OECD Observer No 317-318, Q1-Q2 Double Edition 2019 by OECD

Look out for Augmented Reality inside!

No 317-318 Q1-Q2 2019

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Going digital p15 Human principles for AI p17 Notre Dame’s wounded soul p24 How culture helps local development p25 OECD Week goes digital p72 Book: Avoiding artificial bias p77

SPOTLIGHT from p37 Finland at the OECD: Celebrating the next 50 Innovation, circular economy Education, housing Environment: The (last) plastic straw

A people powered initiative by the OECD from page 7

“Technologies only change how we do things, not the core of what we do.”

©Stéphane Lagoutte/Agence MYOP

Satomi Fuluya, Japan, founder of an online platform for female job seekers

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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

FUTURE OF WORK CONTENTS

No 317-318 Q1-Q2 2019 www.oecdobserver.org What citizens from around the world have to say These individuals from all walks of life told us about their hopes, concerns and thoughts on the world of work and how it’s changing. These stories illustrate how jobs are evolving and how work is perceived in different places and professions, across gender and generations. To explore their stories go to: https://futureofwork.oecd.org/portraits

YOUR VIEWS 2

Trust and institutions, Renewing public trust, Pay gap, Integrating migrants, Comments; Twitterings

EDITORIAL 3

Going digital and creating that butterfly Angel Gurría, Secretary-General of the OECD

NEWS BRIEF 4

Global tax agreement reached–;–as trade weighs on economic outlook; Fossil fuel subsidies rise; Soundbites; Economy; Country roundup; Other stories; Plus ça change

BLOGS 6 BlogServer

FUTURE OF WORK 7

I am the future of work: A people powered initiative

DIGITAL 15 17 18 19 22

Going digital: Back to the future Andrew Wykoff Science and AI: Don’t forget the human factor Anne-Lise Prigent What are the OECD Principles on AI? Going digital i-Sheet The platform economy can deliver for its workers too Stijn Broecke and Sandrine Cazes

SOCIETY 24 Notre Dame de Paris: The wounded soul Tahar Ben Jelloun 25 OECD Observer Roundtable on culture and local development Lamia Kamal-Chaoui, Nathalie Bondil, Danielle Brazell, Wanjiru Koinange, Geoff Mulgan, Caroline Norbury, Walter Zampieri

www.oecdobserver.org www.oecdinsights.org ©OECD June 2019 ISSN 0029-7054 Tel.: +33 (0) 1 45 24 9112 Fax: +33 (0) 1 45 24 82 10 sales@oecd.org 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

29 Improving flood risk management: A proposal for Louisiana Discover Isidoro Campioni-Noack, Alba Medina Bermejo, people’s Jan-Dorus Sleutels, Cathy De Jongh, hopes and Lea Müller, Océane Girault concerns the 31 The G7 Primary Health Care Universal on future Knowledge Initiative of work Stefano Scarpetta and Francesca Colombo 32 In Indonesia, social protection can underpin democracy Alexander Pick 34 Five facts about regional inequalities and what to do about them Lamia Kamal-Chaoui The future of work, p7

SPOTLIGHT 37 Finland at the OECD: Celebrating the next 50!

OECD.ORG

OECD Observer No 317-318 Q1-Q2 2019

72 OECD Forum 2019: World in eMotion 73 OECD Ministerial Council Meeting 2019: Harnessing digital transition for sustainable development 74 Digital summit, Local governance and finance 75 Recent speeches by Angel Gurría; List of OECD Ambassadors 76 Calendar; Frankie

Going digital: Back to the future, p15

BOOKS 77 78 79 80

Reviews: Artificial bias; Societal intelligence New publications Focus on digitalisation Review: The cost of injustice

DATABANK 81 Empowering women beyond Finland; Productivity test 82 Main economic indicators 84 Sweden’s development lead; Crossword

Published in English and French by the OECD EDITOR-IN-CHIEF: Rory J. Clarke EDITORS, WRITERS: Kate Lancaster, Anne-Lise Prigent, Clara Young ASSISTANT EDITORS: Balázs Gyimesi, Cara Yakush EDITORIAL INTERNS: Anna Chapman, William Friend, Claire Hathaway LAYOUT: Design Factory, Ireland ILLUSTRATIONS: David Rooney, Sylvie Serprix ADVERTISING MANAGER: Aleksandra Sawicka 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.

Finland at the OECD: Celebrating the next 50!, p37

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. 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. 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. 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 ready to do my part. Together we can build a better world. #OECDForum – at OECD

We welcome your feedback. Send your letters to observer@oecd.org or post your comments at www.oecdobserver.org or www.oecdinsights.org

Trust and institutions

Integrating migrants

Trust is a very complex issue and distrust often reflects inequality, or a struggle for democratisation of some kind. Are democratic institutions equitable and are they also pluralistic? Pluralism in the full-democratic sense of the word both in the make-up of personnel, background, career experience, identity and composition, but also the methods employed to achieve outcomes. Structures and the architecture of the work programme which the institutions lead and deliver, must also

Such integration support should span beyond the first generation of refugees and migrants. The inter-generational trauma and disadvantages are one of the key attributes increasing the likelihood of radicalisation and incarceration in the second-generation.

reflect a pluralistic arrangement.

Rocio Ferro-Adams, commenting on “Across OECD countries, trust in institutions has plummeted” on LinkedIn at https://www.linkedin.com/feed/update/urn:li: activity:6532649682911416320, May 2019

— Renewing public trust It is against organisational nature to open up, yet without it innovation of any organisation withers. How can you promote a culture of openness and inclusion if you work with only a narrow band of people or government representatives from member countries only? Is it rhetoric or are you thinking of real solutions for renewal of public trust in policy matters?

Mario Svigir, commenting on “Across OECD countries, trust in institutions has plummeted” on LinkedIn at https://www.linkedin.com/feed/update/urn:li:activi ty:6532649682911416320, May 2019

— Pay gap As long as salary secrecy exists, so will the gender gap in salaries. Labour laws should prohibit the publication of jobs without their associated salary band. Transparency is the first step here.

Maria Ferrés, commenting on “Gender pay gap in selected OECD countries” on LinkedIn at https:// www.linkedin.com/feed/update/urn:li:activi ty:6546783148007665665, June 2019

Snow Li, commenting on “Improving resilience of integration systems for refugees and other vulnerable migrants” on LinkedIn at https://www.linkedin.com/ feed/update/urn:li:activity:6547501537080426496, June 2019

— Twitterings Karen Guggenheim @karenguggenheim Eliminating gender-based discrimination in social institutions could reduce the share of the “unhappy” population from 14% to 5% globally. Great to be at @theGESsummit today to be discussing women’s roles in the future of innovation. #GES2019 Source: @OECD

victoria donnaloja @vdonna91 Thomas Liebig at @OECD: immigrants feel closer to the UK than natives @HomeOfficeRD #IndicatorsOfIntegration

Silver Kayondo @SilverKayondo 129 countries have agreed to work together to reach agreement by 2020 on new ways to #tax the #digital economy, according to a programme of work by Organisation for Economic Cooperation and Development (OECD). The plan will be presented to G20 #Finance Ministers for endorsement. Alyssia M Jovellanos @alyssiajovella Honoured to be in Paris this week for the @OECD Forum. Our lives, societies and our world are transforming before our very eyes. As a young technologist, […] as a human.. I’m

Andreea STRACHINESCU #SETPlan19 #EUSEW19 @stracma The EU’s #BlueEconomy already generates more than €560 billion/year (2016) and several Member States have seen their #maritime economy grow faster than their national economy (2009-2019). According to @OECD report http://bit.ly/2X8UEF9 this trend is set to continue! #OurOcean Will Morris @WillMorris_DC The OECD work programme on the tax digitalisation project is one of the most significant international tax documents to come out in decades. Read it and then read it again! Everyone needs to understand the immense scope of possible changes. http://www.oecd.org/tax/beps/ programme-of-work-to-develop-a-consensussolution-to-the-tax-challenges-arising-from-thedigitalisation-of-the-economy.pdf Sabena Siddiqi @sabena_siddiqi The robots are coming... for your job. Almost half of all positions could be wiped out or radically altered in the next two decades due to automation, a report from the OECD warns. Liliana Martins @sdvlil Mar 29 “Every behaviour has a reason. The future we need is in the soft skills that children can develop to navigate through uncertainty. Students will need to develop curiosity, imagination, resilience and self-regulation” @OMLTA thank you Dr Jean Clinton for your powerful words @OECD Isabella Martorina @IMartorina You cannot be what you cannot see! We need to show girls that they can be entrepreneurs and work in business, from the early age, at primary school. @anneravanona @OECD @EY_WFF #MarchOnGender #WomenFastForward Thibault Larger @frogontheroof Dear @OECD, are there only men in your competition team? Three moderators and a chair, all men! #OECDcomp #Diversity #genderequality

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 these portals: www.oecdobserver.org, www.oecdinsights.org, or at the other OECD portals on this page.

Going digital and creating that butterfly We want to help empower people to succeed in a rapidly changing digital world of work

you may cut off avenues of research on dementia. At the same time, too light a touch may allow a concentration of power and even undermine democratic institutions. These issues not only touch virtually every aspect of domestic policy, but also raise many cross-border issues, including digital trade. They have risen to the top of the policy agenda at the UN–including ITU and UNESCO–as well as other international bodies, including the G20, the G7, the EU, APEC and here at the OECD. In 2016, ministers meeting in Cancún recognised the need for a coherent whole-of-government approach to the digital transformation, and launched the OECD Going Digital project. Work started in 2017 across 10 different OECD directorates, involving more than 14 different policy committees.

Angel Gurría Secretary-General of the OECD

The digital transformation is not new, but the pace of change has quickened, with our hyper-connected societies generating huge volumes of data of all kinds. This flood of data is transforming value generation, decisionmaking and production, similarly to how new materials or the advent of combustion engines transformed economies and societies in past eras. This transformation brings countless opportunities to improve well-being, from health care to education to the environment. The smartphone in your pocket can use AI to detect possible health issues, or speech recognition to offer on-the-spot translation. Camera-carrying robots can inspect the interior of oil pipelines, looking for fissures and averting environmental damage. Yet such benefits are accompanied by new pitfalls. Digital transformation is raising concerns about labour market polarisation and skill mismatches, breaches of privacy and security, growing market power for leading firms, and tax evasion and aggressive tax avoidance. It is also raising new concerns about inclusion and equality: more than 4 in 10 rural households don’t have access to high-speed broadband, while big data analysis is only performed by 11% of firms.

From the outset, the aim has been to strive for outcomes that put people at the centre–empowered by digital technologies, not controlled or impoverished by them. This effort has leveraged the best measurement, analysis and policy thinking, and has allowed us to produce a unique tool for governments–the OECD’s Going Digital Integrated Policy Framework. This is the first time that a holistic policy approach to the digital transformation has been formulated. […] We want to bridge digital divides for people and firms. We want to help empower people to succeed in a rapidly changing digital world of work. We want to strengthen trust and enhance access to data to drive innovation. And we want to build the next generation of data and indicators capable of monitoring and shaping the digital transformation. It is an ambitious project, I know, but the OECD can make magic when working with people like you! A successful digital transformation is about preparing people and governments to turn digital technologies into human development magic. In the words of MIT scientist George Westerman: “When the digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.” The OECD is ready to help you conceive that butterfly! @A_Gurria www.oecd.org/about/secretary-general/

The benefits and downsides raise challenges for policymakers in weighing costs and benefits associated with different policy options. Ban ride-sharing because it violates rules governing taxis and you may make it harder for poor people to get to work. Overly limit data access because of privacy concerns and

www.oecdobserver.org/angelgurria

For more on Going Digital, visit: https://www.oecd.org/going-digital/ Adapted from the secretary-general’s opening remarks to the OECD Going Digital Summit: The Promises of Digital Transformation, 11 March 2019. For the full original version, see: https://oe.cd/2wJ For updates on AI, see pages 18 and 73.

OECD Observer No 317-318 Q1-Q2 2019

News brief Global tax agreement reached– The international community has agreed on a road map for resolving the tax challenges arising from digitalisation, and committed to continue working toward a consensus-based long-term solution by the end of 2020. The 129 members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) adopted a Programme of Work laying out a process for reaching a new global agreement for taxing multinational enterprises.The document calls for intensifying international

discussions around two main pillars. The first pillar will explore potential solutions for determining where tax should be paid and on what basis, as well as what portion of profits could or should be taxed in the jurisdictions where clients or users are located. The second pillar will explore the design of a system to ensure that multinational enterprises–in the digital economy and beyond–pay a minimum level of tax. This pillar would provide countries with a new tool to protect their tax base from profit shifting.

Outlook

May 2019

OECD Economic

Real GDP growth in the OECD area picked up strongly to 0.6% in the first quarter of 2019, double the 0.3% rate of the previous quarter, according to provisional estimates. GDP growth in the seven largest economies accelerated markedly, with growth rates increasing between 0.3 and 0.4 percentage points in Germany, Italy, the UK and the US. It picked up marginally in Japan to 0.5%, from 0.4% and was stable in France at 0.3%, for the third consecutive quarter. GDP growth also picked up in the EU and the euro area to 0.5% and 0.4% respectively. Year-on-year GDP growth for the OECD area edged up to 1.9% from 1.8%.

OECD Economic Outlook

May 2019

Economy

No. 105

Fossil-fuel subsidies are environmentally harmful, costly, and distortive. After a three-year decline between 2013 and 2016, government support for fossil fuel

See http://www. oecd.org/economy/ economic-outlook/

Volume 2019/1

Fossil fuel subsidies rise

that the global economy will grow by 3.2% in 2019 and 3.4% in 2020 and includes downward revisions.

The digital economy only turns our lives upside down, it uses legal loopholes to take advantage of our cognitive biases for commercial ends. And it does so on a large scale. Maxime Sbaihi in Le Monde, 1 February 2019 (our translation) The secret of life lies with organised patterns of information. Your DNA is packed full with coded information, […] your brain processes information, […] in fact, if you look at the entire biosphere, it’s pulsating with information, it’s the original world wide web. Paul Davies, Professor at Arizona State University, interviewed on BBC Radio 4, 12 February 2019

–as trade weighs on economic outlook Escalating trade conflicts and dangerous financial vulnerabilities threaten to undermine investment and confidence worldwide, according to the OECD’s 2019 Economic Outlook. The global economy is expected to achieve moderate but fragile growth over the coming two years. According to OECD Chief Economist Laurence Boone, a slowdown in China adds to these risks. The OECD projects

Soundbites

Our aim may not be simple, but it is clearly focused: to end terrorist and violent extremist content online. This can succeed only if we collaborate. Jacinda Ardern, Prime Minister of New Zealand, The New York Times, 11 May Physical reality is coming to look a lot like virtual reality right now. David Chalmers, philosopher, in The New York Times, 18 June

production and use has risen again, threatening efforts to curb emissions and transition to green energy sources. Support across 76 countries increased by 5% to US$340 billion in 2017, according to

an OECD-IEA report prepared for the G20.The reversal comes as some countries reinstated stronger price controls on fossil fuels responding to volatility in international oil prices.

Meanwhile, for the G20 area GDP grew by 0.8% in the first quarter, slightly up from the previous quarter’s 0.7%.

April 2019, compared with 2.3% in March, as energy prices increased by 3.8%, compared with 2.7% in March. Excluding food and energy, inflation also picked-up marginally to 2.2%, compared with 2.1% in March 2019.

The OECD’s composite leading indicators continue to anticipate easing growth momentum in most major economies. By using data from the likes of order books, building permits and long-term interest rates, these leading indicators help anticipate trends and turning points in the economic cycle. Easing growth momentum remains the assessment in the US, Japan, Canada and the euro area as a whole. In France, the leading indicator continues to point to stable growth momentum. OECD area inflation picked up to 2.5% in

The OECD unemployment rate fell by 0.1 percentage point, to 5.2%, in April 2019. Across the OECD, 33.2 million people were unemployed. In the euro area, the unemployment rate declined in April by 0.1 percentage point for the second consecutive month to 7.6%. In the US, the unemployment rate decreased by 0.2 percentage point to 3.6%, 0.1 percentage point in Canada, to 5.7%

Country roundup

The Swedish economy is operating close to full capacity, with robust growth and strong employment, but uncertainties linked to the global economy shroud the outlook. www.oecd.org/sweden/ Portugal’s economic recovery is now well established, with GDP back to pre-crisis levels, a substantially lower unemployment rate and renewed investment and domestic consumption now joining a robust export sector to drive the economy. www.oecd.org/portugal/ Turkey will see its greenhouse gas emissions continue to rise unless concrete actions are taken to improve energy efficiency and increase the use of renewable energy sources. Turkey’s greenhouse gas emissions rose by 49% over 2005-16. www.oecd.org/turkey/ The government, business and workers in Italy will need to invest substantially more in training to prepare for the future world of work. Today only 20% of adults in Italy participate in job-related training, half the OECD average. www.oecd.org/italy/ The Slovak economy is experiencing a robust, broad-based expansion that is and Japan, to 2.4%. It increased by 0.3 percentage point in Korea, to 4.1% and was stable in Mexico at 3.5%.

Climate activist Anuna De Wever speaks at the annual OECD Forum, 20-21 May 2019. See page 72.

©OECD

Argentina’s economic recovery is expected to begin in 2019, but significant risks remain. Recovery from the crisis will require new efforts to restore confidence, build solid macroeconomic foundations, improve governance, create jobs and ensure that future growth is greener. www.oecd.org/argentina/

boosting living standards and promoting convergence with higher-income countries. Policies should now aim to sustain this expansion and prepare people for the future of work. www.oecd.org/slovakia/ Australia has made some progress replacing coal with natural gas and renewables in electricity generation yet remains one of the most carbonintensive OECD countries and one of the few where greenhouse gas emissions, excluding land use change and forestry, have risen in the past decade. www.oecd.org/australia/ The Hungarian economy is in the midst of a strong recovery, driven by high levels of employment that are boosting wages, consumer confidence and domestic demand. Policy should aim to prolong the economic expansion and ensurethat growth is greener. www.oecd.org/hungary/ Korea should adjust the categories and rules of its different labour migration programmes to better match labour migration to short-term and structural labour needs. www.oecd.org/korea/

Consumer prices, selected areas May 2019, % change on the same month of the previous year

International merchandise trade among G20 countries remained weak in the first quarter of 2019, with exports rising by 0.4% imports falling by 1.2%. Compared to the third quarter of 2018, G20 exports are down by 0.8% and imports by 2.7%.

% OECD total 6.0

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

0.0

All items

4.0

Food Energy

2.0

All non-food, non-energy items Apr. 2019

Other stories Forty-two countries adopted new OECD Principles on Artificial Intelligence designed to make AI robust, safe, fair and trustworthy. See page 14. Global outstanding debt in the form of corporate bonds issued by non-financial companies has hit record levels, reaching almost US$13 trillion at the end of 2018. See http://www.oecd.org/corporate/ Trade in counterfeit and pirated goods has risen steadily in the last few years– even as overall trade volumes stagnated– and now stands at 3.3% of global trade, according to a new report by the OECD and the EU’s Intellectual Property Office. See www.oecd.org/governance/ Social impact investment, which aims to improve well-being as well as earn a financial return, could be more effective if it were more clearly defined internationally with more measurable outcomes. Some 45 countries have adopted public instruments related to impact investing, and 20 have adopted a legal definition for social enterprises. See www.oecd.org/development

Plus ça change… The industrialised countries are becoming increasingly dependent on telecommunication networks, not only for telephony but also for interconnecting data-processing systems, the exchange of information and numerous other tasks in manufacturing and service industries, particularly banking and finance. These networks are, in effect, the distribution systems of the future. “ A framework for trade in telecommunications services”, by Dimitri Ypsilanti, in Issue No 163, April-May 1990

OECD Observer No 317-318 Q1-Q2 2019

BLOGS

BlogServer Eight steps education systems can take to integrate immigrant students Francesca Borgonovi, OECD Directorate for Education and Skills

Around 258 million people were living outside of their country of birth in 2017, with about half of these migrants residing in OECD countries. As diversity continues to increase, societies face the challenge of building inclusive societies to ensure prosperity and well-being for all. From OECD Education and Skills Today. More here: https://bit.ly/2WuzOUr

Tackling Employer-Supported Childcare: A journey from why to how Rudaba Zehra Nasir, Global Lead for Tackling Childcare and Women’s Employment, IFC Gender Secretariat

Alan Krueger, a friend and a source of inspiration for the OECD Laurence Boone, OECD Chief Economist, Giuseppe Nicoletti and Cyrille Schwellnus, OECD Economics Department

A great economist, Alan Krueger, left us and the OECD Economics Department has lost a friend and a source of inspiration. The OECD’s current research programme is testament to Alan’s continuing influence. His recent work was concerned with the rise of platform-intermediated work arrangements and analysed their effects on productivity and whether they warranted a rethink of labour market regulations and social protection. From OECD Ecoscope. More here: https://bit.ly/2Cz0s2r

Where is China headed? Five key insights from the 2019 OECD Economic Survey of China Margit Molnar and Patrick Lenain, OECD Economics Department

Although China’s economic growth has slowed, it is still very robust by international standards and contributes to worldwide economic expansion. Consumption is supported by steady employment growth and rising incomes. Households are spending increasingly on items such as e-commerce and shared services. However, continuing trade frictions are undermining exports, creating uncertainties, and small and medium-size enterprises are disproportionately affected. Further escalation of import tariffs would have an even more severe impact. From OECD Ecoscope. More here: https://bit.ly/31KvP4X

Shazia, a mother to a toddler, migrated to Dhaka to work at a garment factory. “When I visit my village, my son calls me ‘Aunty,’” she says, with tears in her eyes. Separated from his mother for long periods of time, the son barely knows her. I met Shazia last year at the factory where she works. She feels conflicted about leaving her son in her mother-in-law’s care. “Sometimes I think about quitting my job and going back to raise him myself.” Shazia is not alone. From OECD Development Matters. More here: https://bit.ly/31m3Ata

Why aren’t more girls choosing careers in science and engineering? Tarek Mostafa, OECD Directorate for Education and Skills

Rapid technological change–from digitalisation to artificial intelligence, 3D printing and nanomaterials–is transforming the way goods and services are produced and consumed. It will have profound implications for the dynamics of productivity, jobs, investment and trade over the next 10 to 15 years. From OECD Education and Skills Today. More here: https://bit.ly/2HBQqSe

How can teachers be more effective in diverse classrooms? Neda Forghani-Arani, University of Vienna, Department for Teacher Education

There is a growing body of research on classroom diversity, with much of it focusing on the challenges that diverse classrooms pose, and potential solutions. But comparatively little is known about how teachers teach in such settings, or the preparation they need to succeed. A new OECD working paper takes a closer look at teachers’ experiences in diverse classrooms–and the competences they need to teach effectively. From OECD Education and Skills Today. More here: https://bit.ly/2WrvBMv

How can business meet its responsibility to address climate change? Cristina Tébar Less, OECD Directorate for Financial and Enterprise Affairs

Only one hundred companies produce over 70% of greenhouse gas emissions so they should also be responsible for taking action to address the impacts of climate change. On the occasion of the 2019 Responsible Business and Human Rights Forum, OECD’s Cristina Tébar Less, looks at the actions business is expected to take. From OECD On the Level. More here: https://bit.ly/2KEj85w

These extracts from blogs appeared in Q1-Q2 2019 and courtesy of OECD Forum Network, OECD Insights, OECD Education & Skills Today, OECD Ecoscope, OECD On the Level, Wikigender, Wikiprogress and other content and social media platforms managed by the OECD.

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

FUTURE OF WORK

— What’s the future of your job? We need an effective system for lifelong learning, offering opportunities to the low-skilled, who are the most at risk from automation.

Angel Gurría, OECD Secretary-General

In some countries, part-time or temporary workers, or those with gig jobs or other forms of “non-standard” work, are 40-50% less likely to receive benefits when out of work than those who have a full-time, permanent job with one employer.

https://futureofwork.oecd.org/your-contributions

— What is your biggest hope for the future of work? That technology will leave no-one behind and enable people to stay socially and economically included for their whole life span, instead of creating new barriers to those who cannot keep up without support.

Philippe, Policy and Ep Liaison Officer, Belgium

Equal opportunities for employment. A future without gender pay gap. Working with positive outcomes for individuals and communities. The future of work and education together: matching needs and skills.

About 14% of jobs in OECD countries are highly automatable and another 32% will be radically transformed by technological progress.

Carmen, Teacher and Head of Vet Studies, Spain

FUTURE OF WORK

What citizens from around the world have to say These individuals from all walks of life told us about their hopes, concerns and thoughts on the world of work and how it’s changing. These stories illustrate how jobs are evolving and how work is perceived in different places and professions, across gender and generations. To explore their stories go to: https://futureofwork.oecd.org/portraits

Photos © Agence MYOP

Discover people’s hopes and concerns on the future of work

OECD Observer No 317-318 Q1-Q2 2019

SATOMI FULUYA FOUNDER OF AN ONLINE PLATFORM FOR FEMALE JOB SEEKERS JAPAN

My name is Satomi Fuluya, I am 31 years old. My company is located in Tokyo. We are building a platform to provide transparent, balanced reviews of the work conditions at companies for jobseekers, especially women. We also offer consulting service to companies who want to boost their brand image via their human resources practices.

