Digital Economy Outlook 2015

1. DIGITAL ECONOMY
OUTLOOK 2015
KEY MESSAGES

2. • Digital economy a priority
• ICT sector gaining traction
• Price deflation on services
• Convergence is a driver
• Companies are online
• Youth are showing the way
• Trust is key to the future of the digital
economy
Main points

3. • Countries acknowledge the significance of the
digital economy to boost competitiveness,
economic growth and social well-being
– 27 out of 34 countries have a national digital strategy
– They are over-arching and cross sectorial
• The digital economy goes beyond the ICT industry
– Demand side objectives feature prominently within
the digital strategies
– Governments need to and are working in multiple
policy areas
Digital economy is a priority for
governments

4. • World exports of manufactured ICT goods
grew by 6% per year while ICT services grew
at 30% per year 2001-2013
• Out of total Business Enterprise Research
Development (BERD) the ICT sector
accounted for 33%
• Patent applications in ICT accounted for
almost 40% of applications, almost in line
with 2000-2002.
Positive outlook for the ICT sector

5. Employment of ICT specialists across the economy
As share of total employment, by category
• While employment in the ICT sector remained
stable, employment across all sectors of the
economy is up, and reach over 3% of total
employment in most OECD countries

6. • Fibre is increasingly being deployed, fibre
increased its share of total fixed broadband
subscriptions to 16.5% in June 2014
• Consumers are getting more for their money, e.g.
fixed broadband prices per Mbps decreased
significantly between 2012-14
• Mobile is getting more affordable, mobile
broadband baskets for smartphones decreased up
to 52% compared to 2012
Faster and cheaper communications

7. • The industry is being impacted by
convergence and consolidation
• Services, including TV and video, are now
carried over IP networks blurring boundaries
between traditional telecom and broadcasting
• As a result, a number of countries have
introduced legislation to prohibit blocking
and discrimination of services (net
neutrality)
The communications industry continues
to converge

8. • Almost all businesses rely on ICTs, by 2014
– 95% of enterprises had broadband up from 86% in 2010
– more than three quarters of business had a web presence (76%)
– a large majority (90%) were interacting with public authorities
online
– cloud computing has accelerated, 22% of companies were using
these services
Companies are online
Enterprises using cloud computing, 2014

9. • However, adoption remains low for
– e-commerce, only 21% of firms sold online (up
only 2 percentage points from 2009)
– more sophisticated software, only 31% of
companies used Enterprise Resource Planning
(ERP) in 2014
• And in all cases, large firms adopt more
than smaller ones
…but there is still more to do

10. • 81% of adults in the OECD area use the Internet
(95% of 24yr olds); however, less than 49% of
those over 65 used it, but with great variations
Individuals’ Internet use continues to
differ by age and education (1)
Age gaps in Internet use, 2014
As a percentage of population in each age group

11. • Individuals shopping online has increased from
31% in 2007 to 50% in 2014 and through their
phones (24% in 2011 up to 38% in 2013)
• The breadth of Internet activities carried out by
users with tertiary education was on average 58%
larger than those with less education
• E-government varies widely across countries
– 64% of OECD individuals used online government
services
Individuals’ Internet use continues to
differ by age and education (2)

12. • Smartphone adoption in OECD countries grew by 30% in
one year (2012-13)
• The rise of online and mobile banking is changing
market boundaries and competition in the traditional
retail banking sector, including the rise of P2P lending
platforms
• The introduction of the “Sharing” Economy – while these
models enable collective consumption, they are
challenging existing regulatory frameworks
• Crowdsourcing increasingly being used to develop ideas
and products including using social media to solicit
feedback and to raise capital, particularly in early stages
Mobile and data are driving new
business models

13. • Users are increasingly concerned, 64% of respondents are
more concerned about privacy than they were a year ago
• Security and privacy are top priorities for governments
(ranked 2nd and 3rd)
• Driving a new generation of cyber-strategies and the need
for privacy and security professionals
• And the increasing need for national strategic approaches
to privacy, incorporating a whole-of-society perspective
with the flexibility to capitalise on technological
developments (e.g. data analytics and the Internet of
Things)
Trust is critical to the growth of the
digital economy

14. • IoT relies upon connectivity between devices
and sensors
– The number of connected devices in OECD countries is
estimated to be 14 times larger in 2022
– Wireless networks are essential
Internet of Things – where are we?
Number of M2M/embedded mobile cellular subscriptions

15. • IoT will bring benefits across the economy by
allowing for innovative approaches to dealing with
ongoing challenges, for example improved energy
efficiency
• IoT will facilitate the development of new
technological applications like autonomous
machines
• A risk-based approach to security and privacy in
this space will be instrumental
Internet of Things –what’s the potential?