Resilient Economies- Resist, Adapt and Grow
Inequality is growing and the distribution of burdens and rewards across society is becoming more uneven. This raises concerns about undue influence over public policy, and leads many to question the ability of our governments and institutions to find equitable, lasting solutions to the crisis.
Tackling social challenges requires generating more and better quality jobs and ensuring the effective provision of public services. But the main engines of economic growth (including trade, investment and credit) have not yet recovered their pre-crisis dynamism.
At the same time, long-term trends, such as ageing populations and climate change, impose significant policy constraints and challenges.
To achieve sustainable, balanced and inclusive growth in these conditions, people need to be both empowered and protected.
The resilience of our economies, societies and institutions has to be strengthened.
Day 1 Opening Speeches:
The great Gabriel García Márquez recently departed Gabo, who is now surely in Macondo having a coffee with Colonel Aureliano Buendía, once wrote: “La sabiduría nos llega cuando ya no sirve para nada”. “Wisdom arrives to us when it’s no longer useful”. This Forum is an attempt to challenge that warning. After six years of crisis, the world needs our wisdom, our inspiration, our new ideas, now. There are billions of people waiting for that new idea, and that new idea could have been born at the OECD Forum.
The global economy is showing important signs of progress. Global GDP is expected to grow by close to 3.5% in 2014 and close to 4% in 2015. Global trade is growing again, with forecasts of 4.7% and 5.3% for 2014 and 2015. Global development aid rebounded last year to reach the highest level ever recorded. This is certainly good news. But it is not enough.
It is still not enough to bring the 202 million unemployed back to a decent job. This is not enough, when we have 73 million youngsters out of work. This is not enough, when inequalities in many countries are now growing faster than before the crisis. And this is certainly not enough, when trust in leaders, governments, parliaments, corporations, banks, rating agencies, regulators and media, is eroding and reaching record lows.
This crisis should be a game-changer. We cannot go back to business as usual, to the same active inertia where high net worth individuals and multinationals don’t contribute their fair share to society; where the vulnerabilities of financial systems are camouflaged; where speculation and leverage keep flying high; and where some policy-makers and economists are still clinging to economic models that have been proven obsolete, wrong or unsustainable.
It is time to imagine a new type of growth that is focused on the wellbeing of people, on the benefits of equitable societies, on the trade-offs and complementarities of different policies in favour of human progress. I am talking about Inclusive Growth, one of the three main topics of this Forum and a central discussion in the 2014 MCM.
What do I mean by Inclusive Growth? Well, basically that economic growth should deliver better living standards for all, and that increased prosperity must imply better social outcomes and greater well-being. A substantial commitment to social inclusion is imperative to achieving sustainable economic growth in the 21st century.
Day 2 Opening Speech
According to Shinzō Abe, Japan Prime Minister, Japan’s growth is through the use of technology and has been beyond expectations. It has come from Japans dynamic SMEs, in transport, health and construction as it now works towards large scale redevelop for hosting the next Olympic Games. Japan is revitalising the economy with fiscal and social reforms. Retail, medical services and others will be subjected to regulatory reforms, including companies in order to make sure they remain globally competitive. The Prime Minister continually reiterated that he is not afraid of reforms.
Japan’s priority is to accelerate EPAs and trade agreements for Japan. Australia, Transatlantic and EU, he requested that EU people invest in Japan. Building a new economic order is essential for sustainable growth. Economic growth is not generated by the state, it is created by private sector in collaboration with the state. The Prime Minister insisted on fair and impartial rules for all, citing Marshall , without abuse of workers, without unfair trading rules or unfair pressures – countries working on the same rules could work together.
Demographic challenges will mean refashioning of thinking to ensure Japan continues its growth. This will include creating a new culture which uses Robots to add value. His pledge was that Japan will lead the way in Robot technology. Additionally he promoted gender equality, noted that men, including himself, have actively discouraged engagement of women. Noted that women have succeeded in many parts of the world but have not achieved such heights in Japan and this needed to be changed. He also added that the hope is in the young people across the world. They need to be empowered and this will bring a resilient world which can cope with challenges and crisis at any time.