WHAT I WANT FOR THE FUTURE OF WORK From a corporate perspective, I hope the future of work is flexibility for both companies and employees. To make everybody happy, ways of working should be more flexible.

More portraits and perspectives at https://futureofwork.oecd.org/portraits 10

Photos ©Stéphane Lagoutte/Agence MYOP

JASON SANGANA HIGH SCHOOL STUDENT FRANCE

I’m Jason. I’m 15. I live in Paris and I study in a Paris High School. I’m sociable, I really like talking with people, meeting new people, having fun. It’s hard for me to stay inside, I’d rather be out and about having a good time.

HOW CAN TECHNOLOGY SHAPE THE FUTURE OF WORK IN A POSITIVE WAY? I hope that work won’t change too much. I heard that 50% of jobs that exist today will disappear because of technology. And if it’s jobs that are fun or that are manual that will go… well, it won’t be as much fun when jobs are done only by machines as when we do them ourselves.

More portraits and perspectives at https://futureofwork.oecd.org/portraits

Photos ©Julien Daniel/Agence MYOP

OECD Observer No 317-318 Q1-Q2 2019

My name’s Gulin, I’m 28 years old and originally from Bayreuth but I’ve been living for the past ten years in Berlin. I’m a musician by profession but also do a great many other things. I’ve been a professional musician since 2014.

I hope that work will be uncomplicated in the future and that the State will provide greater support.

GÜLIN MANSUR PROFESSIONAL MUSICIAN

©France Keyser/Agence MYOP

GERMANY

My name is Tommy Leep, I live in the USA. I do business development for a start-up called Angelist, I’m also an investor in start-ups and I help people find work in start-ups. I studied economics for four years and sociology for a year. The combination of the two

TOMMY LEEP BUSINESS DEVELOPER, START-UP INVESTOR UNITED STATES

More portraits and perspectives at https://futureofwork.oecd.org/portraits 12

I hope the future of work will be a world in which people can wake up wherever they want to in the world, plug into projects or companies to do work that they’re capable and skilled at doing, earn enough income to be able to work not a crazy amount but maintain a very flexible lifestyle so that they can live life according to whatever their priorities are...

©Ed Alcock/Agence MYOP

is very relevant to what I do now.

OECD Employment Outlook 2019

Act now to build a future thAT WORKS for all #thefutureofwork

The future of work is now. Are we ready? Changes brought by new technologies and globalisation are rapidly reshaping how we work and live. There has been a lot of talk about the future of work, but now we must turn words into action.

— Key take-aways • Technology is reshaping how we work • Some tasks are being done by robots or offshored • Other new ones are being created

Without the right policies in place, people are being left behind Act now. We need a new agenda for the future of work

https://futureofwork.oecd.org/employment/outlook

Photos © Agence MYOP

OECD Observer No 317-318 Q1-Q2 2019

FUTURE OF WORK

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Going digital: Back to the future

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Andy Wyckoff, Director, and Joseph Loux, OECD Directorate for Science, Technology and Innovation

Two decades ago the OECD held its first international ministerial meeting on the digital economy. A lot has changed since then, but some old challenges persist while new ones have emerged. Food for thought as we embark on the next 20 years and prepare for the transformative effects of the digital economy. Do you remember the first thing you ever bought, or sold, online? As we have already been living in the digital economy for an entire generation, many of us would probably have to think back a long way. In fact, it was just over 20 years ago in Ottawa, on 7-9 October 1998, when the OECD together with the Canadian government held the first international ministerial meeting on electronic commerce, which was shorthand for what we now call the digital economy. It is worth revisiting as we embark on the OECD Summit on Going Digital, 11-12 March 2019. Electronic commerce was, of course, a radically new way of doing business

then, and it continues to evolve to this day. It was clear in 1998 that e-commerce would be potentially a major engine for economic growth and development around the world. But the rapidly growing digital marketplace needed some ground rules, which called for both a shared vision and a higher level of co-operation among all players–businesses, consumers, the technical community, policymakers, regulators, and more–an approach that has come to be labelled as “multistakeholder”. It is worth recalling that in 1998 Google was in its infancy and Facebook, YouTube and Twitter were still a long way off. Apple was near bankruptcy. Many mobile phones still sported visible antennas and the price of internet access was steep. The Ottawa Ministerial Meeting’s title was “A borderless world: Realising the potential of global electronic commerce”, which may sound a bit old-fashioned to us now. However, the issues on the agenda, including infrastructure, taxation, disruption, social impact and trust, have

come to frame the digital policy debates of today. And funnily enough we are again talking about e-commerce, with some 76 countries and regions agreeing in Davos in January to work on a WTO agenda for negotiations on new e-commerce rules for the 21st century. The word “borderless” was of the essence in that heady time of globalisation. New conventions and procedures became necessary, not only insofar as consumers could now buy goods and services across different jurisdictions, but also as existing policies and regulations applied to a much more traditional definition of commerce. Individual countries faced challenges in addressing these issues effectively on their own. The global reach of e-commerce called for both an international and a multistakeholder approach. Indeed, Ottawa broke new ground for the OECD as it was our first ministerial meeting where member countries invited international organisations, business, labour, and

OECD Observer No 317-318 Q1-Q2 2019

consumer and public interest groups to participate. An ambitious Ottawa agenda revolved around four main themes, which echo loudly today: building trust; ensuring effective protection and removing

Our policymaking institutions are facing important challenges with the rapid and, at times unpredictable, nature of the digital transformation unnecessary barriers; enhancing information infrastructure; and developing a clear understanding of social and economic impacts in order to maximise the benefits of a transition to a digital economy. It not only laid the groundwork for global multistakeholder co-operation, but helped set the stage for the further development of the information society. In addition, a global action plan for electronic commerce prepared by business with recommendations to governments was on the table, as well as a report on the role of international and regional bodies. The Ottawa meeting delivered concrete results. It gave rise to three ministerial declarations, which at their heart aimed to help foster consumer trust and protection in the uptake and continued use of e-commerce: • Declaration on the Protection of Privacy on Global Networks: Ministers called upon the OECD to provide practical guidance for the implementation of its 1980 OECD privacy guidelines in an online environment, based on national experiences. Updated in 2013, the privacy guidelines are still a popular resource today. • Declaration on Consumer Protection in the Context of Electronic Commerce: Digital literacy and encouraging the development of technology as a tool for protecting consumers are still at the heart of building trust in e-commerce to

this day. The OECD went on to produce its Guidelines for Consumer Protection in the context of Electronic Commerce in 1999, with an update in 2016. • Declaration on Authentication for Electronic Commerce: Ministers reaffirmed the objectives set forth in the OECD 1985 Declaration on Transborder Data Flows and its 1997 Recommendation on Guidelines for Cryptography Policy. An excellent 1999 article summarising the issues is still available online (although you will need to excuse a few broken URLs in the text). It makes for an interesting read today as we can reflect on how the issues have matured over the past 20 years and how many developments we saw coming, and how many we didn’t, including social media and the rise of data as a driver of innovation. But with every innovation, at least we had acquired experience in how to respond. The OECD has worked tirelessly on digital economy issues ever since those early days. This work reached a turning point with the Seoul Ministerial on the Future of the Internet Economy in 2008, just a year after the iPhone was first launched. This meeting “considered the social, economic and technological trends shaping the development of the internet and looked at its potential to evolve from a useful platform to an essential infrastructure for all economic and social sectors.” In other words, the digital economy was the economy. In the lead-up to Seoul, OECD Secretary-General Angel Gurría followed the new participative and social web trend by calling on “YouTubers” to contribute their thoughts on how they believed the internet could make the world a better place. Moreover, an interview in an OECD Observer special edition to the Seoul event even evoked the promise of a very new microblog called Twitter. In 2016, with digitalisation having permeated the world economy, the OECD Cancún Ministerial on the Digital Economy: Innovation, Growth and Social Prosperity

marked another pivotal point with the Cancún Ministerial Declaration and a focus on internet openness, digital trust, global connectivity, and jobs and skills. A generation has passed since electronic commerce broke through the traditional boundaries of government departments, national borders and industry sectors and called for truly cross-cutting solutions involving everyone. Now with the rapid and at times unpredictable nature of the digital transformation, it is very apparent that our institutions for policymaking are facing important challenges. The OECD Going Digital project is redefining how we think about digital policy and delivering a new policy framework, including a new toolkit, to help governments and citizens harness the promise of digital technologies for growth and well-being, and reduce any risks too. Our Going Digital Summit in March 2019 marks another milestone in this remarkable journey of digital transformation. Here’s to the next 20 years. References and further reading OECD Going Digital project at www.oecd.org/going-digital OECD Going Digital Toolkit at www.oecd.org/going-digitaltoolkit OECD (2019), Going Digital: Shaping Policies, Improving Lives, OECD Publishing, Paris, https://doi.org/10.1787/9789264312012-en OECD (2019), Measuring the Digital Transformation: A Roadmap for the Future, OECD Publishing, Paris, https://doi.org/10.1787/9789264311992-en OECD (2019), “Trade in the Digital Era”, OECD Going Digital Policy Note, OECD, Paris, http://www.oecd.org/ going-digital/trade-in-the-digital-era.pdf OECD (2019), “Unlocking the potential of e-commerce”, OECD Going Digital Policy Note, OECD, Paris, www.oecd.org/going-digital/unlocking-the-potential-of-ecommerce.pdf Ottawa conference proceedings | Conclusions and Ministerial Declarations, available at www.oecd.org The Internet Economy on the Rise: Progress since the Seoul Declaration, see www.oecd.org/internet/ internet-economy-on-the-rise.htm “Internet time” in OECD Observer No 268 June 2008, see https://oe.cd/1iX Wyckoff, Andy (2016), “Digital economy: Why a brighter future could be in our pocket”, in OECD Observer Yearbook, https://oe.cd/obs/2sy; see also: http://oecdobserver.org/digitaleconomy2016 Ypsilanti, Dimitri (1999), “A borderless world: the OECD Ottawa Ministerial Conference”, at www.emeraldinsight.com Share article at https://oe.cd/obs/2Ce

DIGITAL

Science and AI: Don’t forget the human factor… Anne-Lise Prigent, OECD Observer

would be far easier and less expensive to build such greener trains.

©PLANET Pix/ZUMA-REA

But are room-temperature superconductors a realistic prospect? One promising area to explore is a relatively new material called magic-angle graphene, which some people dub the “magic superconductor.” Graphene is a purely carbon-based material, which was discovered by chance as recently as 2004. It is the thinnest material known, is light, flexible and stronger than steel. And it is an even better conductor of electricity than copper.

Ultra-light graphene aerogel resting on a flower at Zhejiang University, China Ever heard of “magic-angle” graphene? This is a next generation material and newly-found superconductor that could revolutionise energy efficiency, and much more. It could help us address climate change. AI could play a key role in this. But real scientists are needed too… “Chance benefits only the prepared mind” said French scientist Louis Pasteur. Pasteurisation was an unexpected discovery, the realisation that passing air (that is, oxygen) could actually stop the fermentation process. Such discoveries have prevented diseases and saved lives. In short, basic research and chance findings go hand in hand. Take the example of superconductors. An Oxford student, Thomas Hornigold, described them as one of “the most bizarre and exciting materials yet discovered.” Bizarre but not uncommon. Already superconductors conduct electricity with zero resistance, meaning no power loss. This makes them very energy efficient. But there’s a catch: conventional superconductors need to be cooled below a certain temperature (about -270°C) to work. And this requires a lot of energy. Moreover, they are cooled with liquid helium, which is expensive, nonrenewable and scarce (in fact, it’s running out). This seriously limits the large-scale

use of superconductors and the benefits we could draw from them. The ideal, and so far elusive, scenario would be for superconductors not to need cooling by working at room temperature. Room-temperature superconductors would greatly improve our chances of avoiding irreversible global warming In fact, room-temperature superconductors would completely transform the way energy is stored, distributed and used on our planet. As Hugh Cartwright, from Oxford University’s Physical and Theoretical Chemistry Laboratory points out: “this would greatly improve our chances of avoiding irreversible global warming. It would revolutionise areas such as medicine and industry.” With room-temperature superconductors, we could reach 100% renewable power, for instance. We could also eliminate power loss in energy transmission lines, and do a better job of closing inefficient power lines. Superconductors can also help save helium, in hospital MRI units for instance. Other goals include transport (more efficient engines and so on) by making it greener and safer too. The world’s fastest trains already use superconductors thanks to “maglev” (magnetic levitation), which lifts them above their tracks. With room-temperature superconductors, it

And there is more… In 2018, physicists at MIT, led by Pablo Jarillo-Herrero, and Harvard University discovered that graphene has two extreme properties: it can be both an insulator and a superconductor. When two layers of graphene are sandwiched together, and then one is rotated by a “magic angle” (about 1.1 degrees), graphene becomes a superconductor unlike any other. “One reason for the intense interest in twisted graphene is the stark similarities between its behaviour and that of unconventional superconductors. In many of these, electric current runs without resistance at temperatures well above what the conventional theory of superconductivity generally allows. But quite how that happens remains a mystery.”, writes Elizabeth Gibney. Graphene is still a mystery. The very discovery of magic-angle graphene itself was completely unexpected. It happened almost by accident, but not quite; by accident and sagacity, as can be the case with basic research. Scientists were simply “trying to see how graphene would react when placed at different angles”, Colm Gorey explains. This is not something a computer could have done. Scientists show creative insight whereas computers, do not (at least not yet) notes Cartwright. Although computers are becoming ubiquitous in science, he points out, “they are helpless at suddenly saying: “Gosh I’ve had a really cunning thought!” They just don’t do that.” More work is needed to see just how “magic” graphene really is, and this is where, many believe, artificial intelligence

OECD Observer No 317-318 Q1-Q2 2019

DIGITAL

can step in. As Mr Cartwright stresses, we simply do not have the brain power to understand some of the more complex problems we need to solve. “Along with large materials databases, AI tools that can learn from recent discoveries such as “magic-angle” graphene superconductors are needed”, he says.

European, Vol. 1 Issue 4, https://www.scientificeuropean. co.uk/graphene-a-giant-leap-towards-room-temperaturesuperconductors

For this to happen, AI will need much more data–and relevant data at that. In typical machine learning problems, data is fed into the machine-learning system with the hope that the AI will learn from the data. Once that is done, the AI can spot correlations, make predictions about or identify data it has never seen before.

Dumé, Belle (2018), “Magic-angle graphene” behaves like a high-temperature superconductor, Physics World, https://physicsworld.com/a/magic-angle-graphenebehaves-like-a-high-temperature-superconductor/

Not just lost in translation Models developed from machine learning are predictive, but they are not necessarily (or even usually) interpretable, Mr Cartwright points out. We need AI “linkage” tools that help us do that. We need translation tools, explains Cartwright: when an AI has deduced something that is not related to any existing scientific models (yes, this may happen), scientists will need a “translated” version they can understand. In short, human competencies and insights are needed for AI to work properly. As computers become more and more integral to science, scientists see more and more of their responsibilities being taken over. This could have consequences. “If computers push people out of science and other domains, creativity, which is an important dimension of human life, will go to waste.” Mr Cartwright warns. Worse, it could cause science to slow down, he argues. Clearly, scientists have a key role to play in working with AI. As Pasteur said, “Chance benefits only the prepared mind.” And it will also benefit those who harness the power of AI, one prediction at a time. References and further reading This article builds on a presentation made by Hugh Cartwright at the OECD-Oslo Met University Workshop on digital technology for science and innovation: https://www.ccnorway.no/oecdoslomet/ Scientific European (2018), Graphene: A Giant Leap Towards room Temperature Superconductors, Scientific

Gibney, Elizabeth (2019), How “magic angle” graphene is stirring up physics, Nature 565, 15-18, https://www.nature.com/articles/d41586-018-07848-2 Butler, Keith T. et al. (2018), Machine learning for molecular and materials science, Nature 559, 547–555, https:// www.nature.com/articles/s41586-018-0337-2

Tantillo, Ariana (2016), Room-temp superconductors could be possible, phys.org, https://phys.org/ news/2016-09-room-temp-superconductors.html

Gibney, Elizabeth (2018), Surprise graphene discovery could unlock secrets of superconductivity, Nature 555, 151-152, https://www.nature.com/articles/d41586-01802773-w Gorey, Colm (2018), When twisted into “magic angle”, graphene becomes a superconductor, Siliconrepublic, https://www.siliconrepublic.com/machines/magic-anglegraphene-superconductor Hornigold, Thomas (2018), Why the discovery of room-temperature superconductors would unleash amazing technologies, SingularityHub, https://singularityhub.com/2018/05/13/the-search-forhigh-temperature-superconductors/#sm.000tqkx2xgtuf5 z11fg2euhh2h3ai Share this article at https://oe.cd/obs/2Da

What are the OECD Principles on AI? Artificial intelligence is still in its early days and policymakers are still finding their feet. To what extent can they, and should they, encourage this powerful new technology, and how can they address any risks? The OECD Principles on AI can help. They promote artificial intelligence (AI) that is innovative and trustworthy and that respects human rights and democratic values. They were adopted by OECD member countries when they approved the OECD Council Recommendation on Artificial Intelligence on 22 May 2019. As well as OECD member countries, Argentina, Brazil, Colombia, Costa Rica, Peru and Romania have also adhered to the AI Principles. On 9 June 2019, the G20 adopted human-centred AI Principles that draw from the OECD AI Principles. The five OECD AI Principles The council recommendation identifies five complementary values-based principles for the responsible stewardship of trustworthy AI: 1. AI should benefit people and the planet by driving inclusive growth, sustainable development and well-being. 2. AI systems should be designed in a way that respects the rule of law, human rights, democratic values and diversity, and they should include appropriate safeguards–for example, enabling human intervention where necessary–to ensure a fair and just society. 3. There should be transparency and responsible disclosure around AI systems to ensure that people understand AI-based outcomes and can challenge them. 4. AI systems must function in a robust, secure and

safe way throughout their life cycles and potential risks should be continually assessed and managed. 5. Organisations and individuals developing, deploying or operating AI systems should be held accountable for their proper functioning in line with the above principles. What can governments do? Consistent with these value-based principles, the OECD also provides five recommendations to governments: 1. Facilitate public and private investment in research & development to spur innovation in trustworthy AI. 2. Foster accessible AI ecosystems with digital infrastructure and technologies and mechanisms to share data and knowledge. 3. Ensure a policy environment that will open the way to deployment of trustworthy AI systems. 4. Empower people with the skills for AI and support workers for a fair transition. 5. Co-operate across borders and sectors to progress on responsible stewardship of trustworthy AI. What’s next? A future AI Policy Observatory will provide evidence and guidance on AI metrics, policies and practices to help implement the principles, and constitute a hub to facilitate dialogue and share best practices on AI policies. For more on AI see https://www.oecd.org/going-digital/ai/ See the Recommendation here: https://legalinstruments.oecd.org/en/instruments/ OECD-LEGAL-0449

DIGITAL

Special on the occasion of the OECD Going Digital Summit, 11-12 March 2019

i-Sheet browse on paper, read online

#GoingDigital www.oecdobserver.org/goingdigital

Going digital Read, watch and listen to our selected content in our OECD Observer i-Sheet by using the SnapPress Augmented Reality app (recommended, just follow the simple instructions on this page), or just use the friendly URLs to go to our web platforms.

Read, watch, listen in Augmented Reality

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Going digital

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Scan with free SnapPress App for Augmented Reality

Fighting corruption one YouTube video at a time

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Are platform workers really their own boss? Clara Young, OECD Observer

Smart communications technology has enabled people to hire themselves out as independently contracting workers. But what is the status of these workers, and what are the challenges of the so-called gig economy?

Balázs Gyimesi, OECD Observer

The Greece-OECD campaign demonstrated the real potential of civic engagement and highlighted the bright side of social media. Konilo, one of Greece’s most popular vloggers (right), interviewing young Athenians on Ermou Street.

Read https://oe.cd/obs/2w6

Read https://oe.cd/obs/2w4 AI and digitalisation for workforce training and assistance

OECD moves forward on developing guidelines for artificial intelligence

Gregorio Ameyugo, Deputy Director, LIST institute, CEA

Wonki Min, Vice Minister, Korean Ministry of Science and ICT, and Chair of the OECD Committee on Digital Economy Policy

Read https://oe.cd/2wt AI: Getting the plumbing right

Read https://oe.cd/2wq

Pam Dixon, Executive Director, World Privacy Forum g

Digital Planet: How smart technologies can help us solve our climate and infrastructure challenges

Read https://oe.cd/obs/2wL

Zoe Lagarde, OECD Environment Directorate

Join the Forum Network here: www.oecd-forum.org

Read https://oe.cd/obs/2Df VIDEO

Going Digital: OECD’s Andrew Wyckoff on the digital transformation

Does technology increase productivity? The brave new world of artificial intelligence Watch https://bit.ly/2SN8een

Watch https://bit.ly/2UmUIiX

DATABANK

Total online alternative finance market volumes By region, in US$ billion

The funding crowd With bank lending declining, smaller businesses are looking for alternative ways of financing. Thanks to the world wide web, they can now solicit funds not just from banks and professional investors, but from virtually anyone with internet access.

Read https://oe.cd/obs/2wo

Watch https://bit.ly/2VwGo7U

2013

2014

2015

2016

120

234

35 30 25 20 15 10 5 0

Europe UK US Note: The data on Europe includes all EU 28 countries except for Luxembourg and the UK

China

Source: OECD (2018). Financing SMEs and Entrepreneurs 2018: An OECD Scoreboard

OECD Observer No 317-318 Q1-Q2 2019

The platform economy can deliver for its workers too Stijn Broecke and Sandrine Cazes, OECD Directorate for Employment, Labour and Social Affairs

regulations and collective bargaining have long been based on the idea that people have a stable, full-time job as a full-time employee working on an open-ended contract for a single employer. But nowadays, many gig workers are not formally employees of the firm, but are considered self-employed. Rather than go to work and get paid a wage, they “sell” their services to the platform company. This status also means they may not be covered by the standard rights and protections which employees have. Protections against unfair dismissal, support of minimum pay, or access to unemployment benefits and pensions, simply do not apply to many platform workers. Nor do they have the right to organise and bargain collectively. Some platform workers might not need these protections: they are successful, have many clients and have a strong ability to set their rates of pay as well as their working conditions. Others, however, might may be less well set up. They might, for example, be dependent on one single client or platform, which makes them vulnerable–particularly if they have few alternative job options, which reduces their bargaining power.

“A day in the life of Shirley, platform driver”, watch the video at https://oe.cd/obs/2E9, part of our I am the Future of Work campaign, https://futureofwork.oecd.org Have you ever used your smartphone to hail a taxi? Order in lunch? Or to find the help you need, whether from a cleaner or a childminder? If you have, then like millions of people, you probably did so via digital platforms. Every day people are connecting online, whether to use or provide myriad services. These digital platforms have made life easier for consumers everywhere, by improving the quality, cost and accessibility of services. But as well as being digital, these platforms also depend on labour. They have opened up new work opportunities for millions of people. Some people use them as a main job, others to earn additional income. Others like the flexibility that they offer to fit work around other responsibilities and find a better work-life balance for themselves. However, while online platforms have created new lines of work and lowered barriers to employment, the quality of some of these new forms of work has drawn the attention of policymakers. Indeed, a closer look shows that behind these positive aspects lurks a somewhat darker reality, with poor and precarious working conditions for some workers. This could mean putting in long hours to make work pay, or remaining constantly on call, with unpredictable income and work schedules. And, as technology has reshaped how people find and do their work, social and labour market protection have had not always kept up. In many countries, social benefits, employment

Whether all platform workers really are self-employed or employed by the platforms they work for has become a heated legal question in several countries. In some cases, workers might even be falsely self-employed. Their employer (or the platform) might have chosen self-employment over a standard employeremployee working arrangement in order to avoid taxes and regulations. In most OECD countries, existing labour law provides the means to deal with cases like this, so that such workers can be re-classified and therefore have access to the rights and protections to which they are entitled as employees. In practice, correcting misclassification may need additional action, such as reducing any tax incentives, or making it easier for workers to challenge their status legally. Also, policymakers could toughen penalties for mis-classification and strengthen the labour inspectorate’s capacity to detect breaches. Some workers, however, will remain genuinely difficult to classify. In fact, while there have been a few headline-grabbing legal breakthroughs, court cases around the employment status of platform workers have generally resulted in mixed outcomes, which proves the difficulty of classification. While some of these workers have features in common with self-employed workers, they also share some characteristics and therefore vulnerabilities of employees. This calls for new thinking about ways of extending rights and protections to these workers.

