Remarks by Angel Gurría

OECD Secretary-General

Katowice, Poland - 13 December 2018

(As prepared for delivery)

 

 

Dear Minister Emilewicz, Ambassador, Distinguished Guests, Ladies and Gentlemen:

I am delighted to join Poland’s Minister of Entrepreneurship and Technology, Ms. Jadwiga Emilewicz, for this important discussion with the brightest young minds in Katowice. I’d like to begin by thanking Poland’s delegation to the OECD, led by Ambassador Aleksander Surdej, and our hosts, the University of Economics in Katowice, for organising today’s event.

As COP24 draws to a close, we have an exciting opportunity to discuss a critical issue with the leaders of today and the young leaders of tomorrow; an issue that is not only important for the environment, but also for society. We are exploring how to harness digitalisation to deliver more inclusive and sustainable cities, looking particularly at how “smart cities” can improve our lives.

 

Digitalisation requires policymakers to recalibrate policies

There is no doubt about it, economies, governments and societies across the globe are going digital. Almost half of the world’s population is now connected to the Internet, up from only 4% in 1995. In 2016, 83% of all adults and 95% of all businesses in OECD countries had access to high-speed broadband. New technologies are transforming many aspects of our lives. Recent OECD research has found that around one-half of all people across the OECD have accessed public services or health information online. Digitalisation is enabling one-fourth of all workers in the OECD to work remotely, and e health technologies have the potential to transform patients’ experiences and health outcomes.

Emerging technologies are already becoming indispensable to our daily lives, whether we live in cities, towns or rural areas – we think first of smartphones, but there is also artificial intelligence (AI), big data analysis, 3D printing, and industrial robots, to name just a few. Other emerging technologies look to be on the verge of making a transformative contribution, like blockchain and self-driving cars. While these technological innovations will affect all of society, cities in particular stand to be transformed by the digital revolution.

 

Digitalisation brings opportunities to cities

Cities house half the world’s population and they are the focus for a growing geography of discontent, as many rural, small and midsize towns feel left behind. OECD evidence has shown that the productivity gap between top performing regions and others in OECD countries has widened by almost 60% in two decades. Even within large cities, “ghetto isation” can drive radically different outcomes from one neighbourhood to another. For example, life expectancy can vary by a staggering 20 years across neighbourhoods in London or Baltimore.

The digital revolution brings opportunities to help these “left behind” places catch-up through innovations in urban design, policymaking and infrastructure, whether it’s by delivering high speed broadband, providing public services more effectively, or creating high tech hubs. Many cities are already tapping this potential, often with the close involvement of the private sector.

Around the world, governments are making cities “smarter”. They are using data and digital technology to help tackle climate change, to make cities cleaner, to improve administrative processes by searching for efficiencies, cutting red tape, delivering better value for money and engaging citizens.

Let me highlight just a few examples:

• smart grids are monitoring energy consumption while smart meters and pipes are helping to track water quality and detect leaks; 
  
  
• smart sensors are improving traffic flows, transport efficiency and solid waste collection routes; 
  
  
• mobile applications are enabling citizens to report problems in real-time and engage directly with city services; 
  
  
• self-driving cars and car-sharing platforms are starting to offer opportunities to rethink how we move in cities. In Paris, where the OECD is headquartered, electric scooters are the latest trend; and
  
  
• as highlighted in the OECD’s report, Building Resilient Cities, launched at COP24 earlier this week, digitalisation is also contributing to urban resilience. For example, it has helped to improve emergency services and disaster response in five cities in Southeast Asia.

These sector-driven technologies have contributed to new social initiatives, climate change actions and green growth in cities across a range of areas, through energy, water, clean air and other environmental benefits.

 

Digitalisation is bringing multiple challenges

However, digitally-driven innovations also come with a range of challenges, trade-offs and hidden costs.

 

• First, without a multi-sectoral perspective, technological innovations can undermine legal and regulatory frameworks that safeguard affordability objectives, protect consumers, support efficient and effective taxation, inform labour contracts and ensure fair competition. Regulation and taxation must keep pace with technological change. The OECD is leading the global effort through our Going Digital project and our Inclusive Framework on Base Erosion and Profit Shifting, which just delivered its Interim Report on the Tax Challenges Arising from Digitalisation.
  
  
• Second, digitalisation can jeopardise citizen data privacy and safety. Security and privacy are essential for the digital economy to continue to serve as a platform for innovation, new sources of economic growth and social development. Privacy in an increasingly data-driven economy requires a multifaceted strategy, reflecting a whole of-society vision, and supported at the highest levels of government.
  
  
• Third, tech-driven solutions risk deepening inequalities for digitally marginalized groups, unless the digital divide is addressed. This requires not only improved access to digital infrastructure, but also skills, skills, skills! We have a long way to go. The OECD’s Survey of Adult Skills (PIAAC) has found that more than half of adults on average in 28 OECD countries have either no ICT Skills or only very basic skills. There is also a worrying gender dimension, with gender stereotyping often discouraging women from pursuing careers in the digital sector. For example, 5.5% of male workers in OECD countries are ICT specialists compared to only 1.4% of female workers. 
  
  
• Last but not least, in the urban context, cities require strong financial and technical capacity to enable investment for smart city solutions tailored to the specific needs of local areas. The diversity in capacity between large cities and small- and medium-sized cities risks widening disparities in the level of public services across cities.

One thing is clear: cities, like countries, cannot work alone. National and local governments must come together to enable the rapid diffusion of new technologies and ensure positive benefits for millions of citizens. The OECD is playing its part.

 

OECD’s assessment of smart cities outcomes and contribution to inclusive growth

We have been working intensively to provide policymakers at all levels of government with the tools they need to help economies and society prosper in our increasingly digital and data-driven world. We will deliver the final report of our Going Digital project in March 2019, and our next Ministerial Council Meeting in 2019 will also focus on digital challenges and opportunities for the global community.

The urban application of digital technologies will be key. We must learn collectively from a decade of experimentation in smart cities across the globe. It is time to take stock of what has worked, what has not worked, and what can be improved to leverage digital innovation for more inclusive and sustainable outcomes.

In this spirit, the OECD’s Programme on Smart Cities seeks to measure the performance of smart cities and their contribution to inclusive growth and well-being. We are currently developing an indicator framework that will strengthen our internationally comparable statistics and data across 600 metropolitan areas above 250,000 inhabitants.

Our approach recognizes that creating smart cities won’t be enough to keep them dynamic. Smart cities cannot be developed separately from a national spatial strategy that addresses the tendency towards market concentration and urban clustering and that takes into account underlying demographic trends.

The OECD is also collecting and analysing world-class solutions and best practices within our OECD Champion Mayors for Inclusive Growth Initiative, a global coalition of more than 60 mayors who have made the fight against inequality a priority in their policy agendas.

Ladies and Gentlemen:

The leading urban economist, Professor Edward L. Glaeser of Harvard University, has said that “not too long ago, it looked like our cities were dying, but in fact they boldly threw themselves into the information age, adapting and evolving to become the gateways to a globalised and interconnected world. Now more than ever, the well-being of human society depends upon our knowledge of how the city lives and breathes.”

Digital technologies have a crucial role to play in helping cities live and breathe, in making cities of all sizes safer, greener, cleaner, healthier and more inclusive. Smart city technologies bring huge potential, but there are no easy solutions.

The OECD stands ready to support governments and stakeholders design, develop and deliver better policies for more inclusive, sustainable and smart cities. Thank you.

 

 

See also:

OECD work on Going Digital

OECD work on Inclusive Growth

OECD work with Poland