Data Economy

This report, done in collaboration with McKinsey and Company, represents a year-long effort with business, government, civil society leaders, experts and practitioners to advance public-private data collaboration to address some of the world’s most pressing humanitarian and sustainable development challenges.
The report provides a holistic governance framework designed to strengthen trust, balance competing interests and deliver impact. It offers insights to balance both the need to innovate in the use of data and the mandate to protect vulnerable populations against known and emerging harms.

A year ago, the OECD warned about how trade and policy uncertainties could significantly damage the world economy and further contribute to the growing divide between people. A year later, global momentum has weakened markedly and growth is set to remain subpar as trade tensions persist. Trade and investment have slowed sharply, especially in Europe and Asia. Business and consumer confidence have faltered, with manufacturing production contracting. In response, financial conditions have eased as central banks have moved towards more accommodative monetary stances, while fiscal policy has been providing stimulus in a handful of countries. At the same time, low unemployment and a slight pickup in wages in the major economies continue to support household incomes and consumption. Overall, however, trade tensions are taking a toll and global growth is projected to slow to only 3.2% this year before edging up to 3.4% in 2020, well below the growth rates seen over the past three decades, or even in 2017-18. While growth was synchronised eighteen months ago, divergence has emerged between sectors and countries depending on their exposure to trade tensions, the strength of fiscal responses and policy uncertainties. The manufacturing sector, where global value chains prevail, has been hit hard by tariffs and the associated uncertainty on the future of trade relationships, and is likely to stay weak. Business investment growth, also strongly linked to trade, is set to slow to a mere 1¾ per cent per year over 2019-20, from around 3½ per cent per year during 2017-18. However, services, less subject to trade jitters and where most job creation takes place, continue to hold up well. In parallel, growth has weakened in most advanced economies, especially those where trade and manufacturing play an important role, such as Germany and Japan, with GDP growth projected to be below 1% in both countries this year. In contrast, the United States has maintained its momentum thanks to sizeable, albeit waning, fiscal support. Divergence is also visible among emerging-market economies, with Argentina and Turkey struggling to recover from recession, while India and others are benefitting from easier financial conditions and in some instances fiscal or quasi-fiscal support.

Data-driven innovation is unlocking new opportunities for Europe to grow its economy and address pressing social challenges. While Europe has achieved some early successes in data-driven innovation, including in areas such as education, energy, environmental management, health care, open data, smart cities, and smart manufacturing, it has not yet come close to reaching its full potential. The primary obstacle is that Europe’s policymakers, both in its capital cities and in Brussels, have not yet fully embraced data-driven innovation as a core driver of economic and social progress. To inject new leadership into this debate, Member States should appoint national chief data officers to not only champion data innovation domestically, but also serve on a new, independent advisory panel charged with counseling the European Commission on how to seize opportunities to innovate with data.

Data innovation—the innovative use of data to create social and economic benefits—is making a significant mark in Europe.In economic terms, data innovation contributed about €300 billion to Europe’s economy in 2016 (or approximately 2 percent of GDP), and its value will likely more than double by 2020. Across society, data innovation is creating more responsive governments, better health care, and safer cities. But EU nations differ in the degree to which they are harnessing the benefits of data. This report uses a variety of indicators to rank EU member states and discusses why some countries are ahead and what others can do to catch up.