His speech was followed by the Launch of the South East Asia OECD regional programme – A programme to strengthen policy in the region.
More details and full speeches can be found on http://www.oecd.org/ as well as the intensive programme.
OECD Economic Outlook
- Growth in advanced economies rebounding, and accelerating , includes in Euro area
- BRICS growth slowed and benign
- China growth rate more sustainable.
- Investment and trade policies and activities are out of tune and this is giving the imbalances
- Favourable financial conditions lead to better growth. EU variations in member states is not supporting EU growth. EU area is still fragmented and this means US and japan accelerating ahead
- Although unemployment is falling the numbers are still high (47m in total OECD countries , increase of 40 m since 2007) and in Eurozone this has a big impact.
- Geopolitical tensions remain a threat to stability – Ukraine example
- EU area falling into deflation
- Rapid credit growth in emerging economies - concerns for China with its shadow banking sector
Structural scars need structural reforms
- Fiscal and tax policies , including banking practices need to be analysed European banks may need to be decapitalised or closed in some cases
- Removing barriers to trade
- Creating employment
- Structural reform activities needed in BRICS
My active participation
Following the opening ceremony I attended the Ideas Factory which is an innovative way of involving multiple peoples ideas to solving problems. I had been a speaker 2 years ago and enjoyed the participation.
Addressing the Talent Gap
Despite persistently high unemployment rates, employers have difficulty filling millions of jobs and the inability to find enough skilled talent has become a key concern. Young people need to be equipped with a range of skills to succeed in today's complex marketplace. Business and policymakers are looking beyond tertiary education to apprenticeships as a possible way of addressing the talent mismatch, and improving job prospects.
Apprenticeships alone are not a panacea for the employment crisis, but can do a lot to help. Countries with strong traditions of apprenticeships (Germany, Austria and Switzerland), proved resilient during the 2008 downturn; and registered less than 9% youth unemployment, compared to the OECD average of 16%. Many OECD countries are building on their experience and introducing strategies that target the skills mismatch. The OECD included apprenticeships as one of the key points in its Action Plan for Youth, while the G20 has called for greater investment in apprenticeships.
But for apprenticeship programmes to be adopted in more countries, a number of structural issues need to be addressed, e.g. skill certification, age restrictions and financing.
The OECD Forum 2014 explored the frameworks that need to be put in place to promote apprenticeships schemes, such as the Global Apprenticeships Network that aims to develop quality apprenticeships and support employment for youth through multi-stakeholder dialogue, partnerships and concrete action.
Despite the focus of the discussions on Apprenticeships the majority of the debate and recommendations were on encouraging more entrepreneurs and developing the entrepreneurial spirit. Without the creation of more businesses there would not be opportunities for job creation.
The global skills mismatch had three major factors that needed addressing 1) geographical, the surplus and deficits skills across the world, 2) overcoming the lack of experience and knowledge to do jobs or understand employers 3) undersupply of talent which required Life Long Learning to be promoted throughout the workforce and throughout life .
I was especially able to raise the EESC work on female entrepreneurship and its value to the economy since the crisis. The issues of gender imbalances in society were raised by other participants, including one gentleman who highlighted that mothers had the greatest economic potential as they were great managers and organisers.
Work based training should be promoted and this had led to the establishment of the Global Apprenticeship Network as a centre for sharing best practice. Additionally role models, employee participation , social dialogue between employers and trade unions, engaging recruitment agencies and universities were all recommendations of simple steps that could be taken to better engage with young people - the phrase used was “ conservation of talent!”
We also talked about innovation for jobs which was about disrupting the current systems to create some new thinking to address the challenges. Labour market flexibility, and creating value by creating your own job. It is essential to have guidance early on , mediation and hand holding.
The concerns were that whilst there was a high turnover of young people in employment this meant that very often there was a lower investment in their training and hence their real talents were not identified or used.
The usual concerns about poor relations between education and business was additionally listed, as well as the lack of soft skills. But we were given a great case study of a college that had peer to peer learning, no teachers and was developing some fabulous examples and high quality employees.
Please do not hesitate to contact me for any further information firstname.lastname@example.org.
Thank you for this great opportunity to introduce the EESC’s work on entrepreneurship and gender equality..