Data Policy, Digital Governance & Digital Transformation

So first of all, OECD has 36 member countries, 22 of which are European. So the majority of our member States are already coming from Europe. But I think what we can do is act as a bridge between Europe, North America and Asia. And for policies that are digital, which are almost inherently global in their nature, that bridging function is incredibly strong. One example of this is we’ve been championing privacy really since 1982. We had the privacy guidelines, which went on to become the foundation for what is now GDPR.

It’s an exciting time to be in public policy cause a lot of things are being turned upside down. So there are a huge number of challenges. I mean there are the obvious ones which worry me and are very prevalent: dealing with the climate and the way it’s changing, dealing with demographic pressures as some parts of the world age and others still have a very young population. And then there are issues such as what the digital future society is dealing with, which is about digital transformation. We began to see these torrents of data being produced from about 2007 onwards and with every year they’ve picked up and there’s more and more.

It’s what’s called the three V’s: the volume, the velocity and the variety of data have just exploded.

And this gives us new capabilities but huge new policy challenges that really we’ve never confronted before.

So the Going Digital project has almost every policy issue under one relatively small roof. We have a policy round table discussing it formed by these committees made up of delegates from all of our member countries. And so what we decided to do is for complex problems like climate change or demographic challenges, but in this case, the digital transformation, we decided to use the multidisciplinarity of the OECD to look at these complex issues from different perspectives. And now we’re in the second phase, which is continuing to look at the issues, but with some deep dives into specific technologies that we think will dramatically affect public policies.

Innovation is essential for everything, really. When you study productivity, almost half of productivity gains, which are essential for improving our standards of living, come from technology and innovation. We’re seeing product turnovers in more innovations come faster than we ever have before. It’s a little bit hard to measure, but certainly if you’ll just look at patents you’ve seen these just go through the roof in almost every country. One of the reasons it’s exploding is because we’re seeing the digitalization of innovation. And to me this is exciting and this is how innovation will continue to take us further.

Most of the OECD countries are about two-thirds of all R&D comes from the business community and only about one third or less from government or higher education. And that’s because businesses see this as their lifeblood for staying competitive and boosting innovation and staying ahead of their competitors. So that requires a public-private integration and engagement is all the more important.

Now doing this isn’t easy. Completely different incentives, completely different objectives in many cases.

And so one of the things we’re exploring is how best to get public policy objectives built in upfront in the innovation cycle as opposed to waiting to the end.

Innovation is an important element of almost any solution to various problems that afflict society in the economy.

But I think what you need is that policy mix. Innovation needs to be part of it. But there are other things such as structural adjustment, you’ve got to move out of old sectors, mature sectors. The question is how do you begin to move those workers out of those old jobs into the 21st century jobs? And yeah, innovation will help, but it has to be done with other policies, some of which are gonna take painful political choices.

I’d like to think the OECD has been making a pretty good effort. There’s always going to be a gap between where the policy world is and where the technology world is. I mean, you’re never going to be able to eliminate it. The question is how do you narrow it? I think the nature of data has changed fundamentally over the last 20 years. I mean there’s great new things we can do to improve how we make policies, how we integrate them and how we evaluate them that we’ve never been able to do before. So we should really be able to up our game in terms of improving policies and with it people’s lives or going forward. The next step for the OECD on this is I think it’s very likely that in 2021–2022, we will undertake another one of these broad-based projects that just looks at data and the changing nature of it in terms of economic value, in terms of how policy should adapt to it and how policymaking can become much more agile and iterative. 

It does make it complex for a variety of reasons. As I said, a lot of the public officials in these more dedicated, some would say siloed, ministries aren’t used to the challenges or the opportunities that come from having data now become an important part of their sector. Policymakers, they’re risk-averse. There’s a good reason they get voted out, for making mistakes. And so it’s a really tough environment for them. That’s part of the reason why I think organizations like the Digital Future Society, but also the OECD, need to be in there helping them sort through this and kind of navigate this new terrain.

The fundamental prerequisites for governance are skills. They need skilled data scientists, people that can work with data to create analytical value for governments and for clients of government. The problem is these data scientists are scarce and their prices are being bid up by companies who need them as well. Some of the top AI data scientists, and there are estimates that there are only about 20,000 of them around the globe, are now being hired at ABI universities at about half a million us dollars per year. Now governments can’t afford that. And so the question is how do they begin to get those skills? And I think there are ways of doing it. I’ve talked to a lot of people in these big tech firms who are a little disillusioned and would be happy to go work for a government or an international organization where they can use their skills if they think it will make a difference.