Read the rest of this 1,000 word article at http://oecdobserver.org or at https://oe.cd/obs/2E6 Read also, OECD (2019), OECD Employment Outlook 2019: The Future of Work, OECD Publishing, Paris, https://doi.org/10.1787/9ee00155-en. See page 13. https://oe.cd/obs/2E6 http://oecdobserver.org/news/fullstory.php/aid/6223/The_platform_economy_can_deliver_ for_its_workers_too.html

Who we are •Korea's only independent economic think-tank •Devoted to the principles of free markets, free competition, free enterprise

What we do •In-depth research on corporate policies •Analysis of macroeconomic policies •Promotion of free markets •Education for market capitalism

OECD Observer No 317-318 Q1-Q2 2019

SOCIETY

Notre Dame de Paris: The wounded soul Tahar Ben Jelloun* cathedral is more than that, it is the identity of this Paris which belongs to no one–yet belongs to all those who love the city. It is hard to imagine this island in the city’s heart without that majestic, grandiose presence. A piece of French history was taken by the flames last night. France has lost a few pages in its long story. Pages which we will never be able to read again. And here the cultural tragedy gives way to grief. We can, of course, read or reread Hugo, which will remind us of a simple truth–the power of literature. This monument was saved by a novel. When Notre-Dame de Paris was published in 1831, it sounded the alarm. The building was in an “unacceptable” state of dilapidation. Victor Hugo’s novel spread its fame far and wide, leading eventually to its restoration, from 1844 to 1864. The architect Viollet-le-Duc took the opportunity to resurrect its spire–a distant twin, separated by centuries from its sister, built around 1250 and brought down by revolutionaries between 1786 and 1792. Yes, the cathedral will be rebuilt. It will take time, but as we pass that time we must keep its spirit alive within us, held safe against the noise and the dust. It is its presence–a lofty, delicate spirituality–that will restore Notre Dame de Paris to its identity: our identity, because it is open to all and belongs to the memory of the world.

©Laurent Grandguillot/REA

I grew up in Morocco, where the co-existence of Muslims, Jews and Christians was quite normal. At the time, in the 1960s, we were taught the history of religion without any prejudice. We were told that Islam was inspired by the values of the other two monotheistic religions and that we must not only respect them, but encourage mixing and dialogue. The fire at Notre Dame in April 2019 struck at the soul of Paris, at the spirit and memory of Christianity and of the world itself. I learnt French reading Victor Hugo, who immortalised this most transcendent of cathedrals. I became infused with the spirituality of this space and, as I read Hugo’s words, learnt how to know and see it as part of my education, my French culture, which is both juxtaposed and complementary to my Arab roots. At Notre Dame this week, I saw how fire is insatiable, stubborn against all appeasement. I saw faces distraught as a wave of emotion engulfed the world. Such is the power of the spirit of this place, which attracts more visitors than any other in Europe. And I am sad because I know that this cathedral forms part of my universe as a writer. Islam has always enjoined its followers to respect and celebrate these cathedrals, which are havens of peace and reconciliation. Muslims visiting Notre Dame in Paris see it as a pilgrimage site where we pray to the same god, unique and merciful. But this

This is the spirit King Mohamed VI wanted to remind people of last month when Pope Francis was welcomed to Morocco and the two leaders listened to Muslim, Jewish and Christian songs as people came together in a beautiful spirit of friendship. Notre Dame de Paris lost a part of itself to this pitiless fire. This morning, scarred, ravaged, gutted, she stands tall. Her spirit lives. But it will be many long years before the cathedral regains what she lost in just a few hours. There remains her memory, her façade, her magnificent doors, her history and all the books she has inspired. Beyond religion, our task will be to restore her beauty, perhaps by devising new ways to conjure the sublime. Our scorched cathedral will be saved, because the people of France and the rest of the world will unite to return to her what the fire has taken away. *Tahar Ben Jelloun is a Franco-Moroccan novelist, essayist, poet and painter. Winner of the Goncourt prize for his novel La Nuit sacrée (1987), he is one of the most translated francophone writers in the world.

SOCIETY OECD Observer Roundtable

As part of an OECD Observer Roundtable we invited a range of representatives, speakers of the OECD Conference on Culture and Local Development (Venice, Italy, 6-7 December 2018), to answer the following question: What government policies would you encourage most to ensure that cultural initiatives can promote economic development, social inclusion and well-being in our cities and regions?

Policies can unleash the transformative power of culture for cities and regions Lamia Kamal-Chaoui, Director, OECD Centre for Entrepreneurship, SMEs, Regions and Cities

and subnational level–will help inform better policy efforts.

Culture is contributing to many other areas of the economy such as tourism or even manufacturing. A recent study of London found that one third of all creative jobs are in sectors that one would not traditionally classify as creative. Creative skills are also durable skills–they are less vulnerable to automation.

The value of culture and creativity goes far beyond a share of GDP or a number of jobs. Recent OECD work on the role of museums in local development highlights the wide-ranging local impacts that cultural institutions can play. This work is just the tip of the iceberg, and we need to uncover the rest.

Creative skills are in hot demand, and not only in sectors labelled as creative.

Visit www.oecd.org/cfe/leed/

Promote partnerships to further innovation Nathalie Bondil, C.M., C.Q., Director General and Chief Curator, Montreal Museum of Fine Arts, Canada

Our business support infrastructure also needs to be adapted, especially for SMEs. The needs of creative industries and creative entrepreneurs are not always the same as for other firms. The nature of the sector as well as the skills needs pose additional challenges for policy to address in business development and regulatory frameworks. Ensuring that cultural jobs are quality jobs is also important for social inclusion. Many in the sector are self-employed, in informal jobs or engaged in cultural jobs as secondary employment. Policy efforts should also seek to get more out of our public and private investment in culture. Understanding the particular financing issues in the sector–at national

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To help build the evidence base, we need more, better and internationally comparable data. The OECD has many unique international databases, including at the scale of regions and cities. It also has a wider set of indicators on wellbeing. More indicators as well as analysis on the link between cultural participation, well-being and inclusive growth can better inform our policies. Culture and creative industries offer an opportunity to improve economic performance, social inclusion and well-being, an opportunity we need to use more. Nowhere is this more tangible than at the local level. Local leaders and cultural institutions can be agents of change, harnessing the transformative power of culture for a wide range of purposes. Overall, estimate shows that 4-7% of GDP in EU countries is in culture and creative sectors. Numerous creative goods are exported and are important for trade. This data only scratches the surface. Many people are engaged in cultural work that is unpaid and not recorded.

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OECD Observer Roundtable on culture and local development

A dynamic cultural sector provides support for a creative economy, which in turn benefits the community in a number of ways. Culture cannot be confined to a

OECD Observer No 317-318 Q1-Q2 2019

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An independent non-political cultural agency as catalyst of innovation and inclusion

single ministry or department, since it has to meet the requirements of a number of mandates (education, family, immigration, health, the economy, infrastructure, tourism). In the 21st century, culture–and its Siamese twin, education–will play a major role in our learning to live together within our global village.

Here’s an example. In northern climes, our cultural offerings have to remain accessible, regardless of the weather. Why don’t we develop a tourist clientele by partnering with cultural, travel, transportation and hotel endeavours with a view to making a combined offering that will broaden all our markets to everyone’s advantage? Visit www.mbam.qc.ca/en/

The head of the agency should be a cabinet-level position with the governing body and serve the mission of the organisation, not the political party in office. It is essential to keep the arts and cultural delivery system separate from politics. A cabinet level position will help facilitate a cross-divisional approach to cultural policy in the local jurisdiction. Think of arts and culture as both drivers of economic prosperity and equity, as well as catalysts for innovation, optimism and civic pride. Local ministries that take this approach foster greater collaboration among city leadership and deploy the arts in service of the other critical issues facing a city.

Local governments should create cultural policies ensuring equitable public access to arts and cultural amenities reflective of the population. The design of a comprehensive policy framework is essential to fostering belonging and generating economic activity.

Visit www.culturela.org

Take stock for successful partnerships Wanjiru Koinange, Co-Founder, Book Bunk

One way to accomplish this goal is to designate a portion of the city’s hotel tax to fund arts and cultural experiences. This funding should be designated to a city department outside the political realm. Systems of distribution should be created with a distinct focus on cultural equity and inclusion, and may take the form of direct commissions, civic festivals or grant-making. As an independent, the department or agency would be aligned with a clear mission and work that it must execute in accordance with the local ministry’s financial policies. This check and balance would ensure the agency is responsible for putting forward clear criteria for decision making. For example, at the City of Los Angeles Department of Cultural Affairs, we award over $3 million in competitive grants annually to non-governmental organisations through an “excellence, access, and equity rubric.”

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Let’s invent programmes founded on evolving co-creation. With a many-sided partnership strategy like this, we can work in co-development, rather than competition, with institutions involved in the same area of endeavour. Let’s stimulate inventive experimentation, work in progress, and a kind of serendipity. Let’s create made-to-measure projects with community organisations and reference persons, whether experts or volunteers. Let’s act together to combat the ills of our society: the handicaps, racism, homophobia, illiteracy, dropping-out, poverty, homelessness, intimidation, violence, radicalisation, isolation, old age and exclusion. The list goes on…

Danielle Brazell, General Manager, City of Los Angeles Department of Cultural Affairs

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In this regard, funding agencies should in my opinion support partnership projects, rather than individual, singlefocus institutions. Furthermore, funding agencies could adjust their support to match the number of partners involved in the design and execution of a project. For us, catalysing cultural, social-community and economic players, involving local driving forces (associations, schools, businesses, artisans, clinics and retirement homes) and generating interdisciplinarity are what constitute a culture that we describe as “co-creative.”

Cities and local ministries might consider launching a “Cultural Treasure” initiative to serve as an official honour and recognition of the city’s local culture.

You will be hard pressed to find a community that is not consistently engaging with some kind of arts and culture based industry–whether or not the policies and frameworks for the industry exists. This is especially true of Kenya. The arts and culture industry is probably one of the most malleable ones there is. Stakeholders have got to be resilient shapeshifters in order to

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adjust to funding challenges, transient audiences, as well as the dynamic nature of culture itself! But still, our cities are filled with creative outputs. We would encourage governments to explore policies that foster partnerships with cultural organisations and firms that are already working to build and sustain these creative economies.

This “stick to your lane” approach ensures that cultural initiatives have a solid chance at economic sustainability. Such partnerships will provide the creative economies with access and capacity needed to scale the delivery of arts-based programmes. Twitter: @theBookBunk Visit www.bookbunk.org

Sensible tax, careful planning, education and good management all matter Geoff Mulgan, CEO, Nesta For several decades governments–and cities–have used culture as a tool for

Creative economies tend to be highly concentrated in a few inner urban locations, driving up land values. Good policy regimes would tax windfall gains accruing to landowners and recycle them back into the underlying sources of creativity, from schools to small business. There are many smallscale tools for doing this, but no OECD country does so systematically yet.

Geoff Mulgan economic development. My first job was drafting a cultural industries strategy for London in the mid-1980s; in the early 1990s I was part of a network of creative cities across Europe and North America. The early strategies were led by buildings: iconic ones like the Bilbao Guggenheim, and broader programmes that rebuilt whole inner urban districts. Many succeeded–especially when they tied up culture, tourism and entertainment–riding a wave that has seen creative industries grow in absolute and relative terms. But many failed, and even the successful ones often widened inequalities, because creative economies are highly concentrated. So what can be done to help achieve both growth and inclusion? A key is to shift from primarily building-based programmes to broader based ones. These need to include education, and giving space for creativity and digital making, as well as highly specialist skills in schools and universities–with the latter for example promoting combinations of creative, technical and project management. Favourable tax treatment helps (though can overshoot); so can careful planning, for instance, to ensure cultural districts don’t lose their spirit as property prices rise. At Nesta we have also demonstrated new public funding models beyond classic grant subsidy: using R&D methods to promote experimentation on the boundaries of art and technology;

Visit www.nesta.org.uk

Culture in school should have parity of esteem with STEM Caroline Norbury, MBE, Chief Executive, Creative England

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For this partnership to occur, our local government had to audit its ability to deliver the vision that Nairobi residents have for these libraries. This kind of taking stock is crucial for governments at all levels, because what it will reveal is that there are indeed citizens who are dreaming and imagining future cities that are inclusive, functional, bursting with cultural heritage and therefore steeped in identity.

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Book Bunk is a young Kenyan social impact firm, founded by two cultural practitioners–a writer and a publisher– both residents of Nairobi. In March 2018 Book Bunk partnered with the Nairobi County Government to deliver the restoration of three public libraries and the transformation of these spaces into centres of learning, artistic showcase and community. Book Bunk’s model uses art to engage with current and future users of these libraries–themselves pillars of cultural heritage–and gather information about the needs residents want these libraries to meet.

using impact investment models in the space between subsidy and commercial activity; and to guide policy, using better measurement and mapping to make new phenomena visible to decision makers, as we recently did for the immersive economy in the UK. Everywhere network curation and management should matter more than physical development, but is usually under-supported.

Culture and creativity help us meet the challenges of the future and drive both economic growth and social inclusion. Building culture and supporting the talent that creates ideas, products, services and experiences must therefore be at the heart of policymaking. My personal perspective would be to start by giving the arts parity of esteem

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The world needs more engineers, coders, technologists and data scientists, but it also needs more artists. Arts budgets in schools are increasingly seen as marginal, nice to do, rather than essential core components of the curriculum. Moreover, universities are seeing a decrease in applications for liberal and fine arts as students see science as the “new sexy” route to a highly paid career. So, I would subsidise the fees of arts students. On average they will earn less than many other graduates, but without them we would all be poorer and less inventive and innovative. I would create early-stage proof-ofconcept funds for artists, creators, producers and makers; awarded not only by esteemed institutions, but by the power of the crowd. Arts-funding is too often the result of historical precedent rather than contemporary relevance. I am not advocating for the abolition of cultural tastemakers, curators and investors, but rather for a re-balancing and recognition of the role of the audience and consumerdemand in defining its own needs. My plea would be for policymakers to think strategically about the forces of disruption and innovation, and to use culture and creativity as a means of moving away from government departmental silos towards systemsbased approaches, which are transparent and engage with the public. Such an approach unlocks creativity; encourages collaboration and diversity, and builds future resilience for us all. Visit http://www.creativeengland.co.uk/

Some 70 case studies to inspire local initiatives

the relevant business interests and representatives of civil society.

Walter Zampieri, Head of Unit for Cultural Policy, Directorate-General for Education, Youth, Sport and Culture, European Commission

Local authorities should be bold in entrusting the culture and creative sectors to champion initiatives across cities and rural areas alike. Public funding should work as an incentive to research and innovation in arts and culture, and test new solutions, for example in mixing arts, science and digital innovation. Local authorities should set up networking opportunities that facilitate the exchange of information, knowledge and ideas between various actors, entities and disciplines. Dedicated places are also key for people to work on joint projects, collaborate and share equipment: this means promoting co-working spaces, creative hubs, innovative cultural infrastructures and spaces, clusters and incubators.

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with science, technology, engineering and mathematics (so-called STEM subjects) in the school curriculum. Innovation and growth are frequently the result of collaboration and interdisciplinary connections and approaches. Policies that recognise this will create the intellectual property and added value that is crucial to future prosperity.

Nowadays cultural policy is no longer only about the management of the arts. Instead, culture offers new approaches for tackling social problems. The European Commission has accumulated a wealth of experience in working with cities and regions in culture-led development, thanks to the Investment and Structural Funds, the European Capitals of Culture, and many dedicated projects. The recently published New European Agenda for Culture presents a vision of cities and regions as “living laboratories” with a huge capacity for experimentation, anticipating trends, and exploring models of social and economic innovation. There is clearly no one-size-fits-all strategy, because every place has cultural resources. These resources make a place unique, in terms of attractiveness and identity. Culture-driven territorial development is therefore very much about understanding and managing these resources in order to make the most of them. This also means that culture-based development has relevance for cities and regions at all stages of development. What is needed is a strategic, long-term, approach built on partnerships between public authorities, cultural organisations,

For inspiration, we have collected 70 selected practices through a project dedicated to culture for cities and regions. The practices relate to: cultural heritage as a driver of economic growth and social inclusion; culture and creative industries as a motor for urban regeneration and economic vitality; and culture for social inclusion, social innovation and intercultural dialogue. Visit https://ec.europa.eu/info/departments/educationyouth-sport-and-culture_en For case studies and more detail, visit Culture for Cities and Regions at www.cultureforcitiesandregions.eu

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Improving flood risk management: A proposal for Louisiana

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Isidoro Campioni-Noack, Alba Medina Bermejo, Jan-Dorus Sleutels, Cathy de Jongh, Lea Müller and Océane Girault, International Studies, Faculty of Humanities, Leiden University, The Netherlands

What to do? A woman stands on the porch of a flooded home in Sorrento, Louisiana, 17 August 2016. Flood management in coastal areas is becoming a major challenge of our times, not least because of climate change. With floods turning into a structural problem for many littoral communities, there is an urgent need to build flood resilience in vulnerable areas. This study, prepared as part of the OECD’s New Approaches to Economic Challenges (NAEC) initiative, shows a way forward. In 2016, the state of Louisiana experienced one of the worst floods in US history that led to economic losses of over US$8 billion, largely arising from loss of economic activity and property damage. It was the latest in a series of floods to hit the US state. Already in 2012, for instance, there was Hurricane Isaac, which was not the most powerful of storms, yet caused a number of fatalities and damage estimated at over US$3 billion. Unlike many other major floods, the 2016 flood was not caused by a hurricane, but by unusually warm air colliding with a slow moving storm system. The state was

hit by more flooding in 2018, and there is no reason to think Louisiana will not continue to be exposed to deadly floods from hurricanes and cyclones in the future. Moreover, the cost of damages is expected to rise; a 2016 study from RAND Corporation suggests costs could even increase tenfold in the next 50 years. As could be expected, the state government has been actively confronting the issue, for example with the 2012 and 2017 Coastal Master Plans (RAND Report 2016, see references). However, most efforts taken towards protecting and mitigating flood risk have been solely on a technical and structural level, such as the elevation of residential properties above waterlines. While these solutions undoubtedly bring short-term relief, their long-term resilience is uncertain. What is missing are the social and political aspects of floods, without which technical solutions can only go so far. Our consultancy report, The Threefold Approach to the Development of Flood Resilience, which we researched for the OECD as a

contribution to their New Approaches to Economic Challenges initiative, spells out how a stronger and integrated approach could be established. The technical aspect of flood management of course remains crucial to flood resilience, and approaches have greatly evolved in recent decades, including approaches that harness the environment. An important new development in flood defence policy is a shift from “hard” defence measures to “soft” ones. Hard measures include traditional approaches such as raising defensive levees and increasing sewage pump capacity, whereas soft defence measures seek to use nature itself to reduce the consequences of floods. Soil and vegetation found in wetlands, dunes and marshes, for example, can reduce the impact of incoming waves, as well as store large amounts of water, making them natural retention basins. Policies to maintain these natural environments along rivers and coastlines can help communities not only reduce

OECD Observer No 317-318 Q1-Q2 2019

their own exposure to floods, but also support these vulnerable ecosystems, which after all underpin the biodiversity that our lives depend on. Maintaining these areas requires preservation, but also proactively planting the likes of mangrove trees, which can successfully combat coastal degradation, as many pilot projects focusing on soft measures in places like Cuba, Bangladesh and elsewhere in the US have shown. In the wakes of hurricanes Isaac, Katrina, Rita and others, the state of Louisiana has recognised the importance of protecting its coastal wetlands, and is taking action to restore and preserve them. This will bring other benefits too, in the form of eco-tourism and improvements in air quality, for instance. But for real longterm resilience, a more multidisciplinary approach should be adopted, including other holistic actions as well, not least on the social front. Indeed, vulnerability in cases of flood events can be traced to socio-economic inequalities rooted in gender, class, race, age and other power structures. However, in our view, these social dimensions are still not sufficiently considered in current flood risk management studies. Women, people of colour and other potentially vulnerable groups suffer from higher levels of poverty and lower access to education than others, putting them at a disadvantage when trying to influence flood risk management policies that clearly affect them disproportionately. In the case of Louisiana, for instance, the RAND Corporation report mentions how funds have been made available via the Natural Disaster Resilience Competition in a bid to improve the community resilience. But no focus was placed on the more exposed sections of society by the funds. Education is one key area which policy should focus on to improve resilience. By actively engaging citizens and raising awareness in environmental issues, particularly among vulnerable groups, a

broader spectrum of people would likely express their views or become involved in policy making, leading to a more holistic perspective on flood risks and how to reduce them. We know this from the city of Nijmegen in the Netherlands, where the local community’s involvement in the decision-making process led to the creation of a “green” public space, providing recreational facilities which double as a natural barrier to floods. The state of Louisiana should emulate such examples. Considering another aspect of the multidisciplinary approach, Louisiana’s response lacked a thorough political approach to the natural catastrophes. A political approach refers to the engagement with numerous stakeholders. Natural disasters are not constrained by political borders or jurisdictions, and affect all social classes. Only a multi-stakeholder approach involving the different levels of government, as well as members of the public, businesses, and non-governmental flood management bodies, would ensure the cross-collaboration that proper flood resilience requires. In fact, our study shows that large stakeholder engagement between public, private and government, such as in Nijmegen, does indeed lead to more resilient solutions, however this demands input at grassroots levels to ensure relevant, effective solutions. In short, stakeholder engagement is no obstacle, but instead holds the solution. In Louisiana, the RAND report sees the Federal Flood Risk Management Standard as a good place to start, as it allows for the sharing of the best available data and methods on a federal level. Yet, this too is shy of the bigger goal of incentivising wide-spread stakeholder engagement to create long-term flood resilience. Technical measures have been developed and new ones that take account of the environment will be needed to improve protection against dangerous floods. But active engagement of the state with local populations, including vulnerable groups, is essential, as is collaborating with

private stakeholders more widely. When it comes to building long-term resilience, in flooding as in so many areas, technical, social and environmental dimensions are intrinsic to good policymaking. Note: This study was part of the Practising International Studies consultancy course (PRINS), as the outcome of a collaborative initiative between BA International Studies Leiden University and the OECD NAEC team. This work was selected as most scientifically sound as well as practically relevant among five other competing consultancies. Our team extends its gratitude to Rien Rouw for referring. Additionally, Sarita Koendjbiharie and María Gabriela Palacio Ludeña contributed greatly throughout the academic process of the report and in the facilitation of the project. Additionally, Sarita Koendjbiharie and María Gabriela Palacio Ludeña contributed greatly throughout the academic process of the report and in the facilitation of the project.

The “Rising Solutions” student consultancy team included: Alba Medina Bermejo, Isidoro Campioni-Noack, Océane Girault, Jan-Dorus Sleutels, Cathy de Jongh, Giedrius Astafjevas, Lea Müller, Rosa Ann Seidler, Oliver Mount, Lila Kasi, Moriah Warner, Nadine de Reuver, Jorieke Besselink, Sondra Samanez Pacheco and Noah Soekhai.

References and further resources Visit www.oecd.org/naec for more on our New Approaches to Economic Challenges initiative Groves, David G., Kenneth Kuhn, Jordan R. Fischbach, David R. Johnson, and James Syme (2016), Analysis to Support Louisiana’s Flood Risk and Resilience Program and Application to the National Disaster Resilience Competition, RAND Corporation, https://www.rand.org/ Love, Patrick (2018), “Q&A with OECD: What makes PRINS so valuable for your organisation?”, Leiden University News, https://www.universiteitleiden.nl/en/ Terrell, Dek (2016), The Economic Impact of the August 2016: Floods on the State of Louisiana, Louisiana Economic Development Wiering, Mark, and Madelinde Winnubst (2017), “The Conception of Public Interest in Dutch Flood Risk Management: Untouchable or Transforming?”, Environmental Science and Policy, No. 73: 12-19 For full references and sharing this article, see https://oe.cd/obs/2Cf

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The G7 Primary Health Care Universal Knowledge Initiative Stefano Scarpetta, Director, and Francesca Colombo, Head, Health Division OECD Directorate for Employment, Labour and Social Affairs

suffering from some chronic conditions did not receive any of the recommended preventive tests in the past 12 months, according to latest available data. Hospital admissions for chronic conditions, which could be averted by better prevention and diseases management, are also too high–equivalent to at least

A welcome step for patient-centred health care US$ 835 million on average across OECD countries. Moreover, inappropriate use of antibiotics, another marker of poor primary health care quality, ranges between 45% and 90% of reported cases–a higher share compared to other health care services.

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The good news is that policy makers can change things, particularly if they harness the best of what innovation around the world has to offer. There are many significant and useful innovative developments to draw inspiration from in primary health care services, such as Ma Santé 2022 (My Health) in France, My Health Teams in Canada, or the Friend and Family Test in the United Kingdom. By sharing experiences such as these, policy makers can identify the reforms they need, evaluate them, and help each other to make progress.

