DIGITALISATION AND THE FUTURE OF WORK: A DIGITAL TIPPING POINT?

OECD’s Global Parliamentarian Network

Andrew Wyckoff

Director of Science, Technology and Innovation

12 October 2016

IBM 360 (1964) – the first mainframe

Why all the attention now?

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Terrestrial mobile wireless Satellite Terrestrial fixed wireless All technologies, 2009

Subscriptions per 100 inhabitants

3 out of 4 OECD inhabitants now have mobile wireless broadband…

Mobile wireless broadband penetration, by technology, December 2009 and 2013

Subscriptions per 100 inhabitants

Source: OECD (2014), Measuring the Digital Economy. A New Perspective, OECD Publishing.http://dx.doi.org/10.1787/888933147973

…and people carry supercomputers (circa 1990) in their pockets.

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Smartphones Other mobile phonesMillions

Quarterly shipping trends of smartphones, 2010-13

Sources: NBC News, St Peter’s Square: http://instagram.com/p/W2FCksR9-e/ and OECD Broadband Portal

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This is just the beginning of the data-driven economy & society…

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Monthly global IP traffic, 2005-16 In exabytes (billions of gigabytes)

Average data storage cost, 1998-2012In USD per gigabyte (log scale)

Source: OECD based on Pingdom (2011) Source: OECD based on Cisco (2012)

…that generate huge data flows...

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…which is fueling a new type of disruptive innovation.

Algorithmic trading as share of total trading

Note: 2013-14 based on estimates.Source: OECD based on The Economist (2012) and Aite GroupDriverless car Siri

Notes: average employment growth of small (0-49) units. Digital sectors are IT and other information services and Telecommunications. Average over available years. Sectors covered: manufacturing, construction and non-financial business services. Owing to methodological differences, figures may deviate from officially published national statistics. Source: DynEmp v.2 database.

Embrace the Change: digital firms bring dynamism and jobs

Small Firm (0-49) net Job Growth, various years between 1997-2013

IMPLICATIONS FOR POLICY MAKERS

Two tech mega-trends that affect nearly all public policies

• Digitisation

• Internet

Atoms to Bits

Interconnection

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Digitisation

• Transformation of an image, sound, document or signal into binary form, which enables computer processing;

• Unlike analog data, digital data can be propagated indefinitely…

• …and this digital state allows recombined, versioned and tailored at low cost…

• …and stored and delivered anywhere at a low price. 11

http://sanfrancisco.cbslocal.com/2016/05/24/french-police-raid-googles-paris-offices-in-1-7-billion-tax-fraud-money-laundering-probe/; http://www.androidauthority.com/european-commission-google-antitrust-charges-687982/

Digitalisation: A decoupling of value creation from geography

Whatsapp, 300M active users, 20B message/day, 45 employees

Netflix, 30% peak Internet traffic, 2000 employees, USD3.5B revenue

Snapchat, 350M photos per day, 30 employees;

Dropbox, 175M users, 250 employees

Digitalisation: the ability to (globally) “scale” without “mass”

Expand our understanding of “data”• More than just “personal” data: 21st C infrastructure• The growing importance of data “analytics”• Ability to transform / manipulate = multi-sided markets

De-coupling of value creation from geography • Rise of nomadic workers; • Rise of irregular workers; • Emphasis on creativity, problem solving skills – not

routine work;

Sale without Mass• Small units of employment with global reach;• independent or combined into a “networked” firm

POLICY IMPLICATIONS

The Internet

• Uses standards that are commonly developed, voluntarily adopted, and openly available

global interoperability and efficiency

• Decentralised and open architecture: no government or monopolistic private control

permission-less usage: innovation and competition

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https://en.wikipedia.org/wiki/Telephone_switchboard; http://www.journaldugeek.com/2012/07/18/75-des-terriens-ont-un-telephone-portable/ http://www.agtmyanmar.com/Network.aspx; http://www.ebay.com/itm/REPAIR-Notebook-Laptop-DELL-XPS-M1530-15-MOTHERBOARD-/320690204504

http://mobile-computing-for-beginners.blogspot.fr/2013/04/samsung-galaxy-win-smartphone.html; http://www.cloudtp.com/2015/02/17/smart-labels-will-power-internet-things/

Concentration vs. decentralisation (rise of the edges)

From one-to-many to many-to-many…

…enabling new intermediaries: platforms.

De-concentration • Blurring of consumer vs. business;

employee and contractor;• Enables platform jobs, piece work

and on-demand scheduling• Data flows enable micro-targeting.

Re-concentration• New methods of labour organisation;• New intermediaries for policy

POLICY IMPLICATIONS

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OECD’s new “Horizontal” project on the Digitalisation of the Economy and Society