current balance Unemployment rate Interest rate

Q4-2018 -0.7 1.4 Q1-2019 5.3 5.5 Q1-2019 -0.3 -0.3

Mexico

Gross domestic product Industrial production Consumer price index

Q1-2019 -0.2 0.1

.. ..

Q1-2019 0.9 4.1

Current balance Unemployment rate Interest rate

Q1-2019 -2.4 -4.5 Q1-2019 3.4 3.3 Q1-2019 8.6 7.8

DATABANK % CHANGE FROM: PREVIOUS PERIOD

LEVEL:

PREVIOUS YEAR

CURRENT PERIOD

SAME PERIOD LAST YEAR

Netherlands

Gross domestic product Industrial production Consumer price index

Q1-2019 0.5 1.8 Q1-2019 1.1 -1.1 Q1-2019 0.6 2.5

Current balance Unemployment rate Interest rate

Q4-2018 27.1 25.7 Q1-2019 3.4 4.1 Q1-2019 -0.3 -0.3

New Zealand

Gross domestic product Industrial production Consumer price index

Q4-2018 0.5 2.5 Q4-2018 -1.7 0.3 Q1-2019 0.1 1.5

Current balance Unemployment rate Interest rate

Q4-2018 -1.7 -1.5 Q1-2019 4.2 4.4 Q1-2019 1.9 1.9

Norway

Gross domestic product Industrial production Consumer price index

Q1-2019 -0.1 1.4 Q1-2019 -4.9 -5.0 Q1-2019 0.3 3.0

Current balance Unemployment rate Interest rate

Q4-2018 6.8 5.4 Q1-2019 3.7 3.9 Q1-2019 1.3 0.9

Poland

Gross domestic product Industrial production Consumer price index

Q1-2019 1.5 4.7 Q1-2019 3.1 6.8 Q1-2019 0.2 1.2

Current balance Unemployment rate Interest rate

Q4-2018 -1.7 -1.1 Q1-2019 3.8 4.0 Q1-2019 1.7 1.7

Portugal

Gross domestic product Industrial production Consumer price index

Q1-2019 0.5 1.8 Q1-2019 -1.0 -3.9 Q1-2019 -1.1 0.8

Current balance Unemployment rate Interest rate

Q4-2018 -0.5 0.5 Q1-2019 6.5 7.6 Q1-2019 -0.3 -0.3

Slovak

Republic

Gross domestic product Industrial production Consumer price index

Q1-2019 0.9 3.8 Q1-2019 1.9 7.0 Q1-2019 1.3 2.4

Current balance Unemployment rate Interest rate

Q4-2018 -0.9 -0.1 Q1-2019 5.8 7.1 Q1-2019 -0.3 -0.3

Slovenia

Gross domestic product Industrial production Consumer price index

Q1-2019 0.8 3.7 Q1-2019 3.2 4.3 Q1-2019 -0.7 1.3

Current balance Unemployment rate Interest rate

Q4-2018 0.9 1.0 Q1-2019 4.4 5.6 Q1-2019 -0.3 -0.3

Spain

Gross domestic product Industrial production Consumer price index

Q1-2019 0.7 2.4 Q1-2019 1.0 -0.2 Q1-2019 -1.3 1.1

Current balance Unemployment rate Interest rate

Q4-2018 3.0 7.6 Q1-2019 14.2 16.1 Q1-2019 -0.3 -0.3

Sweden

Gross domestic product Industrial production Consumer price index

Q1-2019 0.6 2.0 Q1-2019 0.1 1.2 Q1-2019 -0.2 1.9

Current balance Unemployment rate Interest rate

Q1-2019 6.2 2.0 Q1-2019 6.3 6.2 Q1-2019 -0.4 -0.7

Switzerland

Gross domestic product Industrial production Consumer price index

Q1-2019 0.6 1.4

.. ..

Q1-2019 -0.1 0.6

Current balance Unemployment rate Interest rate

Q4-2018 15.4 13.2 Q1-2019 4.7 4.9 Q1-2019 -0.7 -0.7

Turkey

Gross domestic product Industrial production Consumer price index

Q1-2019 1.3 -2.8 Q1-2019 1.7 -4.8 Q1-2019 0.8 19.9

Current balance Unemployment rate Interest rate

Q4-2018 2.3 -15.3 Q4-2018 12.2 10.1

.. ..

United

Kingdom

Gross domestic product Industrial production Consumer price index

Q1-2019 0.5 1.8 Q1-2019 1.3 0.6 Q1-2019 -0.2 1.8

Current balance Unemployment rate Interest rate

Q4-2018 -30.5 -20.9 Q4-2018 3.9 4.2 Q1-2019 0.9 0.6

United

States

Gross domestic product Industrial production Consumer price index

Q1-2019 0.8 3.2 Q1-2019 -0.5 2.9 Q1-2019 0.3 1.6

Current balance Unemployment rate Interest rate

Q4-2018 -134.4 -116.1 Q1-2019 3.9 4.1 Q1-2019 2.5 1.8

European

Union

Gross domestic product Industrial production Consumer price index

Q1-2019 0.5 1.5 Q1-2019 0.9 0.3 Q1-2019 0.1 1.6

Current balance Unemployment rate Interest rate

Q4-2018 44.1 67.4 Q1-2019 6.5 7.1

.. ..