On 17 May, health ministers from the G7 countries met in Paris and reinforced their commitment to strengthen primary health care systems (see www.elysee.fr/en/g7). They launched the G7 Primary Health Care Universal Knowledge Initiative. It is a welcome step. Quite simply, from low to high income countries, people-centred primary health care systems are becoming more important. There are three main reasons for this. First, a people-centred approach helps keep health inequalities low. It is the one part of current health systems that delivers this, with little difference in the proportion of high or low income groups seeing a general practitioner. Second, being people-centred can help keep costs down. By treating people early at a local level, costly hospital admissions can be reduced, saving the equivalent of 6% of total bed days. And third, the approach is well-suited for addressing the health needs of the future, including a greater emphasis on preventive services, and for coping with the increasing complexity and care needs of ageing populations. But to meet these future challenges, primary health care services will need to transform. In fact, in too many OECD countries, primary health care is failing to deliver its full potential. While primary health care teams are in a unique position to advise patients on lifestyles, deliver preventive care, and manage the progress of chronic diseases, as low as one person in four

Five international organisations, the OECD, the World Bank, the World Health Organization, the Global Fund and Gavi, a vaccine alliance, have issued a statement to work together to produce a joint report. The report will include among other things an identification of the need for a universal knowledge exchange platform, a mapping of existing expert platforms, and an identification of the current shortcomings regarding knowledge dissemination and the exchange of good practices in the area of people-centred primary health care. The joint report should help to accelerate progress among all our countries, and will be a key step towards achieving and sustaining universal health coverage. Future health care challenges are already mounting, and a drive towards people-centred primary health care is the best way forward for policymakers in all our countries, which is why we welcome the G7 Primary Health Care Universal Knowledge Initiative. References OECD (Forthcoming), The Future of Primary Health Care, OECD Health Policies Studies, OECD Publishing, Paris. OECD (2017), Health at a Glance 2017: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/health_glance-2017-en. Health literacy for people-centred care – Where do OECD countries stand? OECD Health Working Paper No 107, https://dx.doi.org/10.1787/d8494d3a-en. OECD Patient-Reported Indicators Survey (PaRIS) initiative: https://www.oecd.org/health/paris.htm. For more articles on health care and people-centred approaches, see www.oecdobserver.org/healthcare Share article at https://oe.cd/obs/2D4

OECD Observer No 317-318 Q1-Q2 2019

In Indonesia, social protection can underpin democracy

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Alexander Pick, OECD Development Centre

Anyone looking for proof of the valuable role social protection plays in our economies should look no further than Indonesia. After all, here’s a country of over 260 million people living on more than 6,000 islands where administrative and logistical challenges are simply routine. Even Indonesia’s presidential election, held on 17 April, was hailed as an achievement in itself. Indonesia’s social protection system generates fewer headlines but is no less impressive. It now reaches almost the entire population, helping people escape from poverty, access health facilities, go to school and feed themselves. Whatever the result of the presidential vote, there is no doubting the growing contribution of social protection to Indonesia’s democracy. According to a new report, the Social Protection System Review of Indonesia,

the growth in social protection in Indonesia over the last 20 years has been remarkable. In fact, since the Asian financial crisis in 1997-98, successive administrations have not only expanded the scope of social protection to cover a broad range of risks but have also sought to increase coherence between programmes. Closing gaps in coverage and helping people stay out of poverty is nowadays a key goal in the government’s inclusive growth strategy. Two programmes in particular clearly show this. The first is the national health insurance programme, Jaminan Kesehatan Nasional (JKN), which as of 1 April 2019 covered 220 million people, or 85% of the population. As our chart below shows, coverage increased rapidly following a reform passed in 2014 that established a single health scheme for all Indonesians.

Moreover, contributions were fully subsidised for households classified as poor and partially subsidised for informal workers depending on their income. The new programme faces challenges, not least that the fast growth in coverage, generous benefits and opting-out by younger adults least likely to claim are putting pressure on the system’s finances. However, this progress towards universal health coverage has underlined the fact that a social protection system must reflect diverse individual needs and realities. The second inclusive programme is the Family Hope Programme, (Program Keluarga Harapan, PKH), which is a conditional cash transfer for poor households and whose coverage has also grown rapidly since 2014. In 2018, the number of beneficiary families reached 10 million and, in 2019, the value of benefits they receive will double.

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Not only is this programme the most effective of Indonesia’s instruments for reducing poverty but it has also been shown to achieve long-term improvements in recipients’ education and health outcomes. In fact, beneficiaries are also entitled to access free health care, scholarships and subsidised food to make sure all needs are covered. However, in practice people do not always receive their entitlements. Indonesia’s social protection system relies on a registry that comprises the poorest 40% of households across the country. Called the Unified Database (UDB), the registry, in theory, allows poor individuals to be linked to all the programmes they need to escape poverty for good. However, the fact that people tend to move in and out of poverty makes it hard to keep up-to-date information across Indonesia’s vast geographic area. This undermines efforts to target benefits and means the registry is not always trusted by sub-national administrations. Meanwhile, the government has also introduced a system of social protection cards (which act rather like bank cards) that not only make the system more transparent and straightforward but, also promote financial inclusion. The expansion of social protection coverage in recent years has coincided with notable improvements in the wider economy. In 2017, income inequality started to decline for the first time in two decades. Although at 0.38 in 2018, the Gini coefficient remains higher than the government would like. Meanwhile, the national poverty rate finally fell below 10% in 2018, having been more or less unchanged for the previous decade. Also notable is a sharp decline in the rate of stunting among children under age five, from 37.2% in 2013 to 30.8% in 2018, which represents good progress even if the rate remains above the average in Asia as a whole, of 23.2%. Such impacts have encouraged the

Growth in national health insurance programme (JKN*) Coverage by type of contributor, 2014-2018 Fully subsidised Non-salaried earners and informal workers

Salary earners and formal workers JKN coverage (right-hand axis)

Population, million

% of population

250

80 70

200

60 50

150

40 100

30 20

0 Ja

ry nua

201

4 Ja

ry nua

201

5 J

ar anu

016

Apr

il 2

Source: Agustina, Rina et al. (2019), “Universal health coverage in Indonesia: Concept, progress and challenges”, The Lancet, Volume 393, Issue 10166

government to step up its investment in social protection. The allocation to social assistance in the 2019 budget is 26% higher in nominal terms than in the previous year, making it a key driver of overall growth in public spending, although in absolute terms expenditure on social protection remains low by regional standards, at 1.4% of GDP. High levels of informal employment help explain this. Indeed, according to OECD data, Indonesia’s tax-to-GDP ratio was 11.6% in 2016, among the lowest in the region. To improve further, Indonesia’s social protection system must confront a number of challenges, some old, some new. For instance, rethinking decentralisation would help administrative coordination and make it easier to implement national policies. Meanwhile, the proportion of the population that is aged over 65 will rise steeply within a decade. This poses a challenge for pensions, notably among those in informal jobs. Indonesians’ vulnerability to natural disasters and climate change must also be addressed.

017 O

be cto

r 20

*Jaminan Kesehatan Nasional

References Agustina, Rina et al. (2019, January), “Universal health coverage in Indonesia: concept, progress, and challenges”, The Lancet, Vol. 313, Issue 10166, pp.75-102, https://www.thelancet.com/journals/lancet/article/ PIIS0140-6736(18)31647-7/fulltext?dgcid=raven_jbs_ etoc_email Bland, Ben (2019, April 15), “The World’s Most Complicated Single-Day Election Is a Feat of Democracy”, The Atlantic, https://www.theatlantic.com/international/ archive/2019/04/indonesias-elections-are-featdemocracy/587143/ Cahyadi, Nur et al. (2018, April), “Cumulative impacts of conditional cash transfer programs: Experimental evidence from Indonesia”, TNP2K Working Paper Series, http:// tnp2k.go.id/download/9759Working%20Paper%20 Cumulative%20Impacts%20of%20Conditional%20 Cash%20Transfer%20Programs.pdf OECD (2018), OECD Economic Surveys: Indonesia 2018, OECD Publishing, Paris, https://www.oecd.org/eco/ surveys/economic-survey-indonesia.htm OECD (2018), Revenue Statistics in Asian and Pacific Economies, OECD Publishing, Paris, https://doi. org/10.1787/9789264308091-en OECD (2019), Social Protection System Review of Indonesia, OECD Development Pathways, OECD Publishing Paris, https://doi.org/10.1787/788e9d71-en World Bank (2018, December), Indonesia Economic Quarterly, December 2018: Strengthening Competitiveness, World Bank, Washington, DC, https:// openknowledge.worldbank.org/handle/10986/30969 Share article at https://oe.cd/obs/2CO

By overcoming such challenges, as our report argues, social protection’s contribution to social cohesion, the economy and democracy will continue strong in the years ahead.

OECD Observer No 317-318 Q1-Q2 2019

Five facts about regional inequalities and what to do about them Lamia Kamal-Chaoui, Director, OECD Centre for Entrepreneurship, SMEs, Regions and Cities

areas are doing well, but others have also suffered, deepening the sense of isolation from being at the periphery. Meanwhile, cities, especially the large ones, also have their own internal divisions at a smaller, yet often quite intense, scale. Cities attract skills at both ends of the pay scale, from high-paid

Ultimately, the goal is to ensure the well-being of people everywhere

©David Rooney

bankers to the low-paid service sector workers. But these skills are polarising people. Greater residential segregation creates a further spatial divide among communities, and skyrocketing housing prices in many cities are not helping either.

Popular unrest, street protests and calls for a return to protectionism: today’s headlines make it crystal clear that too many people feel left behind or simply left out. The economic and social crisis didn’t help, and these divides are visible in our regions. We should have seen it coming, that by concentrating too much on national averages, the needs of too many communities would be overlooked. Our regional blindspots and insufficient place-based efforts are showing. No wonder people’s patience has run out. But a closer look at these regional divides shows that by re-invigorating regional development policies in strategic ways, particularly in our age of digital transformation, today’s geographical disadvantages could be turned into tomorrow’s opportunities. Regional economic divides are a fact of life. Economic activity is very concentrated and spikey, spreading across large cities to remote rural areas. In 20 out of 34 OECD countries with data, the top 20% of regions (many of them with large

cities) have more than twice the GDP per capita as the bottom 20%. Only 15 OECD countries have reduced that gap since 2000. These divides are destabilising and costly to address, and many countries have a political goal to make sure they do not get out of hand. The divides are not as simple as urban versus rural. Most people in the OECD live in or near a metropolitan area. In fact, 70% live in urban regions with cities of 250,000 or more and another 12% live within an hour’s drive of such cities. Given the spillovers of being near a city, thriving cities can help outlying small town and rural areas too. Moreover, rural areas provide critical resources to feed and fuel cities, as well as offer an escape to nature and relaxation for city dwellers. The trouble is, not all cities are doing well. In fact, while larger cities in the OECD have grown 13% since 2000, almost one in four cities has lost population over the same period, typically medium-sized or formerly industrial cities. Some rural

Quality of life matters, wherever people live. Ultimately, the public policy goal is to ensure the well-being of people everywhere. Do they have a quality job? Is commuting comfortable and affordable? Can they afford decent housing or services such as childcare, good schools or hospitals? Is the air they breathe healthy? Regional differences tend to augment gaps based on household income alone, so policymakers must work harder to close them. While place-based action can cost money, in some cases it is simply about doing things smarter. And the costs of inaction can be even higher–both to public budgets as well as in terms of lower social cohesion and well-being Ever growing productivity divides are a worrying sign. Such policies can boost productivity too. In fact, tensions can arise when gaps in regional productivity widen over long periods. In 14 OECD countries, national productivity growth over the last 15 years has been concentrated in the region with the main city–a “winner takes all” dynamic. The upshot is that this fuels further economic concentration,

SOCIETY

with more regions being edged out or left behind. However, several other countries have seen a narrowing in the regional productivity gap. In a few cases this is because the main city has lost steam. But the good news is that in eight OECD countries the struggling regions are actually catching up. Technological change, ageing and the future of work could widen divides. Today, as much as 39% of jobs in some regions face a high risk of automation. Others are less vulnerable, but all need to prepare policies to address change. Another megatrend to prepare for is ageing, since in half of OECD regions some 30% of populations are already over 65. Such regions are at a critical juncture. As the OECD Regional Outlook 2019: Leveraging Megatrends in Cities and Rural Areas argues, the ultimate question is whether superstar cities will take all, or are there opportunities to be seized that will bring new life to mid-tier cities and rural areas? While trends such as capital and investment flows favour successful cities, how can policy tilt the balance so that strong cities really can benefit hinterlands and other cities and towns? Could the likes of autonomous vehicles, virtual reality and artificial intelligence help reduce the cost of distance or improve the provision of services? Or will they accelerate concentration towards larger cities? Striking the balance is about getting the public policies right. So what can we do? First, we need to invest strategically using smart, place-based policies. For too long, policies have focused on national outcomes, and where they focused on places, it was through compensatory subsidies or programmes for the poorest places. Today, regional development policy is about building

on local assets and knowledge, and harnessing investment strategies with the ultimate goal of improving well-being. What is clear is if regions do not have the basics–such as high-speed internet access and a rightly skilled workforce– they will simply not be able to take

Regional and local governments are responsible for 57% of public investment and 40% of public spending advantage of future opportunities. Second, we need to make sure national policies are place-proof, or they do not fly. Only then will we ensure that, say, national guidelines for health and education services respond flexibly to people’s needs in cities and rural areas alike. Or that innovation policy focusing on the most advanced research is set up in such a way that also drives activity outside of top technology hubs. Third, national and local governments need to work in partnership. The right hand needs to know what the left hand is doing. While there are 36 OECD national governments, there are almost 137,000 elected regional and local governments and they are responsible for 57% of public investment and 40% of public spending. Too many conflicting regulations and investments are wasting resources, while too many isolated projects miss out on strategic opportunities. The French call these administrative layers a mille feuille, and just like their multi-layered pastry, it can be quite messy. The OECD Recommendation on Effective Public Investment across Levels of Government and a new report Making Decentralisation Work: A Handbook for Policy-Makers highlights how countries can do this better. Finally, local capacity and leadership will continue to be the heart of successful communities. No national policy can substitute for local initiatives or an entrepreneurial mayor. Capable and motivated leadership, whether in a big

city or at rural town council level, brings fresh ideas on what can work for a given community. However, they may need tools to work more effectively, which national policymakers should help provide. Also, while operating locally leaders should be thinking more globally, which includes reaching out to other local leaders at home and abroad for advice and inspiration. This is where the OECD can also play its role as a platform for data, policy dialogue and learning beyond the national level, such as for the OECD Champion Mayors initiative. By reaching out and working together, local policymakers can help their regions and their people become more actively involved and less isolated too. It is what place-based policymaking is all about. References and further reading OECD (2019), OECD Regional Outlook 2019: Leveraging Megatrends for Cities and Rural Areas, OECD Publishing, Paris, https://doi.org/10.1787/9789264312838-en OECD (2019), Making Decentralisation Work: A Handbook for Policy-Makers, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/g2g9faa7-en OECD (2018), OECD Regions and Cities at a Glance 2018, OECD Publishing, Paris, https://doi.org/10.1787/reg_cit_glance-2018-en OECD (2018), Job Creation and Local Economic Development 2018: Preparing for the Future of Work, OECD Publishing, Paris, https://doi.org/10.1787/9789264305342-en

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SPOTLIGHT Finland and the OECD Celebrating the next 50!

EDITORIALS 40

Three reasons why Finland can stay on top Angel Gurría, Secretary-General of the OECD

49 51

A beacon for the next 50 years Anne-Mari Virolainen, Minister for Foreign Trade and Development, Finland

SPOTLIGHT ON FINLAND 42 Business Brief: Wärtsilä 43 From forestry and heavy industry to a vibrant knowledge-based economy Christophe André Video in Augmented Reality Experimental Finland 45 Clara Young 47

Why Finland’s running circles around us Christopher Palmberg, Business Finland, and James Philp

The last (plastic) straw? James Philp OECD Observer Roundtable on Finland Annamari Arrakoski-Engardt, Juhana Aunesluoma, Anni Huhtala, Mari Kiviniemi, Pirita Näkkäläjärvi Finland leads the climate charge in the Arctic Council Clara Young

When the going gets easier Harri Pursiainen, Permanent Secretary, Ministry of Transport and Communications of Finland

Housing first: How Finland is ending homelessness Juha Kaakinen, CEO, Y-Foundation

The secret to Finnish education Andreas Schleicher

Finland’s mental health challenge Emily Hewlett and Kate Cornford

SPOTLIGHT

CONTENTS

A SHORT HISTORY 64

Finland’s cautious path to OECD membership Peter Carroll, Tasmanian School of Business and Economics, University of Tasmania

Finland in the OECD Observer: A selection from the archives

BOOKS 67 68

Publications: Focus on Finland Finnish architecture and design: A natural fit Ruairí O’Brien, Architect

DATABANK 69

Snapshots on Finland

Experimental Finland, page 45

Circular economy, page 47

Finland and the Arctic Council, page 54

When the going gets easier, page 57

Finland’s mental health challenge, page 61

Finland’s accession to the OECD, page 64

Special thanks to the Permanent Delegation of Finland to the OECD for their support in producing this special anniversary spotlight on Finland. Requests for offprint copies: Observer@oecd.org.

OECD Observer No 317-318 Q1-Q2 2019

SPOTLIGHT

EDITORIAL

Three reasons why Finland can stay on top We count on Finland to champion international co-operation and multilateralism Angel Gurría Secretary-General of the OECD

In 1969, when Finland became an OECD member, you were delicately balancing between the West and the East. Finland’s road to prosperity was neither obvious nor predetermined. Per capita income was almost 30% lower than in Sweden. In the 1970s and 1980s, Finland rapidly caught up with top performers such as Germany and Sweden in terms of income per capita, with the gap shrinking to less than 10%. But in the early 1990s, the country went through a deep recession: GDP contracted by 10% and the Finnish economy was damaged by a severe banking crisis. That was a painful period, with the unemployment rate reaching nearly 18% in 1994. But Finland showed its resilience–its sisu, as the Finns say. The economy rebounded and became increasingly knowledge-based, as illustrated by the global success of Nokia. Finland then joined the European Union in 1995, which supported economic reforms and boosted trade. When the global financial crisis hit in 2008, Finland’s output per capita had caught up with Germany’s and Sweden’s. However, as in the 1990s, the crisis hit hard. It took 10 years for Finland’s GDP to get back to its pre-crisis level. Economic growth and employment have rebounded over the past three years and optimism has returned. Output expanded at an average annual rate of 2.5% and the employment rate now reaches 72.6%. Today Finland is a global leader in a range of areas. The country is among the best performers in PISA (OECD Programme for International Student Assessment) and an innovation leader according to the European Innovation Scoreboard. Finland enjoys one of the lowest levels of income inequality in the OECD, and gender inequality is among the lowest in the world. Environmental policies are ambitious, renewables now make up nearly a third of primary energy supply, far above the 10% OECD average. Finland is also one of the few countries that are integrating the Sustainable Development Goals (SDGs) into its budgeting cycle. Compared to other OECD countries, the Finns are among the most positive towards globalisation, and have some of the highest levels of subjective well-being, personal security and environmental quality in the OECD. They are also quick to adapt to the shifts of global economic activity, increasing their presence in Asian markets in recent years (15% of exports in 2018). The OECD is proud to have contributed to these positive events. Since 1969, the OECD has supported Finland through delivering data driven, evidence-based and peer-reviewed analysis and recommendations. We have worked together to support Finland on

innovation policy, quality standards in early childhood education, labour market integration of migrants, and on Finland’s integration in global value chains. Next in the pipeline are collaborations to assess the impact of regulations on international investment in Finland and to support the Finnish EU presidency on the economy of well-being. And we are eager to continue to support your success story and work together on issues related to, for example, regional development, small and medium-sized enterprises (SMEs), or inclusive policies for the digital transformation. Looking to the next 50 years, your achievements across the economy must not be taken for granted, particularly given the uncertainty affecting the global scene. While globalisation lifted millions out of poverty and allowed vibrant economies like Finland to thrive, it also made many people feel left behind, triggering a resurgence of populism, nationalism and protectionism, which today threaten growth prospects and disproportionately harm low-income households. Opposition to multilateralism has also risen. Yet in a world of increasingly integrated economies that face urgent global challenges, like climate change and digital security, multilateral co-operation is needed more than ever. We count on Finland to champion international co-operation and multilateralism as it takes over the rotating presidency of the European Council in July. There are three reasons why I am confident that Finland will have a growing global and multilateral relevance in the coming 50 years. First, because you are visionary! Finland is a global leader when it comes to strategic foresight in policy-making. This includes deliberations by Finland’s Parliamentary Committee for the Future, regular futures reviews conducted across government ministries, and significant foresight investments by SITRA, an innovation fund, and others. As a result, Finland is often ahead of the curve on emerging policy issues. Second, because you are innovative! Finland is willing to try out new things. For example, the recent “Elements of AI” initiative joins a list of social experiments that test ideas to make society run better. The initial aim of the initiative was to teach 1% of the Finnish population about machine learning, but its reach is already beyond the initial goals, with new sign-ups in thousands every week in Finland and around the world. Finally, because you are harmonious! I am convinced that the spirit of inclusiveness, sustainability and community is part of the Finnish identity. Safeguarding these core qualities will ensure that Finland is positioned to stay on top and consolidate its role as a global leader. Please count on the OECD to support you, as you design, develop and deliver better policies for better lives over the next 50 years. @A_Gurria www.oecd.org/about/secretary-general/

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Finland joined the OECD on 28 January 1969. Adapted from speech delivered at a symposium, “Will we stay on top? Finland’s next 50 years in the OECD”, marking Finland’s 50th anniversary as a member country, on 15 March 2019; read the original version at https://oe.cd/2x8

SPOTLIGHT

EDITORIAL

A beacon for the next 50 years Anne-Mari Virolainen, Minister for Foreign Trade and Development, Finland

was driven by its desire to join its natural reference group of Western, market-based democracies. The OECD has brought us many things. It has been a research institute for high-quality studies into economic and social policies and their impact. From development of statistics and measurements to policy advice, we have been making use of OECD best practices in many fields.

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The OECD has been a forum for exchanging ideas among countries, which are not just like-minded, but mostly on very similar levels of development. We have been able to form a common understanding regarding questions ranging from competition to taxation, not forgetting corruption, investment policies, export credits and responsible business conduct.

The year 1968 was very important in many respects. There were youth revolts throughout Europe contesting the old order. In Vietnam, the war had intensified. The Prague Spring in Czechoslovakia ended with a Soviet intervention. In addition to all these events, Finland negotiated its accession to the OECD. We became the organisation’s 22nd member in January 1969, and here we are today, celebrating Finland’s 50 years at the OECD. Those 50 years have been very transformative. Finland in 1969 was in the process of evolving from an agrarian society into an industrialised one. One third of the work force was still working in agriculture in the 1960s, but that share was quickly diminishing. There was a strong internal migration from the countryside to the cities, and towards the end of the decade, many hundreds of thousands went to Sweden for work. The next decade brought more urbanisation, more industrialisation, the free trade agreement with the European Economic Community (EEC), and among other things, reform of the school system. The economy continued to open up in the 1980s, which led to an economic boom, but that was followed by a deep depression in the early 1990s. Thereafter came the crucial moment of joining the European Union in 1995, becoming more and more connected, and interconnected, with the rest of the world. We lived the golden years of Nokia’s success of the early 2000s and the structural crisis in our economy of the past decade. Now, conscious of the global challenges that we and everyone else are facing, we’re looking for new sources of growth. And just as in 1969, we are looking for ways of achieving social improvement. The OECD has contributed a lot since we joined. For sure, the reasons for joining the OECD were also political, and Finland

The OECD has been a place for invaluable learning among peers. Its reviews have given us insight into how other countries have tackled tricky social problems. It has given us a platform to show others what we have done well. It has offered us benchmarks to strive for, and to surpass. Take development policy, for example. The OECD’s Development Assistance Committee (DAC), which monitors and tracks bilateral official development assistance, is the standardsetting community for development issues. Currently OECD is supporting its member states to achieve the 2030 Agenda for Sustainable Development, both in development co-operation and beyond. I like to think of the OECD as a lighthouse to show us the way, to improve, to become better as a society, as an economy, and as members of the international community. The OECD motto, “better policies for better lives”, resonates well in Finland. We are about to undergo a massive transformation in the coming decades as well, including changes in world economy, the impacts of climate change and mitigation, sustainable development, urbanisation, migration, digitalisation, artificial intelligence, robotisation, and more. There are many fundamental challenges, and many unanswered questions. And they are not issues that Finland can address on its own. We need to work to find solutions together. In all of this, we find the OECD work extremely important. The OECD has been instrumental in identifying emerging issues for the decades to come and proposing solutions to challenges ahead. Its impartial, independent research is vital in assessing the impact of our policies. As we celebrate Finland’s first 50 years at the OECD today, we are looking forward to the next 50 years, with the OECD as one of our beacons. Edited and adapted from the opening speech delivered at a seminar celebrating the 50th anniversary of Finland’s membership of the OECD, held in Finlandia Hall, Helsinki, 15 March 2019. Share article at https://oe.cd/obs/2zK

OECD Observer No 317-318 Q1-Q2 2019

Business brief

The global energy market is constantly evolving. Current market trends show the energy landscape is in transition towards more flexible energy systems with a rapidly increasing share of renewable energy, declining inflexible baseload generation and wider applications of storage technology. The decreasing costs of renewables have begun to reduce new investments into coal and other inflexible baseload technologies; a transition which will eventually cause renewables to become the new baseload. In 2017 alone, 14% of electricity generation worldwide was attributed to wind and solar. Wärtsilä aims to accelerate this transition towards a 100% renewable energy future. As a leading global energy system integrator offering a broad range of flexible and efficient solutions for the operational

Wind and solar can become the new baseload once supported by fast and flexible back-up power lifecycle, Wärtsilä can create optimal paths towards a 100% renewable energy future for its customers by analysing customer requirements and building optimal energy systems with total cost of ownership.

The renewable revolution In recent years, market trends have shown a steady decline in the price of renewable energy in the global power sector. Investments into new inflexible baseload generation are also on the decline and price performance data shows that the cost competitiveness of wind and solar is rapidly increasing as compared to traditional thermal generation. In the past 20 years, the cost per kW of wind power plants has decreased by 40% and solar has dropped by 90%. Currently, wind and solar attribute to approximately 1,100 GW of electricity globally, which forecasts indicate will rise to 2,000 GW in 2024.