I think first it starts with awareness. Citizens need to become more aware of the digital transformation underway so they can begin to understand what their options are and what are some of the things they should watch out for. And then it’s a matter of skilling and I think we’re lucky with the digital natives. They come pretty savvy and pretty adept at using a lot of these tools. It’s more for the older crowd, that sometimes get duped and really don’t know what’s going on. And I think there’s a reason why training and reskilling is incredibly important. Policies can make a difference. And I think they need to be crafted with a lot of foresight and thought, but we’re beginning to see that happen across the OECD. 

Let me first talk about data a bit because I think we have a tendency, particularly in the policy world, to immediately take all data and reduce it to personal data. And that’s important. Some data will be 100% personal, some of it may be 5 or 10. We have to get used to maybe taking the bigger picture here and sitting back and saying, ‘okay, what are the policy priorities?’ Privacy is clearly one of them. We may trade-off or somehow try to protect privacy too as much as we can to achieve this other goal, which is fighting a terrific, debilitating disease. So I think governments are going to have to begin to establish this bigger perspective. And with that, I think we may need new institutions, we may need new government officials to take this to a higher level and see it from more of a whole government perspective and working with their citizens. I think citizens have to become savvier about it too. 

I’m hopeful you’re going to see the marketplace respond with innovations that make different types of offers that allow people with different privacy preferences begin to choose. 

It’s about people becoming aware and it’s about practising what some people call digital hygiene and being clean, knowing where your data’s going, having a sense of how it may be misused, being aware of some companies, maybe having a more trustworthy treatment of your data than others. And then making choices. Now, regulations can help with some of this by enforcing penalties. There is a balance here between being too strict and too protective, versus allowing firms to experiment in this new world and figure out how to use this to create economic value, jobs and innovation. 

So one of the properties of the digital transformation that we looked at and the Going Digital project was what we call scale without mass. So what’s the right policy? It’s hard because these are global players and we are bound by these sovereign bodies. I’m hopeful that organizations like the OECD, the European Union, or the UN can begin to grow in their sophistication about these different companies and how to work with them to make sure that their activities are in line with policy objectives. What I worry about is this is where the OECD can help in the digital future society is by bridging things together.

I would say education and skills is one of the key areas for the digital transformation going forward and for making it as inclusive as possible. And so what it does mean? First, what we’re teaching needs to change. We need to stop teaching things that people memorize and are very rote. Instead what you need to teach is how do you frame the problem, how do you analyze it, how do you work in a group to solve it and how do you begin to communicate those results? We also need a much more variegated system, so not only primary and secondary, but you need vo-tech (vocational technologies).

I think before we think about the future of work, you need to think a little bit about the future of the firm. One of the things that dictate the shape of a firm is how information flows and then how it collects it to a certain level. The implications for work are huge here. It means that you’re probably not going to have a lifetime employer, that what we call nonstandard work now will probably become the standard. And I think people have to become much more used to being self-employed, looking out for themselves, protecting themselves, investing in themselves, having the incentive in themselves and policies needed to go along with this.

To me, future working means you’re going to be continuously learning, adapting. People like to learn and it will be far better than just being in the same rote position for many years. It’ll add a lot of dynamism to the economy. For some people, that’s a good thing. For other people, this could be a real challenge. I think policy needs to begin to look at that and help those people where it’s a real challenge.

As a famous scientific science fiction writer wrote:

The future’s already here. It’s just not evenly distributed.

And that’s exactly what’s going on. I think the most disruptive technology is data and it’s already here. It’s flowing all around us and it’s leading to new innovations like AI and taking them in a much different direction than what we ever thought. We thought it was going to be symbolic, AI, but instead, it’s this machine learning. Who knows where it’s going to go in a few more years. It’s leading to all new things that we would have never thought of.

It’s good policymakers can sense this digital transformation and they’re trying to prepare and prepare their populations. And the reason they’re doing that is because they want to ride the wave. They see it as a good thing, but at the same time, they know that there’s going to be an undercurrent and some people are going to be swept under and they want to protect those people. And I think that’s what they’re striving for and that’s what they’re trying to figure out. There are going to be mistakes, but that’s where places like the OECD can help exchange best practices between countries to try to figure out what works best in this new era. So I’m cautiously optimistic that we’re much better poised now than we were in those previous big tech shifts. But it’s no time to be complacent. There is an important shift going on. And I think policymakers need to step up to the challenge and try to engage with it the best they can.