Euro area

Gross domestic product Industrial production Consumer price index

Q1-2019 0.4 1.2 Q1-2019 0.8 -0.3 Q1-2019 -0.7 1.4

Current balance Unemployment rate Interest rate

Q4-2018 91.2 118.0 Q1-2019 7.8 8.5 Q1-2019 -0.3 -0.3

Gross domestic product Industrial production Consumer price index

Q1-2019 -0.2 0.4 Q1-2019 -0.7 -2.3 Q1-2019 0.9 4.1

Current balance Unemployment rate Interest rate

Q1-2019 -2.6 -2.8

.. ..

.. ..

1 China Gross domestic product

Industrial production Consumer price index

.. ..

.. ..

Q1-2019 0.4 1.8

Current balance Unemployment rate Interest rate

Q4-2018 38.1 57.4

.. ..

.. ..

1 India

Gross domestic product Industrial production Consumer price index

Q1-2019 1.4 6.0 Q4-2018 1.9 3.6 Q1-2019 2.0 7.1

Current balance Unemployment rate Interest rate

Q4-2018 -17.2 -13.4

.. ..

Q1-2019 6.5 6.3

1Indonesia

Gross domestic product Industrial production Consumer price index

Q1-2019 1.2 5.0

.. ..

Q1-2019 0.8 2.6

Current balance Unemployment rate Interest rate

Q1-2019 -7.3 -6.6

.. ..

Q1-2019 6.9 6.0

Russian

Federation

Gross domestic product Industrial production Consumer price index

Q4-2018 0.8 2.8 Q4-2018 0.1 3.4 Q1-2019 2.1 5.2

Current balance Unemployment rate Interest rate

Q4-2018 36.1 12.9

.. ..

Q1-2019 8.5 7.1

1 South

Africa

Gross domestic product Industrial production Consumer price index

Q1-2019 -0.9 0.0

.. ..

Q1-2019 0.7 4.2

Current balance Unemployment rate Interest rate

Q4-2018 -2.3 -2.1

.. ..

Q1-2019 7.3 7.2

Non-members 1

Brazil

Gross domestic product: Volume series; seasonally adjusted. Leading indicators: A composite indicator based on other indicators of economic activity, which signals cyclical movements in industrial production from six to nine months in advance. Consumer price index: Measures changes in average retail prices of a fixed basket of goods and services. Current balance: Billion US$; seasonally adjusted. Unemployment rate: % of civilian labour force, standardised unemployment rate; national definitions for Iceland, Mexico and Turkey; seasonally adjusted apart from Turkey. Interest rate: Three months.

Current balance data are reported according to the BPM6 classification.

..=not available, 1 Key Partners.

Source: Main Economic Indicators.

September 2019.

OECD Observer No 319-320 Q3-Q4 2019

39

DATABANK

Higher education rises but leaves question marks

Higher education on the rise % of 25-34 year-olds with higher education, 2008 → 2018 70%

The proportion of young adults with tertiary education increased by nearly 10 percentage points in all 36 OECD countries in 2008-2018. Higher education brings benefits. People with a tertiary degree are less vulnerable to unemployment for a start, and earn on average 57% more than adults with upper secondary education–this advantage increases with age, to 70% in the case of 45-54 year-olds.

Highly educated adults are also more likely to participate in cultural, sporting and public life, be in good health, and take care of the environment.

2018: 44%

60 50

2008: 35%

40 30 20 10

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Strong information and communication technologies skills can, in some cases, completely compensate for lower levels of educational attainment, Education at a Glance shows, particularly as technological advances are transforming the labour market and the future of work.

Source: Education at a Glance 2019

As well as IT, engineering, manufacturing and construction are also commonly associated with high earnings, yet, only 14% of tertiary graduates in 2017 obtained

a degree in these areas, and as few as 4% in IT. Little wonder they often struggle to fill vacancies.

outstrips men in most OECD countries, they account for less than 25% of entrants in these important sectors.

Women could be encouraged to take advantage of this, for although the proportion of tertiary-educated women

See www.oecd.org/education

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oe.cd/obs/2Ui

Across 1 Someone with unusual ability in a field 4 People need the right skills to get them 8 Change to meet new challenges 9 One-on-one teacher 10 Top students graduate with them (US spelling) 13 Amount to pay 14 Base number on a metric system 15 On-the-job learner 17 Farming sector, abbr.

19 Intellectual understanding 21 Abilities needed for certain jobs 23 Take 25 Movement from one country to another

Down 1 Share knowledge 2 Study to be able to apply 3 Clear, as pay 5 Choice 6 Big picture planning experts 7 C-suite exec in the tech sector 11 Possess 12 Exceptional 13 Middling grade 16 Linking 18 Lesson ___ (teacher’s outline) 19 PE locale 20 ___ for the course 22 Colourful fish 24 Arts degree

Myles Mellor is one of the top crossword writers in the world and has been producing them for the OECD Observer since 2013. You can try them online and on your mobile phone at www.oecdobserver.org/crossword. Subscribe to Myles’ crosswords at www.ilovecrosswords.com

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IT’S NOT WHAT YOU KNOW IT’S HOW YOU USE IT

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