Moving towards high renewable energy systems Global progress towards achieving a 100% renewable energy future is being made at an incredibly rapid pace. Power providers, utilities

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The path towards a 100% renewable energy future and governments are changing their perspectives towards inflexible generation and existing thermal capacity is being replaced with renewables. This phased transformation, from the global power system operating at 0-20% renewables to a stage where 80-100% renewable energy systems will exist, requires major changes in infrastructure, investments and innovation in technology. The renewables become the new baseload and excess renewable energy is used as raw material for other commodities. This increase in the usage of renewables will require highly flexible thermal capacity to maintain system reliability and energy storage will become a key component in the baseload grid to maintain overall grid balance.

Wärtsilä Solutions for a 100% renewable energy future Flexibility and hybrid solutions are critical components for leading this transition to a 100% renewable energy future. Smart Power Generation plants provide the best means of support to the power system by offering the highest degree of flexibility, enabling major savings, and creating an optimised response to rapid changes in intermittent generation. To enable the transition for its customers, Wärtsilä also provides utility-scale hybrid solutions of integrated energy storage and energy management systems to achieve system stability, and maximises renewable penetration using solar and wind generation. Wärtsilä’s existing engine solutions have the capability to operate using various gas and liquid fuels and are flexible to also function on synthetic biofuels and traditional biofuels. Wärtsilä develops smart technologies and participates actively in the development of Power to X technologies. www.wartsila.com

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SPOTLIGHT

FINLAND

Christophe André, OECD Economics Department

Video: Happy 50th anniversary, Finland at the OECD! In 1969, Finland became an official member of the OECD. Since then, this Nordic nation has transformed into an innovative, knowledgebased society. https://oe.cd/obs/2zI For Augmented Reality scan with SnapPress Download the app for free

On a cold, dark Helsinki winter’s day in 2014, I was waiting for OECD SecretaryGeneral Angel Gurría and my other colleagues in a black limousine in front of the austere parliament building. The scene could have come out of a John le Carré thriller. It was late in the day. The OECD delegation I was waiting for was meeting Alexander Stubb, then the minister for European affairs and foreign trade. One of Finland’s most europhile and tech-savvy statesmen, Mr Stubb soon became prime minister. How things had changed in 50 years. In 1969, when Finland became an OECD member country, Cold War tensions were still running high. The decade had started with the Cuban missile crisis and building of the Berlin Wall. Finland was a small country squeezed between the Soviet and US superpowers. President Urho Kekkonen, who held office for a quarter of a century

(1956-81), was striving to keep a delicate balance between East and West. Finland’s road to prosperity and integration with the West has been long and bumpy. The first OECD Economic Survey of Finland, published in 1969,

Finland’s road to prosperity and integration with the West has been long and bumpy noted that “the heavy weight of agriculture both in terms of output and employment is still an important feature of the Finnish economy.” At that time, less than 65% of Finns lived in cities compared to 80% of Swedes. Agriculture still employed a quarter of the Finnish workforce. Industry accounted for more than a third of employment, dominated by the wood and pulp and paper sectors, as well

as metal industries, such as shipbuilding and lifting, transport and electrical equipment. Finland’s income per capita was almost 30% lower than in Sweden, to where many Finns were emigrating to find better jobs. During the 1970s and 1980s, Finland rapidly caught up with Germany and Sweden in terms of income per capita, with the gap shrinking to less than 10% (see chart). But in the early 1990s, Finland went through a deep recession: GDP contracted by 10% between 1990 and 1993. The collapse of the Soviet Union had disrupted trade links. The Finnish economy was damaged as well by a severe banking crisis caused by poor supervision following financial market deregulation in the late 1980s. Finland and other Nordic countries buttressed their financial systems in the following years. Alas, many other countries around the world failed to learn from the Nordic

OECD Observer No 317-318 Q1-Q2 2019

experience, and let financial imbalances accumulate until they triggered the global financial crisis in 2008.

What has OECD membership brought to Finland? Policy advisers and economists point to the political importance of joining a club of western democracies 50 years ago, leading to closer international integration and convergence. They value the OECD’s contribution to Finland’s public policy debate in a widening range of areas, with comparable data, benchmarking, research-based evidence and comparative analysis. The OECD provides a valuable “outsider’s” view on policies and fosters continual exchanges of views with member countries’ analysts and policymakers. As an OECD economist, I greatly value

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of Nokia, which in the 1990s became one of the world’s leading brands in mobile phone handsets. Finland joined the European Union in 1995, which supported economic reforms and boosted trade. When the global financial crisis hit in 2008, Finland’s output per capita had caught up with Germany’s and Sweden’s. But, as in the 1990s, the crisis hit hard. The effects of the global economic downturn were compounded by the collapse of Nokia’s mobile phone business, a sharp fall in demand for paper and a recession in Russia. It took 10 years for Finland’s GDP to get back to its pre-crisis level. But economic growth and employment have rebounded over the past three years and optimism has returned.

Relative to Sweden

Relative to Germany

100

Finland offers a wide range of best-practice examples, from education to innovation and inclusive growth

Relative to the US 110

The 1990s crisis was painful. The unemployment rate peaked at nearly 18% in 1994. But Finland showed its resilience–its sisu, as the Finns say. The economy rebounded and became increasingly knowledge-based, as illustrated by the spectacular success

Finland’s 50 years of progress GDP per capita, US$, constant prices, 2010 purchasing power parities (PPP)

SPOTLIGHT

FINLAND

Source: OECD Economic Outlook Database

the very open, constructive and stimulating debates I have with my Finnish counterparts. They are rightly proud of Finland’s successes and of what their country brings to fellow OECD members. Finland offers a wide range of best-practice examples, from education to innovation and inclusive growth. It is among the best performers in PISA–the OECD’s worldwide education test among 15-yearolds. It is an innovation leader according to the European Innovation Scoreboard. It enjoys a level of income inequality that is among the lowest in the OECD. Finland is also one of the most genderequal countries in the world. When I started working on my first OECD Economic Survey of Finland in 2011, Tarja Halonen was the president of Finland and Mari Kiviniemi, who was later to become a deputy secretary-general at the OECD, was prime minister. But having two women in the country’s top jobs was not surprising for the first country in the world to elect women as members of parliament, in 1907 (Finland was, then, an autonomous Grand Duchy, part of Russia).

Today, Finland faces new challenges, not least having to cope with a rapidly ageing population and rising global economic and political uncertainties. During what has been nearly a decade on the Finland desk at the OECD, I have been impressed by how Finnish policymakers and economic stakeholders more broadly address challenges in a very rational and pragmatic way, as well as their ability to build consensus on decisive issues. This gives me confidence that Finland will achieve as much over the next 50 years as it has since 1969, and that it will continue to inspire its OECD peers and others beyond in the pursuit of better policies for better lives. References OECD (2018), OECD Economic Surveys: Finland 2018, OECD Publishing, Paris, https://doi.org/10.1787/eco_ surveys-fin-2018-en. European Innovation Scoreboard 2018 at https://ec. europa.eu/growth/industry/innovation/facts-figures/ scoreboards_en Share article at https:/oe.cd/obs/2tG

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SPOTLIGHT

FINLAND

Experimental Finland

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Clara Young, OECD Observer

Start-up event, Helsinki, Finland Most people spend their evenings kicking back with a book or whatever’s on Netflix. In Finland, they’re teaching themselves artificial intelligence (AI). In the summer of 2017, computer scientist Teemu Roos heard that the government was looking for ways to teach ordinary people the basics of artificial intelligence. It would be a continuing education initiative–not necessarily to train people to become machine-learning engineers, but to understand how neural networks work and grasp how AI is changing the way we do things. Roos teamed up with the tech firm Reaktor to design an easy-to-follow massive online course that rolled out in May 2018. Some 90,000 people signed up. By the following September, 7,500 people had completed the 30-hour course and graduated. The goal the Finnish government has set is to educate 1% of its population about machine learning.

“Elements of AI” is just one of Finland’s many pilot projects and social experiments, big and small. This is something the Finns are really good at: carefully designing long-running, society-wide experiments with broad grassroots participation that test ideas for making society run better. The radical idea was to turn this penchant into a national experimental culture. What the government has called “Experimental Finland” came into being in 2015 in the prime minister’s office. The goal was to set up small “sandbox” projects and larger formalised policy trials in the areas of circular economy, digital workforce skills and artificial intelligence over the next 10 years. A small Experimental Finland team was put together to call for new ideas and oversee experiments at all different levels of government, from municipal to national, and across the country. Projects

and trials that pass muster are funded by the government or co-financed by the public and private sector. Finland has taken a systems design approach in its policymaking. And it’s telling its civil servants not to be afraid to try out new ideas. Finland’s complicated social security, for instance, is a system in need of new ideas. Finland started out with a small residence-based pensions programme and universal child benefits after World War II. Today, it provides mandatory day-care services for families with small children and home-care benefits for those looking after members of the family who are ill or elderly. But Finland’s welfare state needs streamlining. And the current system of tying people’s social protection to their jobs is rapidly growing outdated: people are turning to temporary jobs,

OECD Observer No 317-318 Q1-Q2 2019

SPOTLIGHT

FINLAND

increasingly working as independent contractors, or, perhaps as a fall-out of automation, not able to find work at all. Like some other countries in the world, Finland thinks universal basic income (UBI) is something worth looking into, and now it has. Preparation for a formalised trial on universal basic income began in 2015. Among the more innovative ways the government elicited research on basic

The current system of tying people’s social protection to their jobs is rapidly growing outdated income models was to organise a two-day Basic Income Hack. For 32 hours straight, 10 teams composed of coders, researchers, politicians, communications specialists, graphic designers, activists and information designers brainstormed about basic income. Some of their ideas, including a basic income game that simulates how certain life choices affect public finance, shaped the design of the UBI trial. On 1 January 2017, the two-year trial began. The Finnish social security agency, Kela, paid a randomly sampled, non-voluntary group of 2,000 unemployed people aged between 25 and 58 a monthly basic income of €560, unconditionally

and without means-testing. This replaced their usual unemployment benefits. The control group was also unemployed but received their benefits in the traditional way. The experiment ended on schedule on 31 December 2018. The following February, Kela released its preliminary findings: “The basic income experiment did not increase the employment level of the participants in the first year of the experiment. However, at the end of the experiment the recipients of a basic income perceived their wellbeing as being better than did those in the control group.” Based so far only on data from the first year of the trial, there was no difference between the group that received basic income and the control group in terms of finding work. Both groups also worked an average of 49 days during that year, with the UBI group earning €21 less than the control group. Findings from the second year of the trial will be published in 2020. To encourage more experiments of this kind, the government has opened a digital platform called kokeilunpaikka. It means Place of Experiment. Here, people can read up on results and analyses of past experiments, find out what sorts of projects the government is looking for, and go through a step-by-

step process of submitting their own experiment. In healthcare innovation, for example, a group of nurses is testing robotic vests that may help them lift up patients more easily. In another project, a game is being piloted that helps prepare medical patients for diagnostic testing. Sometimes experiments can run into snags because of legislative obstacles. The government hopes to smooth these out by bringing out a guide that helps navigate through these situations. Finland is always ready to take something new out for a spin. Where else could a pulp and paper company have come up with what was, for a time, the world’s most coveted cell phone? But innovation is typically a private sector asset. Turning it into a public sector one too is perhaps the grandest experiment of all. Further reading Read about Finland’s UBI experiment at www.kela.fi/web/ en/basic-income-experiment-2017-2018 Learn more about Finland’s kokeilunpaikka digital platform at www.kokeilunpaikka.fi/en/ Ilkka Taipale (ed) (2018), 100 Social Innovations from Finland, Finnish Literature Society, Helsinki OECD (2017), OECD Reviews of Innovation Policy: Finland 2017, OECD Publishing, Paris, https://doi. org/10.1787/9789264276369-en Share article at https://oe.cd/obs/2yx

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Why Finland’s running circles around us

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Christopher Palmberg, Business Finland, and James Philp, OECD Directorate for Science, Technology and Innovation

What do toothpaste and ice-cream have to do with a circular economy? If you live in Finland, quite a lot. CP Kelco, a multinational company with facilities in Äänekoski, Finland, recycles waste pulp from the city’s pulp and paper mill into carboxymethyl cellulose, a natural polymer used to thicken ice-cream and toothpaste. Minimising waste or converting it into useful products like this is one of the three central tenets of a circular economy. The other two are processing products in the most resource-efficient way and making things that have a much longer life-span– disposables are the villains in a circular economy. And, when manufacturing uses biological raw resources or biotechnological means in the process, as is the case with CP Kelco’s toothpaste

and ice-cream, what is circular is not just the economy but the bioeconomy. Due to climate change and resource depletion, we need to redesign industrial processes to reduce carbon emissions, waste, and contaminants. Finland is embarking on this, making it one of the great champions of a circular economy. It was the first to create a national circular economy roadmap, in 2016, and is one of seven EU member states to have a dedicated bioeconomy strategy. It hosted the first world circular economy forum, with 90 countries attending, in 2017. Its innovation fund, SITRA, together with the European Climate Foundation (ECF), then commissioned a report, Re-configure: The Circular Economy–a Powerful Force for Climate Mitigation, which was released last year. Its findings were radical: switching to

a circular industrial production of cement, steel, aluminium, and plastics, particularly in the construction and passenger car industries, could reduce EU industrial

Finland is leading the way in developing a circular economy, and drawing valuable lessons too emissions each year by 56% (296 million tonnes of CO2 out of a total of 530) by 2050. This could take the EU more than halfway towards net zero emissions. Finland can show us the way. One of the most advanced bioeconomies in the world, Finland’s forestry sector accounts for over 20% of its export revenue, and over half of the Finnish bioeconomy. Other than toothpaste and ice-cream thickener, another use of timber and forest residues

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is pulp-based fabrics, which is a burgeoning new industry. The Metsä Group pulp and paper mill, for one, is experimenting with this, also in Äänekoski. Finland, of course, continues to manufacture paper from wood though this is an industry that has been troubled by the transition to paperless digital media. Still, 25% of the paper industry’s valueadded is now achieved through circular bioeconomic processes. Biodegradable packaging and bio-based chemicals, plastics and, as mentioned earlier, textiles, are just some novel products of waste streams from paper manufacturing. But it is the replacement of high carbonemitting, high energy-use cement with renewable timber in large-scale building construction that will make the biggest dent in the country’s carbon budget. In 2011, the Finnish government set a target of increasing the market share of domestically-sourced wood multi-storey construction from 1% in 2011 to 10% by 2015. In 2015, an 8-storey timber-frame building was completed in Finland, one of the first high-rise examples of prefabricated cross-laminated timber (CLT) construction in the world. Finland’s investment in bioeconomy is such that it now represents 16% of the national economy. And the Finnish bet is paying off handsomely: besides conjuring economic wealth from things previously thrown away, it has also created jobs. In 2014, the bioeconomy generated revenues exceeding €60 billion with more than 300,000 people employed in it. Finland aims to bring this number up to €100 billion by 2025 and add another 100,000 jobs–a growth of about 4% a year. And beyond that? Estimates suggest another €2-3 billion in potential added value to the Finnish economy by 2030. And another 75,000 additional jobs as the economy gets more and more circular. What is truly ground-breaking, however, is the way in which Finland is pioneering new circular bioeconomy business models. It is creating circular bioeconomy hubs

around biorefineries. These are the “factories”of the bioeconomy, which convert raw materials like wood into products like fuels, chemicals, plastics and textiles. Finland has been savvy in embedding their biorefineries

Beside conjuring economic wealth from things previously thrown away, bioeconomy has also created jobs geographically within an ecosystem or cluster of companies. The biorefineries are close to the feedstock; in Finland, this is more often than not, forests. The bioproduction mills convert this feedstock and feedstock waste into fuel or chemicals that the nearby companies use in creating their own products. These are then consumed locally or exported, and eventually, when products have reached the end of their life, recycled. Äänekoski, with its traditional pulp mills, is one such hub. Metsä Group has developed a €40 million test plant in Äänekoski that is experimenting with converting papergrade pulp into fabric. The Metsä Group hub also includes two chemical plants: CP Kelco, mentioned above, and Minerals Nordic, as well as the Valio cheese factory. Valio makes use of the heat generated by a pulp mill in its cheese production. Other typical pulp mill by-products are tall oil, which is used in adhesives, rubbers, inks, soaps, lubricants, and emulsifiers and the turpentine found in solvents, paintthinners and fragrances. Äänekoski has been so successful that it is pursuing even more circular bioeconomy business opportunities. EcoEnergy SF now produces a unique biogas as well as biofuel pellets from the mill’s wastewater treatment plant sludge. Another company, Aqvacomp, may build a plant at Äänekoski that processes pulp into a biocomposite that can replace plastic in the electronics and automotive industries. And lastly, the mill itself gasifies tree bark into a bio-based natural gas to fuel the mill, replacing fossil-fuel energies. It captures

a portion of its CO2 emissions, converting them into pigments, and has pioneered a process by which it converts noxious gases into sulphuric acid for the mill’s own use– a world first. Äänekoski aims to create bioproducts that use 100% of its raw wood and production side streams. This will create some 2,500 new jobs and a whole lot less carbon emissions. Bioindustrial clusters like Äänekoski are the future, now. With refineries that are close to feedstock and companies that produce goods for local and export consumption, these hubs create ecologically virtuous circles. Äänekoski shows that if, like in Finland, there is the political will, there will be a circular bioeconomy way. References European Commission (2018), A sustainable bioeconomy for Europe: strengthening the connection between economy, society and the environment, European Commission, Brussels International Renewable Energy Agency (2018), Bioenergy from Finnish forests: Sustainable, efficient and modern use of wood, International Renewable Energy Agency, Abu Dhabi Hetemäki, Lauri, et al. (2017), “Leading the way to a European circular bioeconomy strategy”, From Science to Policy 5, European Forest Institute, Joensuu, Finland Ministry of Employment and the Economy (2014), Finnish Bioeconomy Strategy, www.bioeconomy.fi OECD (2019), Innovation for a sustainable bioeconomy: innovation ecosystems, OECD Publishing, Paris, forthcoming OECD (2018), Meeting Policy Challenges for a Sustainable Bioeconomy, OECD Publishing, Paris, https://doi.org/10.1787/9789264292345-en Philp, James. and David E. Winickoff (2018), Realising the circular bioeconomy, OECD Science, Technology and Industry Policy Papers, No. 60, OECD Publishing, Paris, https://doi.org/10.1787/31bb2345-en Sitra (2016), “Leading the cycle: Finnish road map to a circular economy 2016–2025”, Sitra Studies 121, Helsinki, Finland Wijkman, Anders and Skånberg, Kristian (2015), “The circular economy and benefits for society. Jobs and climate clear winners in an economy based on renewable energy and resource efficiency. A study pertaining to Finland, France, the Netherlands, Spain and Sweden”, Club of Rome, Winterthur, Switzerland

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The last (plastic) straw? vegetable bags, coffee capsules, tea bags, and mulch films for growing fruit and vegetables. To date, their market penetration is minimal. And yet they can add value in a circular economy: they can be processed in industrial composting facilities or contribute to biogas generation for renewable energy.

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James Philp, OECD Directorate for Science, Technology and Innovation

Dustin Hoffman (left) in The Graduate, 1967 “I just want to say one word to you. Are you listening? Plastics.” This infamous advice, delivered to Ben, played by Dustin Hoffman in the 1967 film, The Graduate, foresaw a great career in plastics. And indeed, plastic is one of the most successful materials ever produced. So much so that about 300 million tonnes are produced each year. But the gloss has faded a little too, because of severe environmental problems which plastics pose. They are generally not biodegradable and hang around in the environment for decades or much longer. In 2018, a Pacific

Ocean garbage patch was estimated to be 16 times larger than previously thought–it is twice the size of France. In the oceans, they can break down to microplastics, which can be taken up by, and interfere with, marine life. A report in January 2019 showed that every marine mammal in a survey contained microplastics, and the effects of this are largely unknown. If things do not change, by 2050 there will be more plastic waste in the oceans than fish. Biodegradable plastics can fill important niches, such as packaging, fruit and

A Finnish start-up, Sulapac, makes a packaging material that has plastic-like properties, yet biodegrades completely and leaves no microplastics behind. Made of sustainability-certified wood and natural binders, it can be used, for example, in cosmetics packaging to replace plastic jars. A new product for this Finnish company is a microplasticfree, marine biodegradable and massproduceable drinking straw, an alternative to the oil-based plastic straws currently consumed by the billion each week. Who knows, they may even make a great career for graduates in the future. Further reading Nelms, Sarah E., et al. (2019), “Microplastics in marine mammals stranded around the British coast: ubiquitous but transitory?”, Scientific Reports 9: 1075, doi.org/10.1038/s41598-018-37428-3 OECD (2018), “Realising the circular bioeconomy ”, OECD Science, Technology and Industry Policy Papers No. 60, November 2018, https://doi.org/10.1787/31bb2345-en Share article at https://oe.cd/obs/2yz

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SPOTLIGHT

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OECD Observer Roundtable on Finland

Towards ever better marine protection Annamari Arrakoski-Engardt, Secretary-General, John Nurminen Foundation

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To mark Finland’s 50th anniversary as a member of the OECD, we have invited a range of representatives to answer the following question: What Finnish achievement would you most celebrate from the last 50 years, and what would you see as the main policy challenge for the next 50?

into our inland sea in amounts it couldn’t handle. We caused eutrophication, which is a serious problem.

There are great ideas to be tapped in big and small businesses. We will have to introduce flexibility in administration and taxation, by creating new funding mechanisms and lowering the threshold for corporate funding. By matching funding and willingness to pay, we can set new records, with Finland leading from the front.

Who owns the Baltic Sea? Well, it’s everyone’s and no one’s, which makes its protection a formidable task! There are nine coastal states on the Baltic Sea, with close to 90 million people living in its catchment area. Since the Second World War, in our efforts to build a brave new world, we cultivated land and put as much fertilizers as we could into it to produce good crops. We built factories and we moved to cities in great numbers. But we have since woken up to realise that we are pushing nutrients and waste

Looking forward to the next 50 years, we must keep the Baltic Sea clean for the future generations. After all, we and our forebears are guilty of causing this crisis, so surely we should solve it. We face complicated tasks. In agriculture, for instance, we have to figure out how to sustain the nutrients in soil. One innovation worth mentioning here is gypsum treatment of fields, which is fully a Finnish innovation. We have to find innovative methods for rescuing the Baltic Sea. Could we, for instance, find a way to retrieve the nutrients that are stored on the sea bed?

Visit www.johnnurmisensaatio.fi/en

Can Finland be top of the class on ageing too? Juhana Aunesluoma, Historian, Research Director, Centre for European Studies, University of Helsinki.

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We are fighting back now, though, thanks to organisations like ours, corporations, and local authorities. Nowadays wastewaters are properly treated before they reach the Baltic Sea. In the Gulf of Finland, we have managed a massive 75% reduction in the annual phosphorus load in the sea. This record achievement was the result of international co-operation, and the key was our active focus on two major hot spots in Gulf of Finland: Saint Petersburg and, also in Russia, a major fertilizer factory near the city of Kingisepp.

Finland’s top achievement in the last half-century is its education system. From the late 1960s onwards, it has built a well-functioning and comprehensive

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OECD Observer Roundtable

The biggest challenge the country faces now is its ageing population. Current demographic trends put pressure on its labour markets and for the financing of its health and social services. Finland needs immigration to replace and renew its workforce, but faces difficulties in setting the goals and priorities regarding its immigration policy. Its public services are under financial pressure, and a comprehensive social security reform is needed, but slow to come. The risk is that, with ageing, publicly funded health and social services will consume an increasing share of its public sector spending, allowing less room for developing its education, training and research and development systems and its economic and business infrastructure. This is crucial for the country to be able to maintain its Nordic style welfare state and social safety net, indeed, its basic social model, in the future. Twitter: @aunesluoma Visit www.helsinki.fi/en/networks/centre-for-europeanstudies

Making progress on the environment, but what about equal rights of access? Anni Huhtala, Director General, VATT Institute for Economic Research The relationship between economic growth and the environment is controversial. Global warming can be

An interesting question is: who actually benefits most from this improved water quality and the increased recreational opportunities? Do the rich benefit more than the poor? Nordic countries like ours differ fundamentally from many other countries in that their institutions include a common right of access to all natural areas. Undesirable, unequal provision of environmental amenities can be avoided only if such distributive issues are taken into account in environmental planning. This is one of the key challenges for future Finnish environmental policy, as we address global warming and work towards a reduction of greenhouse gases. Visit https://vatt.fi/en/environment-energy-and-climatepolicy

Anni Huhtala

seen as evidence that humans are short-sighted and greedy. In contrast, the enormous progress made in providing urban sanitation and improvements in water and air quality are examples of continuing advances in the human condition, which have been made possible by technological developments. Finland is known as the land of a thousand lakes. As recently as in the 1960s, a quarter of the population lived near badly polluted water bodies. At that time, Finland was a relatively poor country, compared with our neighbour Sweden, for example. The growth of the Finnish national economy was accompanied by a shift in environmental and industrial policy that aimed to foster improved water quality. Efficient treatment of wastewater discharges started in municipal plants in the 1970s. However, some large lakes were too polluted to swim or fish in. As new pulp and paper mills surged, providing jobs and other economic opportunities, such environmental deterioration was simply considered as the price of progress. The turning point came in 1980s. Today, water quality is classified as excellent or good across 80% of the total area of Finland’s lakes. In particular, waters near industrial facilities have become cleaner in recent years.

Reforms to maintain our well-being Mari Kiviniemi, Managing Director, Kaupan liitto–Finnish Commerce Federation*

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school system that provides high-quality education for the whole population. It covers geographically the whole country, including less populated areas, and the schools are socially and culturally inclusive. Learning outcomes have been on a very high level by international comparison. In addition to this, Finland has a competitive research and development sector building on the strengths of its higher education system and on its investment in basic research. For a relatively small country, Finnish universities and Finland-trained academics and professionals punch above their weight.

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Finland has become one of the world’s best performing countries in so many areas, it is hard to single out just one. The country scores highly in most dimensions of the OECD’s Better Life Index. It stands out for well-being, education and skills, environmental quality and personal security. Also, Finland’s income inequality, as measured by the Gini coefficient, is among the lowest in the OECD. Finland tops many unofficial ratings, too, like the Good Country Index and the UN’s World Happiness Report.

OECD Observer Roundtable

These results tell the same story: that Finns have been able to develop their country, their economy and the whole of their society in a comprehensive and inclusive manner.

The major domestic challenge is how to maintain our high level of wellbeing. To reach this objective, structural reforms restoring competitiveness, raising productivity and boosting employment will be needed. The labour market needs to function better and work incentives need to be further strengthened. Science, technology and innovation are more than ever crucial to boosting growth and jobs, and to addressing the grand challenges of our time, from development, to climate change to global health. That’s why continued support and sufficient financial resources will be needed for R&D and education. Maintaining our willingness and capacity for reform and keeping Finland’s economy and society operating at a high level will also be a challenge. The OECD’s role in informing and inspiring our efforts will be needed again in the future. *Mari Kiviniemi is a former Deputy Secretary-General of the OECD Visit https://kauppa.fi/eng/

The achievement of Sámi parents Pirita Näkkäläjärvi, Journalist, Sámi of the Year 2017 One of the most important achievements in Finland is the teaching of Sámi

were the first two children in Finland to receive tuition in Sámi–when my nieces started school after 2015, Sámispeaking classes were already bigger than the Finnish-speaking classes in Inari. A lot remains to be done. For example, there is a lack of funding for Sámi teaching materials. Most textbooks are quite old, some of them pushing 20 years. We expect the government to assume more responsibility in our joint effort by making sure that the three Sámi languages in Finland are maintained and developed.

©Mikko Mäntyniemi

Still, Finland faces both external and domestic challenges. As a small open economy, Finland’s future development and economy can be harmed by geopolitical tensions and protectionism, both of which are growing. Free trade and active participation in global value chains is a prerequisite for guaranteeing Finland’s future well-being. And the EU’s weakened ability to deal with multiple challenges could have negative effects on Finland’s future as well.

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Pirita Näkkäläjärvi languages in basic education to Sámi children and in the Sámi region. This is a right, and it would have never happened without the initiative of their parents. We Sámi are an indigenous people. The borders of the Finnish, Norwegian, Swedish and Russian nation states divided up the Sámiland. Our culture, language, history and worldview are distinct from the majority populations. In Finland, we speak Northern, Inari and Skolt Sámi languages.

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Our parents are the heroes of this story. They fought to ensure that we have an opportunity to learn how to read and write in our mother tongue, and to receive tuition in Sámi. When the basic education was established in the 1970s, legislation was passed to organise teaching of the Sámi language–if parents so demanded. Due to anti-Sámi sentiments and racist undertones in Finland, it required a lot of courage to demand Sámi-language teaching for your child. Since then, the development of the teaching has been a joint effort of parents, teachers, Finnish authorities, and the Sámi parliament. When I was eight years old in 1986, my cousin and I

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Finland leads the climate charge in the Arctic Council

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Clara Young, OECD Observer

Marine experts in Tornio, northern Finland, drill holes on 5 February 2016 in the sea-ice and inject dye into the water to study how it flows, to model how an oil spill would behave underneath the arctic ice. If you think the ice looks a little greyer in the Arctic, your eyes are not deceiving you. A five-year study by international researchers has found that diesel-engine vehicles, coal-burning factories and other such fossil-fuelled activities spew out soot, which circles around in the cold air before landing on the snow, turning it from white to sometimes black. White ice reflects heat; black ice absorbs it, and this is melting Arctic ice faster than scientists had anticipated. Researchers say that this soot, otherwise known as black carbon, may account for a half a degree Celsius of Arctic warming. And when the north warms up, the rest of the planet pays.

The Arctic Council, comprising eight circumpolar states including Finland, the US and Russia, has zeroed in on

The Arctic Council’s emphasis on the environment owes much to Finnish foresight reducing black carbon. “Throughout its chairmanship, Finland has dedicated most of its efforts on implementing the Council’s framework programme on black carbon and methane,” writes Timo Koivurova, who is director of the Arctic Centre at the University of Lapland. “The Arctic states were able to agree in the 2017 Fairbanks Arctic Council Ministerial Meeting on a collective

political goal to reduce black carbon emissions by at least 25-33% below 2013 levels by 2025.” Targeted reduction of black carbon and other pollutants can cut Arctic warming by 0.2°C by 2050. Black carbon is just one of the many polar issues the Arctic Council weighs in on. Although the black carbon agreement is voluntary, the Arctic Council has succeeded in catalysing legally binding agreements. The same Fairbanks Declaration includes the Agreement on Enhancing International Arctic Scientific Co-operation whereby members have pledged to co-operate on easing access to the Arctic for scientific research. It joins two other binding

agreements ratified by members of the Arctic Council since its founding in 1996: one on marine oil preparedness and response, and another on search and rescue operations in the Arctic. The Arctic Council’s track record in brokering agreements is important. As the polar ice has been melting and the seas opening up, so strategic interest

With activity ramping up, the Arctic needs its peoples and states to co-operate all the more in the Arctic has been intensifying. There is the commercial promise of shipping routes, fishing, and oil and gas exploration, and military interests too. In fact, compared to the Antarctic, which is protected by the Antarctic Treaty signed in 1959, the Arctic is more or less up for grabs. And as the highest-level multilateral institution in the far north, the Arctic Council will have its hands full keeping members co-operative. The body now accommodates 13 official nonArctic Observer states, including France, China and India, and the number is sure to grow. The Arctic Council’s emphasis on the environment owes much to Finnish foresight. “Finland invited the seven other states (Canada, Denmark, Iceland, Norway, Sweden, the US and the USSR) with territories above the Arctic Circle for negotiations that ultimately led to the adoption of the Arctic Environmental Protection Strategy (AEPS) in Rovaniemi, Finland in 1991,” Koivurova remarks. This led to the founding of the Council five years later. Since then, Finland has twice served as the chair of the Arctic Council, which rotates among members every two years. The first time was from 2000 to 2002. Its second chair ends May 2019, after which the gavel will be passed on to Iceland. The Arctic Council makes no forays into security concerns, but by setting

this aside, it has been able to broker agreements and push research on matters like telecommunications infrastructure, biodiversity and health and mental well-being in Arctic communities. One of Finland’s priorities during this second chair is tackling climate change. It organised the Arctic Resilience Forum in September 2018, during which participants in the region worked on practical ways to increase resilience to risks posed by climate change. Finland has also pressed for greater meteorological co-operation between the Arctic states and the World Meteorological Organization to achieve more accurate climate scenarios.

country members–they are Permanent Participants–they help shape the agenda. The Council’s unique hybrid structure and history of working together has produced important Arctic norms in the past 23 years. But with activity ramping up, the Arctic needs its peoples and states to co-operate all the more. What the Arctic Council has accomplished so far is, hopefully, just the tip of the iceberg of what is to come.

Finland is also leading important work on methane, and raising global awareness that black carbon has a strong warming impact. Curiously, black carbon levels are not regulated under the UN climate change regime whose purview is over molecules like CO2 that linger in the earth’s atmosphere for a long time. In contrast, a particle of soot stays in the atmosphere for a much shorter time–about a week–and is regulated by air pollution laws instead. Yet, the effect of soot on Arctic ice so profoundly influences global warming that black carbon may be included in future commitments on nationally determined contributions under the Paris Agreement. Following the 2017 Fairbanks Declaration, the Arctic Council is now preparing another set of recommendations to be presented to foreign ministers in May 2019.

Baylor University, “Fossil fuel combustion is the main contributor to black carbon around Arctic.” ScienceDaily. 20 February 2019. www.sciencedaily.com/ releases/2019/02/190220121935.htm

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Further reading Read more about the Arctic Council at https://arctic-council.org/ Read the Agreement on Enhancing International Arctic Scientific Co-operation at https://oaarchive.arctic-council.org/handle/11374/1916

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The Arctic Council’s influence goes beyond the far north, since the 13 observer-status countries may also undertake black carbon and methane reductions in their own countries. Some are already providing black carbon and methane inventories and reporting on their black carbon reductions. Some six indigenous organisations also sit on the Arctic Council. Although these actors do not have the same status as

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OECD Observer No 317-318 Q1-Q2 2019

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When the going gets easier

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Harri Pursiainen, Permanent Secretary, Ministry of Transport and Communications of Finland

Digitalisation, climate change and urbanisation are changing our lives and forcing us to find new ways to move people and goods. We must cut down on carbon emissions, and make traffic safer and more efficient than before. Digital tools will help us with this. After all, small, wallet-sized devices now enable near-instant data transfer and internet connections all over the world. Mobile phone technology provides us with services we could not even have dreamt of a few years ago.

B as frictionlessly as possible. The Finnish Act on Transport Services regards the entire transport system as a single entity.

transport modes to that of transportation as a service for the customer–hopefully the best one.

It requires all transport service providers to open up their essential data, such as information on routes, stops, timetables, prices, availability and accessibility in a machine-readable form via open interfaces. By sharing data, service providers can use their transportation fleet more effectively in moving goods and passengers.

This is the principle of the new Transport Act.

Today, I would like to see this same, amazing change happen in the transport sector. I believe that digitalisation enables us to transform our transport sector into a sustainable, customer-centric mobility system that is more efficient.

The act also requires transport service providers to have compatible systems and grant each other access to their ticket and payment system interfaces. The government has given service providers an incentive to do this by making interoperability a criterion for public procurement. Service providers can sell customers tickets for other transport modes–a train vendor can sell you a train as well as the bus ticket you need to get to your destination from the train station, for instance. This makes going from A to B as easy and user-friendly as possible. Called Mobility as a Service or MaaS, this shifts the notion of transportation from a traditional one of separate, autonomous

From data to new services Data is key to changing our transportation system and Finland’s new landmark transport legislation is paving the way. Finland is the first country in the world to use legislation in such a way as to mesh together all different transport modes from taxis and city trams to long-distance trains and bike shares so that users can get around and transport goods from A to

Most parts of the act entered into force in July 2018, and so far, it has largely met our expectations. In keeping with the data regulation in the act, mobility service providers have opened up a large number of interfaces for exchanging essential data and the opening of sales interfaces has also started. According to feedback from operators, new services and systems have been actively developed: we are witnessing a promising start. Mobility as a Service (MaaS) makes it easier for people and goods to move around, but it will also cut down on carbon emissions. This new system transforms mobility into a travel chain that combines public transport with private mobility services in a way that is user-driven, cost-efficient, attractive and sustainable. Why sustainable? Because a system that makes it easy to get from A to B by using

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Housing first: How Finland is ending homelessness a combination of, for instance, metro, shared bike and taxi is an attractive alternative to driving your own car. Moreover, this system encourages users to choose transport options with the lowest emissions by making it the easiest and cheapest way to travel.

Juha Kaakinen, CEO, Y-Foundation

MaaS can be a viable solution in rural areas too. Several interesting pilot projects are tackling the challenge of combining

Mobility as a Service makes it easier for people and goods to move around, but it will also cut down on carbon emissions rides and transport in collaboration with public and private transport operators. Have a look at the Open Arctic MaaS project in Lapland as well as the Alpio project. Both experiment with different ways of organising mobility services in less densely populated areas.

Although what has been described here is a local, Finnish solution, the challenges we face are global. So should the solutions. I am confident that we can find common ways and best practices–the OECD’s horizontal project on digitalisation has proven that in many fields undergoing digital disruption. We need to have the courage to change the way we do the most fundamental things, even if it might not please everyone. In the history of transport, many things we now take for granted started out as radical, daring ideas. References and links Visit https://maas.global/ Visit www.lvm.fi/en/home Share article at https://oe.cd/obs/2yF

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Do we dare take a holistic view? Legislation is only one part of the solution. It can enable change but, alone, it is not enough to make it truly happen. That requires co-operation between public and private operators, as well as among different industries and levels of government.

It was seven years ago when Arvo (not his real name) first walked into this building. Back then, it was a hostel for homeless men run by the Salvation Army and had a certain reputation. Arvo can still remember opening the door to his dormitory. There were three men sitting on their beds, their faces sullen and melancholy. This would be his new home for a while. Arvo had been down and out already for a while, staying with some of his few remaining friends and occasionally hanging around in public places, stations and staircases. His ex-wife and their

daughter were now just a fading memory. Staying at the hostel was better than nothing, but hardly more than that. Today, Arvo is opening another door– except this time it is to a rental flat of his own. It’s still the same building but it has been converted into independent rental flats, completely renovated and new. The building is well-located in the city. And while the flat is not big, it has everything Arvo needs, like kitchen facilities and bathroom, and an affordable rent. When Arvo moved in, he barely slept the first few nights. He kept expecting someone to come in without knocking on the door.

But no one came, it is now his home, his kingdom. Since moving in, Arvo seldom drinks anymore–he doesn’t want to run the chance of losing his home. Tomorrow is a big day: he has a job interview. Maybe this time he’ll be in luck on the work front too. He feels hopeful, there are reasons to live, and still a future for him. Arvo’s is just one of many stories at Alppikatu 25, a supported housing unit in Helsinki, which now has 81 rental flats for long-term, homeless people. Built in 1936, the building was completely renovated in 2012 at a cost of €9.2 million,

An important lesson we have learned during the last 10 years is that you can’t have Housing First without actually having housing first financed by a 50% investment grant from the Housing Finance and Development Centre of Finland. It provides independent apartments, common facilities and on-site support for tenants. Alppikatu 25 is a kind of a flagship for Finland’s new policy to end homelessness. It illustrates the aspirations and concrete measures of the National Programme to End Long-term Homelessness (PAAVO), which was started in 2008. One of PAAVO’s cornerstones is the strategy of replacing temporary accommodation with permanent housing based on rental contracts. This has fundamentally changed the structure of services and housing solutions available for homeless people. In our thinking, people living in temporary shelters and hostels are still homeless. Only permanent housing can provide a safe, sustainable solution to homelessness and a foundation for a decent life. The change in the service structure has been quite dramatic. In 2008, there were

almost 600 beds in shelters and hostels in Helsinki. Now there is only one permanent service centre for emergency accommodation with 52 beds (in winter time extra temporary accommodation is provided if needed). An important lesson we have learned during the last 10 years is that you can’t have Housing First without actually having housing first. This means providing independent, permanent rental flats unconditionally and with support if it is needed and wanted. It is also important to provide different housing alternatives. Most homeless people prefer an independent flat in scattered housing. Others prefer living in their own rental flats in a more communal structure with in-house support. This may be because they fear the isolation and loneliness of scattered housing, or their support needs are intensive. In recent years, Finland has been one of the few countries where homelessness has decreased. The Finnish success has been explained by this national strategy, targeting the most vulnerable, long-term homeless people. Even more important has been the way in which PAAVO was nationally implemented. Co-ordinated by the Ministry of Environment, these programmes have been carried out in wide partnerships between ministries, cities and civil society groups. The work is carried out together according to mutual agreements and plans with shared financial responsibility of the state and cities. In 10 years, over 7,290 homes have been provided for homeless people. All possible channels have been used: scattered flats bought on the private market, rental flats from social housing and new supported housing flats built or renovated in housing units. The role of affordable social housing has been crucial as this housing stock is also the most important structural measure of homelessness prevention.

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In 1987, there were 1,370 homeless families and 17,110 single homeless persons in Finland. Compare that to the

The Finnish example shows that homelessness is not a law of nature latest tally (2017): 214 homeless families and 6,615 single homeless persons of whom 5,528 are living temporarily with friends or relatives. We can’t be sure that the numbers will continue to go down, but we know that it is possible with continuous, determined work. The Finnish example shows that homelessness is not a law of nature. It is possible to decrease and even end homelessness. It is a question of recognising housing as a basic human right and having a determined government who will lead the way. Reference Learn more about the Y-Foundation at https://ysaatio.fi/en/housing-first-finland Share article at https://oe.cd/obs/2yG

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The secret to Finnish education Andreas Schleicher, Director, OECD Directorate for Education and Skills

Some argue that this unusual trust-based culture makes it impossible to derive any real lessons from Finland. But that trust is at least as much the fruit of policy decisions as it is a cultural pre-condition. The respect teachers have historically enjoyed in Finland creates a solid base on which to build reforms, as well as creating a virtuous circle of productive

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Finland has turned teaching into a sought-after career with high social status

Relaxed learning environment at Helsinki University Library Finland has consistently been one of the most successful countries in global education rankings. For some, its name has become synonymous with educational excellence. While Finland is not alone in achieving world-class educational standards, what makes the country unique is that all of its schools are, effectively, elite schools: performance differences between Finnish schools account for just 5% of the total variation in student performance. This means parents can rely on quality schooling wherever they enrol their children. The Finnish system is based on the assumption that all students can succeed, irrespective of their social background, and that all schools, no matter where they are located, should be of high quality. Finland also shows that there are different paths to success. This is a system where students spend less time in school than in many of the highly competitive Asian systems. Finnish schools also tend to assign little homework and no longer have to undergo school inspections. Finland has turned teaching into a sought-after career with high social

status. It is difficult to get into teacher training courses, which are in high demand. In fact, only about one in ten applicants is accepted on average. Those who don’t succeed often turn to law or medical school instead, which indicates the prestige of the teaching profession. It is a job for people with master’s degrees, appealing to the brightest graduates. Once teachers are deployed to schools, they are expected to continuously upgrade their skills– professional development is compulsory. While not particularly highly paid (per-pupil budgets and teachers’ salaries are mid-range, by European standards), teaching is seen as an important and well-respected profession, and teachers are trusted and given great independence. The significant investment Finnish leaders make in the professional development of their teachers is a critical part of the equation. Prospective teachers undergo rigorous preparation and, once certified, are given exceptional decision-making authority over things like curriculum and assessment. Finnish teachers command the same level of trust and autonomy that professionals in other fields do, such as medicine or law.

and innovative learning environments. The government’s trust, coupled with teachers’ status as university graduates from highly selective programmes, empower teachers to pursue their profession in ways that deepen the trust accorded them by parents and others in the community. In turn, the high level of policy coherence, meaning that decisions will be followed through across electoral cycles and political administrations, reinforces the trust Finnish teachers have in their education leaders. Finland’s success in education did not happen overnight: it took many decades to achieve. It slowly and deliberately built itself into an education superpower through a series of reforms and in response to changing economic needs. In the late 1960s, shortly before Finland joined the OECD, there was a decision to move to a comprehensive system, making high-quality education available to all students, not just to the few selected for grammar schools. Implementation was not complete until the late 1970s. To make the transition successful, and to allay concerns about the changes, there was an accompanying drive to significantly improve the quality of teaching, notably by transferring teacher training to the universities and making it much more rigorous. The economic context also served as impetus for change. In the early 1990s, Finland lurched into a deep recession. Unemployment figures reached nearly

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FINLAND

Finland’s mental health challenge 20%, GDP was falling and public debt rising. Education offered a means of reshaping Finland’s economy, with a shift away from old industries such as pulp and rubber towards technology and the growing global market in telecommunications. The number of Finns

Finland slowly and deliberately built itself into an education superpower through a series of reforms and in response to changing economic needs working in research and development grew rapidly, in tandem with the rise of companies such as Nokia, which went from a 19th-century pulp-mill business to becoming one of the biggest names in mobile phones in the late 20th century, and now a 21st-century leader in telecommunications systems.

Emily Hewlett and Kate Cornford, OECD Directorate for Employment, Labour and Social Affairs At some point in just about everyone’s life, we are affected by poor mental health. In the EU, an estimated one in every six people experience a mental health problem. In Finland, which has the highest estimated incidence of mental disorders in the EU, close to one in five are affected. Mental illness has a high economic cost–the cost of treatment, social security programmes, lower employment and lost productivity add up to a total average of 4% of GDP in EU countries. In Finland, it is higher still: an estimated 5.3% of GDP in 2016. What is mental health? When we talk about good mental health, we mean someone who can cope with

the normal ups and downs of life, work productively, and contribute to their community. On the flip side, mental illness is the loss of mental health, and of that ability to cope. In Finland, like in other EU countries, the most common mental disorders are anxiety and depressive disorders, which affect 4% and 6% of Finns, respectively. Drug and alcohol use disorders also affect 4% of the Finnish population– well above the EU28 average of 2.4%. These illnesses, along with conditions such as bipolar disorder or schizophrenia, which typically affect a smaller number of people–around 1-2% of the population–can affect people for only a short time, like a couple of weeks

Suicide is an area on which Finland has had remarkable success, thanks to a concerted policy effort over the past 30 years

And yet, at a time when the kinds of things that are easy to teach and test have also become easy to digitise and automate, the Finnish school system faces important challenges. Over the last decade, Finland has slipped on the OECD’s Programme for International Student Assessment (PISA) rankings, both in absolute terms but also because other education systems, notably in Asia, have rapidly improved. Moreover, as successful as Finnish schools are, youth unemployment is high, signalling that Finland needs to work harder to realign its education system with a rapidly changing world. Given Finland’s track record of change, there is good reason to hope that in the digital age, it can aim for top of the class again. References and links

For more information on the OECD’s Programme for International Student Assessment (PISA), visit www.oecd.org/pisa Share article at https://oe.cd/obs/2tE

©Sylvie Serprix

OECD (2018), Education at a Glance 2018: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/eag-2018-en

OECD Observer No 317-318 Q1-Q2 2019

Bipolar disorders and schizophrenia

Others

18 .5

17 .5

16 .7

14 .8 14 .3

15 .2 15 .1 14 .9

15 .7 15 .5 15 .4

17 .3 17 .0 16 .9 16 .9

17 .7 17 .7 17 .7 17 .6 17 .3

17 .9 17 .9

18 .8 18 .6 18 .5 18 .5 18 .4 18 .3 18 .3 18 .3 18 .0

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Ne Fin th lan er d lan Fr ds an Ire ce l Po and rtu Es gal to n Sp ia Sw ain ed en

y ia K e ia rg 8 ia ta ly rk ia ia ry p. p. d ia ia an an ium U reec ustr bou EU2 atv Mal Ita ma ven roat nga . Re . Re olan lgar an L n lo C u ak ch P u om rm ithu Belg G A em e B R H v ze De S G L x o Sl C Lu

http://dx.doi.org/10.1787/888933833920

Source: OECD/EU (2018): Health at a Glance: Europe 2018

this progress, about 750 Finns still 100 die every year from suicide. The gap 80 in mortality rate between the general 60 population and those diagnosed with 40 a mental disorder, of which suicide is 20 0 one driver, is significant. Finland has established a new National Mental Health Strategy, which includes €300,000 for suicide prevention, but there is room for more investment in mental health, if only to further reduce the high costs of these illnesses. The good news is that more people are talking about mental health in OECD

OECD/EU (2018), Health at a Glance: Europe 2018: State of Health in the EU Cycle, OECD Publishing, Paris/EU, Brussels, https://doi.org/10.1787/health_glance_eur-2018-en OECD (2015), Fit Mind, Fit Job: From Evidence to Practice in Mental Health and Work, Mental Health

160 and Work, OECD Publishing, Paris, 140 https://doi.org/10.1787/9789264228283-en 120 100 OECD (2014), Making

Mental Health Count: Social and Economic Costs of Neglecting 60 Mental Health Care, OECD Health Policy Studies, 40 OECD Publishing, Paris, 20 https://doi.org/10.1787/9789264208445-en

80 The

Patel, Vikram, et al. (2018), “The Lancet Commission on global mental health and sustainable development”, The Lancet, 2018 vol: 392 (10157) pp: 1553-1598, https://doi.org/10.1016/S0140-6736(18)31612-X 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16

160 140 Despite 120

References and further reading

With suicide rates particularly high 8 men, policies reached out to among vulnerable young men with campaigns 6 like “Time out! Back on track” (Aikalisä! 4 Elämä raitelleen). Has this strategy had 2 any effect? Interestingly, between 1986 0 and 2016, antidepressant consumption– an admittedly crude measure of mental health treatment rate–increased 13-fold, with much of the increase in the first 20 years. Consumption has stabilised over the past decade or so.

countries. This is a major step forward in reducing the stigma around mental illness, and helping people get the support and treatment they need and deserve. But more work needs to be done in Finland and the rest of the OECD to prevent the onset of mental illness, improve the lives of those living with mental ill-health, and prevent premature mortality linked to mental disorders.

set up an online Mental Health Hub, which provides therapies such as cognitive % behavioural therapies for low-threshold 14 disorders, for the whole of Finland. 12

20 05

Preventing and treating mental illness One reason for this success is that, rather than focusing only on preventing suicide, Finland chose instead to broadly improve its mental healthcare. The government focused on drivers of suicide, like depression, poor access to mental healthcare, substance and alcohol abuse, and access to lethal means. Finland also

Alcohol and drug use disorders

Figure at top of each column = % total

20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16

In 2015, every six minutes someone died from mental illness-related events or suicide in EU countries. In the same year, roughly nine young people between the ages of 15 and 24 died each day from suicide in EU countries. In fact, suicide is an area on which Finland has had remarkable success, thanks to a concerted policy effort over the past 30 years. Starting in the 1980s, Finland embarked on a series of national suicide strategies. The government established crisis phone lines, and gave the media guidance about how to report on suicide by recommending, for example, that information on the method of suicide not be included in news stories. Lastly, the government focused on improving treatment for mental illness. These efforts helped bring down Finland’s overall suicide rate by over 50%.

Depressive disorders

Anxiety disorders % 20

R JP N HU N PO L SV K KO R US A CH L CZ E IS R NO SV R N LU CA X N LT U NZ L ES T CH E IT A LV A GB R DN K NL D AU S PR T AU T SW E BE L FR A DE U ES P IR L FI N

Mental illness affects absolutely everyone, rich and poor, male and female, young and old. However, some population groups are particularly vulnerable to mental ill-health. For instance, the two most common mental disorders–anxiety and depressive disorders affecting, respectively, 5.4% and 4.5% of the EU population–are more common among women. Conversely, drug and alcohol disorders, which are the third most common mental disorder and affect 11 million people in the EU, are twice as likely to affect men. Socioeconomic status also plays a part. In Finland, men in the lowest income group are nearly five times more likely than men in the highest income group to report chronic depression.

More than one in six people in EU countries have a mental health problem

or months, but can also affect their whole life.

20 05 20 06

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Patana, Pauliina (2014), “Mental Health Analysis Profiles (MhAPs): Finland”, OECD Health Working Papers, No. 72, OECD Publishing, Paris, https://doi.org/10.1787/5jz1591p91vg-en

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Finland’s cautious path to OECD membership Peter Carroll, Tasmanian School of Business and Economics, University of Tasmania degrees of initial resistance among existing members, in Finland’s case it was the strong opposition to its membership from the Soviet Union, a non-OECD country, that led to a drawn-out process.

©LE MADEC for OECD

Finland, which shares a 1,340 km border with its large neighbour, found itself in a challenging, constrained position as the Soviet government made it clear that it would see Finnish participation in the Marshall Plan and the OEEC as a hostile act. Hence, the Finnish decision not to apply for membership of the OEEC on its founding, though it was able to provide the organisation with detailed information on its economy from the outset.

Finland prepares to join: OECD Secretary-General Thorkil Kristensen (right) welcomes Tankmar Horn, Undersecretary of State, Finnish Ministry of Foreign Affairs.

Finland marks its 50th anniversary as an OECD member country on 28 January 2019. Though not a founding member when the OECD commenced in September 1961, Finland’s interest in joining was never in doubt. However, it adopted a cautious approach.

which were administered by the OECD’s predecessor, the Organisation for European Economic Co-operation (OEEC). However, it was not until some 20 years later, in 1967-1968, that Finland finally applied, successfully, for membership of the OECD.

As early as 1947-1948, and again in 1957-1958, the Finnish government had already shown interest in Marshall Plan funds for rebuilding post-war Europe,

Unlike Japan (which joined in 1964), Australia (1971) and New Zealand (1973), where accession was delayed for a mix of domestic reasons and varying

As the 1950s went by, successive Finnish governments also gradually and cautiously developed a closer relationship with the OEEC, supported by Sweden, Norway and Denmark, determined to ensure its economy was not disadvantaged by the growing economic integration of Western Europe. The work of the OEEC was driven, as is still the case at the OECD, by a range of expert policy committees that focused on current and developing issues, work attractive to Finnish governments. In 1956, Finland was invited to send an observer to the OEEC’s Pulp and Paper Committee, then its Maritime Transport Committee, followed by the Timber Committee in 1959. Finland also entered into a series of trade-related agreements with most OEEC members, particularly the Helsinki Club Protocol, signed in July 1957. In January 1958, President Urho Kekkonen instructed the Finnish ambassador in Paris to look formally into the conditions for joining the OEEC. A working party was established and, in addition, informal, largely fruitful discussions were held with key OEEC members to ensure their support for Finnish membership. The working party concluded that Finland

could meet the obligations of membership and the OEEC Council gave the green light for its accession. The Soviet government took a different view. A continuing fall in Finnish purchases of Soviet goods, combined with Soviet opposition to Finland’s new government under Social Democrat Karl-August Fagerholm, led to the Night Frost Crisis of 1958, so-called by Nikita

In Finland’s case it was the strong opposition to its membership from the Soviet Union, a non-OECD country, that led to a drawn-out process Kruschev to depict how cold their relations had become. Moscow froze diplomatic exchanges with Helsinki and pressurised the government to resign. The Fagerholm cabinet collapsed and so the push for OEEC membership stalled. The new OECD continued to attract Finnish interest; Finland became an observer at the Machinery Committee, then Industry Committee in 1962, followed by other committees, so much so that in November 1965 some delegates raised the question of the extent to which a non-member should be allowed to participate as an observer without the

obligations of full membership. So, when the Finnish government expressed a desire to participate in OECD’s Economic Committee work in 1966, the SecretaryGeneral suggested that it seek full or associate membership. Once again, discussions regarding membership commenced, in a generally favourable environment, given the earlier green light signalled by the OEEC and Finland’s close relationship with the European Free Trade Association (EFTA). Importantly, there was no initial opposition from the Soviet government then, but it adopted a more negative stance as negotiations developed, deriding the OECD as a closed group of Western countries with close ties to NATO. However, the emergence of the European Economic Community (EEC) and EFTA meant that the OECD no longer attracted the same degree of Soviet opposition as had the OEEC. Moreover, it is likely that at this time the Soviets did not want to run the risk of destabilising the rising tide of détente and the progress being made toward a multilateral, European security conference that reached fruition in the 1970s. On 7 June 1968 the Finnish government decided formally to seek accession and detailed discussions ensued. It had some reservations to sections of the OECD’s Codes of Liberalisation of Current

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A SHORT HISTORY

Invisible Operations and Liberalisation of Capital Movements, as was the case with most OECD members, and these were soon resolved. Finland ratified the OECD Convention and became a member country on 28 January 1969. A slow and cautious process had come to a successful conclusion. The article draws upon material kindly made available by the OECD Library and Archives; Balázs Gyimesi of the OECD Observer assisted. References Carroll, Peter (2017), “Shall we or shall we not? The Japanese, Australian and New Zealand decisions to apply for membership of the OECD, 1960-1973”, in Matthieu Leimgruber and Matthias Schmelzer (eds.), The OECD and the International Political Economy since 1948, Palgrave Macmillan. Carroll, Peter and William Hynes (2014), “Japan and the OECD: how the sun rose on a global era”, OECD Observer No 298, at https://oe.cd/wI Carroll, Peter and Aynsley Kellow, (2011), The OECD A Study of Organisational Adaptation, Edward Elgar Ltd, Cheltenham and Massachusetts Jensen-Eriksen, Henri (2004), “Market, Competitor or Battlefield? British Foreign Economic Policy, Finland and the Cold War, 1950-1970”, a doctoral thesis at the London School of Economics and Political Science Majander, Mikko (1994), “The limits of sovereignty”, Scandinavian Journal of History, 19:4, 309-326 Yamamoto, Takeshi (2007), “The Road to the Conference on Security and Co-operation in Europe, 1969-1973: Britain, France and West Germany”, a doctoral thesis at the London School of Economics and Political Science

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Finland in the OECD Observer: A selection from the archives Finland, the new member of the OECD Among the nations which are already members, Finland occupies a unique position: although she has not reached the same level of industrialisation as many of them (the primary sector employs 27% of the labour force and accounts for 16% of domestic production), the country enjoys a relatively high level of income. Gross national product per capita (at market prices), which is expected to reach the equivalent of about US$1700 for 1968, lies between that of Austria and that of the Netherlands, and Finland has assets which should make further development easier than it would be for many other countries at a similar level of industrialisation: universal literacy, one of the highest university and technical school enrolments in Europe, a well developed infrastructure of medical and other social services and at the same time an adequate supply of manpower. Finland has another important advantage. Instead of having to proceed from a primary base that is solely agricultural, the country has forests–more than two-thirds of the land is covered by them–and wood processing involves sophisticated techniques, both mechanical and chemical, hence a highly skilled work force. It is largely around its forests that Finnish industry has grown. “Finland, OECD’s new member country”, in OECD Observer No 39, April 1969

Spotlight on Finland: Its economy The Finnish economy has performed remarkably well for a decade. GDP growth has consistently been somewhat better than the OECD average. Unemployment has remained relatively stable at around 5%, well below the OECD and European averages. Inflation has been roughly in line with the rest of Europe, serious external imbalances have been avoided and the public debt has remained low.

“Spotlight on Finland: Its economy”, in OECD Observer No 152, June/July 1988

Economic crisis and regional development: Why co-operation counts In addition to improving the preconditions for regional development in the long term, the recovery package in Finland also includes rapid and flexible response measures to provide assistance to regions and municipalities that face sudden problems, such as those caused by factory closures, Mari Kiviniemi (picture below), Minister of Public Administration & Local Government, wrote in her contribution to the OECD Observer Roundtable on regional policy in 2009.

“Roundtable on regional policy”, in OECD Observer No 272, April 2009

Finland–Reforming the pension system The Finnish public pension system recently underwent a far-reaching reform, prompted by concerns about the aging of the population, the low effective retirement age of workers and the erosion of the tax base after the slump in the early 1990s. The reform, which is based on a consensus between government, employers and unions, strikes a balance between preserving income security for the elderly and strengthening the link between individuals’ lifetime earnings and pensions. By so doing, the reform is deemed to enhance labour-force participation and career development. There is nonetheless scope for improvement.

“Finland–Reforming the Pension System”, by Paul van den Noord, in OECD Observer No 208, October/November 1997

JUNE 1969

Science rocks Finland took the number one spot in the OECD’s PISA 2006 survey, a comprehensive and much-quoted international yardstick of secondary school student performance. Finland was followed by Hong Kong-China, Canada, Chinese Taipei, Estonia, Japan and New Zealand. After focusing on reading skills in 2000 and on mathematics in 2003–Finland was among the brightest on these occasions, too–PISA 2006 updates these tests, and turns its attention to science. Take this question: The temperature in the Grand Canyon ranges from below 0o C to over 40o C. Although it is a desert area, cracks in the rocks sometimes contain water. How do these temperature changes and the water in rock cracks help to speed up the breakdown of rocks? A. Freezing water dissolves warm rocks. B. Water cements rocks together. C. Ice smoothes the surface of rocks. D. Freezing water expands in the rock cracks.While 67.6% of students got the correct answer (which is D), the future of science is nonetheless a matter of some concern in many countries.

“Science rocks”, in OECD Observer No 264/265, December 2007-January 2008

OECD iLibrary

Focus on Finland OECD Economic Surveys: Finland 2018 The Finnish economy is rebounding strongly after almost a decade of lacklustre economic performance. The revival in global growth and investment, coupled with competitiveness gains, is boosting exports. Consumption remains healthy despite slow income growth, and both business and residential investment are buoyant. Nevertheless, a rapidly ageing population limits the long-term growth, potential and weighs on public finances.

ISBN: 978-92-64-289-734 March 2018, 124 pages €49.00 $59.00 £39.00 ¥6 300

OECD Development Co-operation Peer Reviews: Finland 2017 The review assesses the performance of Finland, including how its commitment to the 2030 Agenda translates into action on the ground and how it can strengthen its partnerships with a view to adopting a wholeof-Finland approach in the face of steep budget cuts.

ISBN: 978-92-64-287-228 December 2017, 112 pages €24.00 $29.00 £19.00 ¥3 100

Energy Policies of IEA Countries: Finland 2018 Since 2016, the International Energy Agency’s (IEA) in-depth country policy reviews focus on key energy security challenges in fastchanging global energy markets as well as on the transition to clean-energy systems. This latest update on Finland’s energy policies therefore offers insights into three special focus areas–bioenergy, transportation, and combined heat and power production.

ISBN: 978-92-64-308-220 November 2018, 174 pages

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BOOKS

All publications available at www.OECD-iLibrary.org Working Together: Skills and Labour Market Integration of Immigrants and their Children in Finland While Finland’s foreign-born population remains small by international standards, growth has been amongst the fastest in the OECD. Finland’s foreign-born population have lower employment rates than native-born Finns, and women, in particular, are struggling to integrate and face incentives to stay in the home. This review provides an assessment of these and other challenges.

ISBN: 978-92-64-305-243 September 2018, 200 pages €40.00 $48.00 £32.00 ¥5 200

Finland: Country Health Profile 2017 The State of Health in the EU country profiles provide a concise and policy-relevant overview of health and health systems in member states, emphasising the particular characteristics and challenges in each country. This report looks at the state of health in Finland.

ISBN: 978-92-64-283-367 November 2017, 16 pages

Making Dispute Resolution More Effective–MAP Peer Review Report, Finland

Investing in Youth: Finland The series Investing in Youth builds on the expertise of the OECD on youth employment, social support and skills. It covers both OECD countries and key emerging economies. The report on Finland presents new results from a comprehensive analysis of the situation of young people in Finland, exploiting various sources of survey-based and administrative data.

ISBN: 978-92-64-497-290 May 2019, 117 pages €30.00 $36.00 £24.00 ¥3 900

International Trade by Commodity Statistics, Volume 2019 Issue 2: Finland, Greece, Iceland, Portugal, Sweden, United Kingdom This reliable source of yearly data covers a wide range of statistics on international trade of OECD countries and provides detailed data in value by commodity and by partner country. The first four volumes of International Trade by Commodity Statistics each contain the tables for six countries, published in the order in which they become available.

ISSN: 22195076 May 2019, 592 pages

OECD Reviews of Innovation Policy: Finland 2017

Under Action 14, countries have committed to implement a minimum standard to strengthen the effectiveness and efficiency of the mutual agreement procedure (MAP). The MAP is included in Article 25 of the OECD Model Tax Convention and commits countries to endeavour to resolve disputes related to the interpretation and application of tax treaties.

Strengthening and lifting Finland’s innovation system out of a period of uncertainty requires a coherent and unified new vision for science, technology and innovation (STI), renewed investment and policy instruments. This vision should be oriented towards renewal tackling societal challenges and developing new knowledge-based competitive advantages at global scale.

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OECD Observer No 317-318 Q1-Q2 2019

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Finnish architecture and design: A natural fit Ruairí O’Brien, Architect

simple and undecorated. Humanity’s work and that of nature are one. Alvar Aalto, a Finnish architect from the last century and a younger member of the old school of early moderns, such as Le Corbusier or Bauhaus founder Walter Gropius, is a stimulating figure that I use in my teaching to explain the importance of holistic thinking to a generation that has been overwhelmed by the false promises of specialisation and virtual visualisations.

©Nick Harrison/Alamy Stock Photo

Aalto and his wife Aino (also an architect whom he met in 1924) worked as a team on several projects together, and in 1935 founded the furniture and lighting firm Artek (www.artek.fi). They believed in holistic thinking, art and technology, small and big, and that the house should be designed “from the doorstep to the living room.”

Finland has a reputation among designers, architects and artists for being a land, a nation, a culture that produces high-quality design and architecture. It tops happiness polls and educational surveys, can produce determined sports champions, and world-class high-tech products and games software, but it also has a relatively high incidence of mental illness and has been battling down its suicide rate. A land of extremes with a wide breadth of emotions, talents and expectations? What is the secret of this small nation’s success? People, their customs and their local habits are often expressions of an existential struggle with the natural settings they are born in. In Finland the extreme cold and darkness of winter, the long days of light in summer, the deep cool lakes, the secretive beauty of the forests, are dramatic character and soul forming elements. Can the Finnish success in the design world be linked to the workings of such poetic forces? Or is it linked to the instinctive strength of character (what Finns call sisu) born out of Finland’s vast lonely expanses and living at a healthy distance from busy European metropoles? In my visits to Finland, Helsinki, Turku, Tampere and Vaasa, I experienced the quiet, humble confidence of these admirable people. Coffee drinking, one of my favourite educational passtimes, provided me with many venues for my research and moments of reflection as I got to know this special land. As a designer I am accustomed to recognising in a space when, in the simplest of ways, harmony and balance can be expressed in the interaction of single elements, producing a sense of whole. Spaces that achieve this level of coherency have no superfluous elements. What I see is a simple, understandable code being used, with nothing redundant in the composition: the trees have leaves in summer, the water is ice in winter, the wood is preferred in natural tones, the light temperature used is warm, the cups

Aalto and Aino believed in the social importance of their profession, developing simple and inspirational works of architecture that the layperson could appreciate and enjoy. They also worked across all the scales, from furniture design to large public buildings. Furniture was not just a marketing vehicle to them, it was an area of design where the human scale and needs could be expressed in unison with natural materials. Aalto experimented with bending wood to form a natural structural entity to seat the human form with minimal waste of materials. In this micro-architectural exercise we witness how humans can tame nature to express being at one with our environment. Aalto’s architecture is an extension, if not a re-interpretation, of the nature around us. The search for the symbiosis between humans, nature and technology is evident in the works he produced. Aalto, who was rational and practical in his thinking process and construction of space, did not shy from using the symbolic and mythological powers of his national spirit. In his famous design for the Finnish Pavilion, for the New York World’s Fair in 1939, Aalto constructed a surging leaning wall of wood, which evoked images of a Finnish forest housing images of Finland in an undulating flowing line that counters the orthogonal line of the supporting service buildings. This is Aalto’s code, simple and complex, soft and hard. Perhaps this is Finland’s code. Another much-loved work of Aalto is his glass vase from 1936. The vase gives us the undulating line he used later in his Finnish pavilion, and which implies capturing dynamic change as the wind moves the face of a forest in the sun or causes ripples in the water of the lakes. Such lines can also be seen in the structure of split rocks or in the grains of cut trees. In small objects and in big architecture, Aalto proves that the complexity of life is hidden in simplicity, for all who look. In the coffee shops, I understood this as I sat on Aalto stools, designer stools that formed part of a bigger Finnish code. Ruairí O’Brien, an architect based in Germany, has worked in Finland. He currently teaches in Cairo. See also “Japan’s radiant architecture”, in OECD Observer No 298, Q1 2014, at https://oe.cd/obs/2Ay

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OECD Observer Finland 50th Anniversary Edition

SPOTLIGHT

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How do you measure

a Better Life? For nearly a decade, the OECD has been working to identify societal progress – ways that move us beyond GDP to examine the issues that impact people’s lives. The OECD’s Better Life Index is an interactive tool that invites the public to share their thoughts on what factors contribute to a better life and to compare well-being across different countries on a range of topics such as clean air, education, income and health. Over five million visitors from around the world have used the Better Life Index and more than 90 000 people have created and shared their personal Better Life Index with the OECD. This feedback has allowed us to identify life satisfaction, education and health as top well-being priorities. What is most important to you?

Create and share your Better Life Index with us at: www.oecdbetterlifeindex.org

The OECD Better Life Index enables you to rate countries according to the importance you give 11 topics. Each petal of the flower represents one topic and the size of the petal the countryâ&#x20AC;&#x2122;s rating for that topic.

Find out more about how life compares in OECD countries by ordering the book Howâ&#x20AC;&#x2122;s Life? Measuring Well-Being. Available now on the OECD Online Bookshop: http://www.oecd.org/bookshop

OECD.ORG OECD Forum

“Fake news is not going anywhere. The money and political incentives are far too great. We need to equip the general citizenry to read and watch content with a critical eye […]” “We need to use artificial intelligence through the lens of human interaction”. “People now recognise that a basic right, which is a right to shelter is at risk […]” “For social activism to achieve its mission, governments need to stop seeing protesters as adversaries and instead as the source for the momentum necessary to create great changes”. These soundbites capture just a flavour of the lively public debate at the 2019 OECD Forum, which took place on 20-21 May (watch the closing highlights

WORLD IN EMOTION

at https://bit.ly/2Kf8zXt). Under the banner of “World in eMotion”, the OECD Forum explored paths forward in an uncertain world where politics, facts and emotion increasingly collide. This edition–the 20th since the OECD Forum started in 2000–brought together some 3,000 people from around the world, including top government representatives, businesspeople, trade union and civil society representatives, academics, journalists and activists from non-governmental organisations.

The OECD Forum offers an opportunity for people to listen and share ideas, and explore ways to forge an agenda for positive action. This year’s speakers included Slovak Prime Minister Peter Pellegrini, climate activist Anuna de Wever, the director of the McKinsey Global Institute Michael Chui, Professor Ruth van Veelen of the University of Utrecht, Mayor Matus Vallo of Bratislava and many others.

Speakers and other participants focused on four main themes: how to forge a new societal contract; integrity and trust; digitalisation and the future of work; and international co-operation.

Read the Forum opening remarks by Angel Gurría, OECD Secretary-General: https://www.oecd.org/forum/oecdforum-opening-remarks-may-2019.htm

For a complete list of speakers, see https://www.oecd.org/forum/

See the list of speakers at https://www.oecd.org/forum/speakers/

Engaging with OECD experts and guest speakers https://bit.ly/327y5nf

©OECD

OECD Forum 20-21 May 2019

OECD.ORG OECD MCM

OECD Ministerial Council Meeting 22-23 May 2019

©OECD

Harnessing digital transition for sustainable development: opportunities and challenges

Step into the light: OECD Secretary-General Angel Gurría (left) and Prime Minister Peter Pellegrini of the Slovak Republic, in a curtain-raiser video focusing on the digital transformation to launch OECD Week 2019 with this. Watch it at https://oe.cd/obs/2Dn

The 2019 meeting was chaired by the Slovak Republic, with Canada and Korea as vice-chairs.

State-owned Entreprises, the revised Codes of Liberalisation, and an OECD Declaration on Public Sector Innovation.

Ministers adopted an OECD Recommendation on Artificial Intelligence, including AI Principles that benefit people and the planet (see page 18). They also adopted an OECD Recommendation on Guidelines on Anti-Corruption and Integrity in

References Step into the Light of the Future at OECD Week 2019 promotional video: https://www.youtube.com/watch?v=jFsXYQY6ebo For more information, key documents, statements and other resources, see www.oecd.org/mcm

©OECD

“Our aim is clear: to grasp the potential of the ongoing digital revolution reshaping our economies and our way of life” said Peter Pellegrini, the prime minister of the Slovak Republic, said in a video to raise the curtain on OECD Week. The digital transformation led discussions on policy challenges at the annual Ministerial Council Meeting (MCM) which took place at the OECD headquarters in Paris, 22-23 May 2019.

From left to right: Nadia Calviño, Spain’s Minister of Economy and Business, Lars Gert Lose, Denmark’s Permanent Secretary of State for Foreign Affairs, Dyalá Jiménez Figueres, Costa Rica’s Minister of Foreign Trade, Kang Kyung-wha, Korea’s Minister of Foreign Affairs

OECD Observer No 317-318 Q1-Q2 2019

OECD.ORG

“Freedom is the holy grail of our democracies. And what could extend our possibilities and freedom more than a digitally interconnected world? On the one hand technology can be liberating […], on the other hand, the inability to disconnect may actually hinder our social and human condition, making us actually less free.” With this policy dilemma, Prime Minister Peter Pellegrini of the Slovak Republic opened the Going Digital Summit, 11-12 March 2018. The event brought high-level policymakers together with a variety of stakeholders in order to discuss the most pressing issues in the realm of digitalisation: the impact of digitalisation on jobs and development; taxation in the digital age and the promises and risks of artificial intelligence. At the summit, the OECD presented the two-year Going Digital Project’s main findings and policy messages, and issued a new publication called Measuring the Digital Transformation, and the Going Digital Toolkit, a new website featuring indicators, evidence, experiences and

©Rights reserved

Digital summit

innovative policy practices around digitalisation. Further reading Learn more about the OECD’s Going Digital project at https://www.oecd.org/going-digital/

Learn more about the Going Digital Summit at https://oe.cd/2CRead the report, Measuring the Digital Transformation, at https://oe.cd/pub/2Dl

“Subnational governments today are also the localised ‘face’ of government that citizens interact with most […] they have an increasingly crucial role in responding to the general trend of declining trust” said OECD Secretary-General Angel Gurría during the opening of the Conference of the World Observatory on Subnational Government Finance and Investment, 17 June 2019. Local governance is increasingly affecting global affairs, increasing the need for conclusive data on subnational governments. The World Observatory on Subnational Government Finance and Investment, a joint endeavour led by the OECD and United Cities and Local Government (UCLG), aims to ensure standardised and reliable access to data on subnational governments, support dialogue and decision making on multi-level governance, and serve as a capacity-building tool for local governments. The conference showcased the World Observatory’s 2019 report, featuring the largest quantitative and qualitative data collection to date on multi-level governance and finance, encompassing over 120 countries. Learn more about the World Observatory on Subnational Government Finance and Investment at https://oe.cd/WorldObs

©OECD/Hervé Cortinat

Local governance and finance

Jacinda Ardern, Prime Minister of New Zealand visited the OECD on 14 May as part of the Christchurch Call To Action Summit. The Summit, which took place in Paris, France brought together 10 heads of state and government as well as leaders of digital technology companies with a commitment to eliminate terrorist and violent extremist content online in the wake of the Christchurch tragedy on 15 March. Prime Minister Ardern also visited the Élysée Palace, and held a joint press conference with French President Emmanuel Macron.

OECD.ORG

Recent speeches by Angel Gurría 2019 Ministerial Council Meeting

©OECD/Julien Daniel

Opening remarks delivered in Paris, France, 22 May 2019

Ambassadors Australia

Mr Alexander Robert William Robson

Opening of High-Level Dialogue with Africa

Austria Mr Thomas Schnöll

Remarks delivered in Paris, France, 21 May 2019

Belgium

Mr Jean-Joël Schittecatte

2019 OECD Forum: Launch of the Economic Outlook

Canada

Ms Sharon Armstrong Chargée d’Affaires a.i.

Chile

Mr Felipe Morande

Remarks delivered in Paris, France, 21 May 2019

Czech Republic Mr Petr Gandalovič Denmark

Mr Carsten Staur

Estonia

Mr Alar Streimann

Launch of Measuring Distance to the SDG Targets

Finland

Mr Toumas Tapio

Remarks delivered in Paris, France, 20 May 2019

France

Ms Catherine Colonna

Germany

Mr Martin Hanz

Greece

Ms Rania Antonopoulou

OECD Forum 2019

Hungary

Mr László Turóczy

Opening remarks delivered in Paris, France, 20 May 2019

Iceland

Mr Kristjan Andri Stéfansson

Ireland

Mr Dermot Nolan

Israel

Mr Eli Emanuel Lev

ILO Centenary Celebration

Addressing the Hidden Dimensions of Poverty Conference

Italy

Mr Alessandro Busacca

Remarks delivered in Geneva, Switzerland, 14 June 2019

Remarks delivered in Paris, France, 10 May 2019

Japan

Mr Hiroshi Oe

Korea

Mr Hyoung Kwon Ko

G20/OECD Seminar on Corporate Governance in Today’s Capital Markets

The European Union: A People-Centred Agenda – An International Perspective

Latvia

Ms Ivita Burmistre

Remarks delivered at G20 Finance Ministers and Central Bank Governors Meeting, 8 June 2019

Remarks delivered in Brussels, Belgium, 6 May 2019

Lithuania

Ms Lina Ramanauskaite Chargée d’Affaires a.i.

Luxembourg

Ms Martine Schommer

G7 Environment Ministers’ Meeting

Mexico

Mr Víctor Manuel Uribe Chargé d’Affaires a.i.

OECD Code of Liberalisation of Capital Movements

Remarks delivered in Metz, France, 6 May 2019

Netherlands

Mr Guido Biessen

New Zealand

Ms Jane Coombs

Norway

Mr Per Egil Selvaag

Poland

Mr Aleksander Surdej

Portugal

Mr Bernardo Lucena

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/

Remarks delivered at G20 Finance Ministers and Central Bank Governors Meeting, 8 June 2019 G20 High-level Symposium on Aging and Financial Inclusion (GPFI Forum) Remarks delivered in Tokyo, Japan, 7 June, 2019 G7 Conference on Competition and the Digital Economy Closing remarks delivered in Paris, France, 3 June 2019

Presentation of the OECD Financing Climate Futures report Remarks delivered in Mexico City, Mexico, 2 May 2019 Forum on Responsible Mineral Supply Chains Remarks delivered in Paris, France, 23 April 2019 Adapting to the Digital Transformation Remarks delivered in Tokyo, Japan, 16 April 2019

Launch Ceremony for the Adoption of the OECD Recommendation on Artificial Intelligence

OECD Going Digital Summit: “The Promises of Digital Transformation”

Remarks delivered in Paris, France, 22 May 2019

Remarks delivered in Paris, France, 11 March 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 Rupert Schlegelmilch April 2019

OECD Observer No 317-318 Q1-Q2 2019

OECD.ORG

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 MARCH 7

OECD Conference on Gender Equality in Business

8-16 SXSW Conference, Austin, US

JULY

11-12 OECD Going Digital Summit

1-2

OECD Committee on Digital Economy Policy Meeting

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

G7 Education and Development Ministers’ Meeting

Launch of Going for Growth 2019

Launch of OECD Economic Surveys: Austria 2019

20-21 Global Anti-Corruption & Integrity Forum MAY 15

Launch of Measuring the Distance to SDG Targets

16 -18 Viva Tech Conference 20-21 OECD Forum 2019 21

JUNE 3

Conference on competition and the digital economy

8-9

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

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

7-8

OECD Expert Group on the Economics of Public Health

OECD Forum on Trust in Business

Launch of Environment at a Glance 2019

6th Forum on Green Finance and Investment

4th Business at OECD Forum on Health

NOVEMBER 7-8

OECD Working Party on Health Care Quality and Outcomes

11-22 COP25 - Conference of the Parties to the UN Convention on Climate Change, Chile 20

Launch of the OECD Economic Outlook

22-23 2019 Ministerial Council Meeting

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

OECD Conference on Child Well-being

SEPTEMBER

25-28 OECD Eurasia Week 2019

1-2

Japan G20 Employment Ministerial

Launch of Education at a Glance 2019

Green Growth and Sustainable Development Forum

OECD Policy Forum on Blockchain

Launch of Pensions at a Glance 2019

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

DECEMBER

19-20 Business at OECD ELSA Strategy Meeting

Launch of OECD PISA 2018 Initial Results

24-25 Latin American and Caribbean Competition Forum

5-6

Global Forum on Competition

Trade Union Advisory Committee Meeting

OCTOBER

11-12 26th Session of the OECD Health Committee, Business at the OECD

Business at OECD/OECD Joint Conference on Higher Education

BOOKS OECD iLibrary

Artificial bias As the world becomes more digital, typical social values are applied to new contexts. This can lead to complications. For example, how can one ensure fairness within the framework of artificial intelligence (AI) systems? The advantages of AI are clear: AI increases productivity and innovation, and makes data and predictions more accurate and less expensive. AI technologies are already in use in fields from medicine to finance. However, as AI spreads, it runs the risk of engraining gender and racial biases into its actions and results.

After all, AI relies on humans, warts and all. Machine learning algorithms interpret the data that they are given and can emulate prejudiced patterns with which they are presented, such as gender or racially skewed data. Such continued biases reinforce moral and ethical dilemmas, limiting the current opportunities for AI. AI systems should be neutral if they are to grow further, but they can only be as unbiased as their programmers make them. Thus, it will take conscious efforts to resolve these issues while maintaining the benefits of new technologies.

recommendations through the lens of seven policy dimensions: access, use, innovation, jobs, social prosperity, trust and market openness. In doing so, it provides strategies for the realisation of a just and inclusive digitalisation.

The growth and development of data and digital technologies such as AI are the focus of Going Digital: Shaping Policies, Improving Lives. The report outlines digital prospects, problems and

OECD (2019), Going Digital: Shaping Policies, Improving Lives, OECD Publishing, Paris, https://doi.org/10.1787/9789264312012-en

It can sometimes appear as if technologies easily grow beyond what officials can regulate. Yet with more awareness and concerted policy action, governments, citizens and firms have the opportunity to shape the digital future and mitigate the effects of human bias. Claire Hathaway

Share article at https://oe.cd/obs/2D7

Societal intelligence Seventy years ago, scientist Alan Turing philosophically asked whether machines could think. Coined in 1956, the terms artificial intelligence and AI are now everywhere. Since 2011, breakthroughs in “machine learning”–an AI subset that uses a statistical approach–has dramatically improved the ability of machines to make predictions. A machine learning technique called “neural networks”, as well as large datasets and computing power, are fuelling AI’s rapid expansion. This expansion gives rise to all sorts of (mis)interpretations, hopes and fears. Can AI improve the likes of well-being, productivity or the environment? Or is it a vehicle for inequality and power struggles of the future?

This OECD report sets out to help us build a clearer understanding of AI for society in the present and near term. First, it clarifies what AI is and proposes a taxonomy to help policymakers better understand AI trends and issues. It then examines the AI landscape, showing how it is transforming societies and economies. In 2016 alone, between US$26 and 39 billion were invested in AI around the world. The report explores ten areas where AI applications are blooming: transport, agriculture, finance, marketing and advertising, science, healthcare, criminal justice, security, the public sector, as well as augmented and virtual reality. For instance, AI applications in agriculture help monitor crop and soil health to strengthen yields. Yet, as AI applications are adopted worldwide, their use raises challenges related to human values, fairness, human determination, privacy, safety and

accountability. No one has all the answers to these challenges. We need international co-operation and responses from across society to harness AI and make sure it is used for the wider good. This report draws on the work of an AI experts’ group formed in 2018 to scope principles to facilitate innovation, adoption and trust in AI. Their debates inspired the OECD Principles on Artificial Intelligence, adopted in May 2019 (see Recommendation of the Council on Artificial Intelligence). The report is a timely contribution to inform and improve policy as AI’s impacts permeate our societies in ever more diverse, promising and concerning ways. Anne-Lise Prigent OECD (2019), Artificial Intelligence in Society, OECD Publishing, Paris, https://doi.org/10.1787/eedfee77-en Share article at https://oe.cd/obs/2D8

OECD Observer No 317-318 Q1-Q2 2019

BOOKS OECD iLibrary

New publications ITF Transport Outlook 2019

Making Decentralisation Work: A Handbook for Policy-Makers

The ITF Transport Outlook provides an overview of recent trends and near-term prospects for the transport sector at a global level as well as long-term prospects for transport demand to 2050. The analysis covers freight (maritime, air, surface) and passenger transport (car, rail, air) as well as CO2 emissions.

This report offers a comprehensive overview of decentralisation policies and reforms in OECD countries and beyond. Sometimes called a “silent” or “quiet” revolution, decentralisation is among the most important reforms of the past 50 years.

ISBN: 978-92-82-108-307 May 2019, 200 pages €30.00 $36.00 £24.00 ¥3 900

ISBN: 978-92-64-313-026 March 2019, 188 pages €45.00 $54.00 £36.00 ¥5 800

Pharmaceutical Innovation and Access to Medicines This report reviews the important role of medicines in health systems, describes recent trends in pharmaceutical expenditure and financing, and summarises the approaches used by OECD countries to determine coverage and pricing. ISBN: 978-92-64-307-384 February 2019, 192 pages €50.00 $60.00 £40.00 ¥6 500

OECD Skills Strategy 2019 The OECD Skills Strategy provides a strategic and comprehensive approach for ensuring that people and countries have the skills to thrive in a complex, interconnected and rapidly changing world. The updated 2019 OECD Skills Strategy takes account of the lessons learned from applying the original skills strategy in 11 countries since 2012, while also incorporating new OECD evidence. ISBN: 978-92-64-313-835, May 2019, 228 pages €50.00 $60.00 £40.00 ¥6 500

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

Budgeting and Public Expenditures in OECD Countries 2019 This report provides a comprehensive view of practices and developments in the governance, implementation and performance of budgeting across OECD countries. It looks at recent practices such as the application of medium-term frameworks and the use of data and analytics to highlight the impacts of policies on concerns such as gender equality and the environment. ISBN: 978-92-64-307-957 April 2019, 264 pages €65.00 $78.00 £52.00 ¥8 400

Settling In 2018: Indicators of Immigrant Integration

Open Government Data Report This report provides an overview of the state of open data policies across OECD member and partner countries, based on data collected through the OECD Open Government Data survey (2013, 2014, 2016/17), country reviews and comparative analysis. The report analyses open data policies using an analytical framework that is in line with the OECD OUR data Index/International Open Data Charter. ISBN: 978-92-64-305-847 September 2018, 264 pages €65.00 $78.00 £52.00 ¥8 400

TALIS 2018 Results (Volume I) How can countries prepare teachers to face the diverse challenges in today’s schools? The OECD Teaching and Learning International Survey (TALIS) helps answer this question by asking teachers and school leaders about their working conditions and the learning environments at their schools. ISBN: 978-92-64-752-566 June 2019, 220 pages €60.00 $72.00 £48.00 ¥7 800

Saving Costs in Chemicals Management: How the OECD Ensures Benefits to Society

This joint OECDEuropean Commission publication presents a comprehensive international comparison across all EU and OECD countries–as well as selected G20 countries–of the integration outcomes of immigrants and their children, using 74 indicators based on three strands: labour market and skills; living conditions; and civic engagement and social integration.

The chemical industry is one of the largest industrial sectors in the world and is expected to grow fourfold by 2060. Given the potential environmental and human health risks from exposure to chemicals, governments and industry have a major responsibility to ensure that chemicals are produced and used safely.

ISBN: 978-92-64-307-209 February 2019, 308 pages €75.00 $90.00 £60.00 ¥9 700

ISBN: 978-92-64-311-701 February 2019, 76 pages €25.00 $30.00 £20.00 ¥3 200

BOOKS OECD iLibrary

Focus on digitalisation Artificial Intelligence in Society The artificial intelligence (AI) landscape has evolved significantly from 1950 when Alan Turing first posed the question of whether machines can think. Today, AI is transforming societies and economies. This report helps build a shared understanding of AI in the present and near-term by mapping the AI technical, economic, use case and policy landscape and identifying major public policy considerations.

ISBN: 978-92-64-545-199 June 2019, 139 Pages €35.00 $42.00 £28.00 ¥4 500

Unpacking E-commerce

All publications available at www.OECD-iLibrary.org The Role of Digital Platforms in the Collection of VAT/ GST on Online Sales

This report provides practical guidance to tax authorities on the design and implementation of a variety of solutions for digital platforms, including e-commerce marketplaces, in the effective and efficient collection of VAT/GST on the digital trade of goods, services and intangibles.

The report provides new insights into the state of the digital transformation by mapping indicators across a range of areas–from education and innovation, to trade and economic and social outcomes–against current digital policy issues, as presented in Going Digital: Shaping Policies, Improving Lives.

ISBN: 978-92-64-344-112 June 2019, 85 pages €25.00 $30.00 £20.00 ¥3 200

ISBN: 978-92-64-311-985 March 2019, 260 pages €35.00 $42.00 £28.00 ¥4 500

Digital Innovation: Seizing Policy Opportunities

As digital transformation has accelerated, the e-commerce landscape has become increasingly dynamic. New players have emerged at the same time that established actors have taken on new roles; some barriers to e-commerce at the firm, individual and country levels have been overcome, while other barriers have emerged.

This report discusses how the digital transformation–digital technologies, data and software, AI-based analytics and other advances–is changing innovation processes and outcomes. It highlights the general trends across the economy and factors behind sector-specific dynamics, including increasing use of data as a key input for innovation, the expanding possibilities for experimentation offered by virtual simulation, 3D printing and other digital technologies.

ISBN: 978-92-64-784-185 June 2019, 114 pages €35.00 $42.00 £28.00 ¥4 500

ISBN: 978-92-64-674-011 April 2019, forthcoming, 85 pages. €25.00 $30.00 £20.00 ¥3 200

An Introduction to Online Platforms and Their Role in the Digital Transformation Online platforms support so many of our daily activities that we have become dependent on them in our personal and professional lives. We rely on them to buy and sell goods and services, to find information online and to keep in touch with each other.

ISBN: 978-92-64-559-547 May 2019, 216 pages €70.00 $84.00 £56.00 ¥9 100

Measuring the Digital Transformation: A Roadmap for the Future

Going Digital: Shaping Policies, Improving Lives Digital technologies and data are transformational. People, firms and governments live, interact, work and produce differently than in the past, and these changes are accelerating rapidly. How can we realise the immense promises of digital technologies and data for growth and well-being in a fast evolving world? This report charts the road ahead.

ISBN: 978-92-64-312-005 March 2019, 168 pages €40.00 $48.00 £32.00 ¥5 200

OECD Science, Technology and Innovation Outlook 2018 The 14 chapters within this edition look at a range of topics, notably the opportunities and challenges related to enhanced data access, the impacts of artificial intelligence on science and manufacturing, and the influence of digitalisation on research and innovation. The report also discusses the shortcomings of current policy measures, how the Sustainable Development Goals are re-shaping STI policy agendas, and the need for new–more flexible and agile–approaches to technology governance and policy design.

ISBN: 978-92-64-307-568 November 2018, 320 pages. €90.00 $117.00 £74.00 ¥11 200

How’s Life in the Digital Age? This report documents how the ongoing digital transformation is affecting people’s lives across the 11 key dimensions that make up the How’s Life? Well-being Framework. A summary of existing studies highlights 39 key impacts of the digital transformation on people’s well-being.

ISBN: 978-92-64-311-794 February 2019, 172 pages €40.00 $48.00 £32.00 ¥5 200

OECD Observer No 317-318 Q1-Q2 2019

BOOKS OECD iLibrary

The cost of injustice £3.5 billion. That’s the amount of money–nearly US$4.5 billion– the UK economy is estimated to lose every year due to unresolved legal issues and ongoing disputes. Providing equal and efficient access to legal services–like mediation or legal representation–is considered to be a core duty of democratic justice systems. As Equal Access to Justice for Inclusive Growth shows, this equal provision of justice services is not only a good in itself, but is also essential for promoting inclusive economic growth. Wealth, gender, race, disability, and education: all these factors influence how citizens access legal services. The report notes that “unequal access to and

discrimination in sectors such as” health, employment, education and housing “create real barriers to economic participation.” People suffering from discrimination require legal remedies and support to help them continue to participate in economic and community life. Yet it is these same vulnerable individuals who face the most hurdles in accessing legal services–and this unequal access has tangible economic and social costs. For example, a Wisconsin study estimated that victims of domestic violence incur costs of US$3,400 for the likes of medical care and psychological counselling. Domestic violence is another area in which obtaining legal services needs to be made easier.

designing legal services to assist those who previously had difficulties accessing them, governments are not only helping their citizens but also saving money. One study in California found that the state saved US$7.70 for every dollar spent on providing legal services by eliminating excess legal hearings. A 2009 study found that tenants in the US who received full legal representation were significantly more likely to stay in their homes (55%) than those with limited or no representation (18% and 14% respectively). Ensuring that citizens avoid eviction is not only intrinsically good, but also saves governments the economic and social costs of homelessness. Will Friend

Fortunately, local and national governments are beginning to improve the “people-centred” nature of legal and justice services and to enhance equal access to legal services. By targeting and

OECD (2018), Equal Access to Justice for Inclusive Growth: Putting People at the Centre, OECD Publishing, Paris. https://doi.org/10.1787/597f5b7f-en

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Empowering women beyond Finland

Beyond changes in the structure of the economy, weakening productivity growth within particular sectors has also contributed to sluggish overall productivity, with disappointing performances even among the best Finnish firms. Productivity has declined

60% 40%

DAC Total, 2016

Government and civil society

20% 0%

Population and reproductive health

Source: OECD Creditor Reporting System Aid Activity. Database at http://oe.cd/oda-gender

Health

Other social infrastructure

Multisector

peace and security. To ensure that civilian and military experts deployed in crisis management operations respect gender, Finland has developed a gender checklist used by the Finnish Defence Forces International Centre.

of 36.5%. Over 80% of Finland’s ODA investments in education, water and sanitation focus on gender equality. Finland actively supports countries in developing their own national plans for implementing United Nations Security Council Resolution 1325 on women,

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Productivity above average but could do better Productivity as measured by GDP per hour worked, total, US$, 2018 or latest data available

ISL

ITA

L PO

ES T

100 90 80 70 60 50 40 30 20 10 0

Relatively weak overall productivity growth partly reflects a decline in manufacturing, in particular of dynamic gazelle firms in information technology and communications equipment, for instance. Moreover, productivity in the expanding service sector is generally weaker than in manufacturing.

Education

80%

2016

Productivity test Finland may be top of the class for education, but it shines less brightly when it comes to productivity, even if output per hour worked is 15% above the OECD average. In fact, productivity growth has slipped back since the financial crisis a decade ago.

100%

Water and sanitation

TU R

In 2002, Finland was among the OECD Development Assistance Committee (DAC) countries–together these countries account for some 90% of total bilateral official development assistance–to spearhead reporting on gender equality as part of its development work. Finland’s share of gender-focused bilateral aid reached 53.2% in 2016, well above the DAC average

Economic infrastructure

Finland’s global reputation as a genderequality pioneer is well earned. It introduced equal inheritance rights in 1878, gave women the right to study at university in 1901 and the right to vote in 1906. It should be no surprise, therefore, that the rights and status of women and girls should be a priority in Finland’s development co-operation policies as well. This is reflected in the country’s strong support of multilateral organisations with a mandate to work on women’s empowerment and sexual and reproductive health and rights.

Finland’s gender lead in development Finland compared with OECD Development Assistance Committee (DAC), share of bilateral allocable official development assistance (ODA) in support of gender equality by sector, commitments, 2016

Source: OECD

in public administration, education, social and health services, although this should be interpreted with caution given measurement issues. Also, recent increases in the employment rate, while beneficial, were concentrated among less skilled hires. Finland now has lower productivity than in the other Nordics. Recent and planned reforms could improve competition and lift productivity, the 2018 OECD Economic Survey of Finland notes.

Digitalisation offers further opportunities, too, though there is some concern that this productivity growth will become more concentrated in a small number of (possibly smaller) high performing firms. Still, maintaining strong R&D investment could also foster innovation, which if diffused, can lift productivity growth more widely. Share article at https://oe.cd/obs/2zH

OECD Observer No 317-318 Q1-Q2 2019

DATABANK % CHANGE FROM: PREVIOUS PERIOD

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. May 2019.

OECD Observer No 317-318 Q1-Q2 2019

50 5.2 4. 0 10 .6 2. 1 -4 .0 3. 9 13 .4

30 .2

Arrivals in 201

DATABANK

5.0 4. 2 11 .5 6. 7 11 .9 6. 1 6. 0 -6 .8 8. 4 5.0 8. 7 7.6 6. 5 12 .2 -2 .5 2. 1 8. 0 3. 5 8. 9 0. 1 7.3 5.7 27 .8 2. 6

30 20 10

ce U Sp S ain Ge U rm K M any ex ico It Tu aly r Au key s Gr tria ee c Ja e Ca pan na Po da la Ne K nd th ore er a H lan Cz ung ds ec ar h y De Re nm p. Sw ar k P ed Sw ort en itz uga er l l Ire and Au lan st d No ralia rw a C y Be hile lgi Ne Fi um w nla Ze nd al Es and t Sl oni ov a e Sl Is nia ov ra ak el Re La p. Lu Ic tvia xe ela m nd bo ur g

Sweden’s development lead Since 2006, Sweden has delivered 1% of its gross national income (GNI) as official development assistance (ODA). In 2017, Sweden was the highest contributor in percentage terms among OECD Development Assistance Committee (DAC) countries, outstripping the UN recommended goal of 0.7% of GNI. So how do they do it? Both the Swedish public and its government strongly support the country’s development commitments, reinforced by the awareness-raising activities of the Ministry of Foreign Affairs and Swedish International Development Co-operation Agency. Despite facing rising income inequality, housing shortages and house-price inflation, Sweden continues to remain an open country, committed to helping those faced with or fleeing persecution and violence. In 2015, Sweden received 163,000 asylum seekers–the highest number relative to population of all OECD countries. Sweden continues to provide effective and principled humanitarian efforts with

Aid performance Net official development assistance from DAC* countries in 2017, as % of gross national income Sweden Luxembourg Norway Denmark UK Germany Netherlands Switzerland Belgium France Finland Ireland Italy Austria Iceland Canada Australia New Zealand Japan Spain Portugal US Slovenia Greece Czech Republic Korea Poland Slovak Republic Hungary

0.32 0.30 0.30 0.28 0.26 0.23 0.23 0.23 0.19 0.18 0.18 0.16 0.16 0.15 0.14 0.13 0.13 0.11 0.31

Total DAC

0.1

0.2

0.3

0.4

0.60

0.46 0.45 0.43 0.42

UN target 0.70% 0.5

0.6

its co-ordinated approach to address the development, humanitarian and peace nexus in fragile and crisis contexts. Moreover, some 87% of its bilateral allocable aid in 2017 had gender equality and women’s empowerment as a key or significant objective. However, as the latest DAC peer review of Sweden’s development effort shows, there is some way to go in addressing internal staffing gaps and consolidating its policy

No 1, 2019

1.02 1.00 0.99

0.74 0.70 0.67

0.7

Source: OECD (2019), OECD Development Co-operation Peer Reviews: Sweden 2019, OECD Publishing, Paris

OECD Observer Crossword

% of GNI

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

*Development Assistance Committee https://doi.org/10.1787/9f83244b-en

framework on development co-operation and humanitarian assistance. Focusing its thinly stretched aid programme on fewer countries could further enhance its impact and reduce pressure on staff. OECD (2019), OECD Development Co-operation Peer Reviews: Sweden 2019, OECD Publishing, Paris, https://doi.org/10.1787/9f83244b-en

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Across 1 European country celebrating its 50th year as a member of OECD in 2019 5 Owns 7 New technology driving technological innovation, abbr. 8 Budgetary 10 Important bean 12 Type of TV 13 ___ learning, concept that is a key part of AI 17 Made an advance 18 Demonstrate and give knowledge to 21 Continental bloc, abbr. 22 United Nations labour org. 24 Control or produce automatically 28 Exists 29 In the past 31 Innovative 32 They should increase in proportion to advancing technologies, 2 words

Down 1 Finland’s is white and blue 2 Compass point 3 Universally accepted principle 4 Physician, familiarly 5 European city known for its Rock Church and Suomenlinna islands 6 Influenced 9 Brain child 11 Pick __ or the other! 14 Major sector of the global economy, abbr. 15 It might be self-driving in the future 16 USA’s 50th state 18 Keyword in preparing workers for new roles in the workforce 19 Top executive, abbr. 20 Word with nature or resources 23 Responsibility 25 Capitalise on 26 Survey question

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