NAEC: Complexity and Policy Workshop

Opening Remarks from NAEC Complexity and Policy Workshop

We are delighted to work with our trusted partners, the Institute for New Economic Thinking (INET) Oxford, and the European Commission in establishing a programme to help policy-makers advance the use of complex systems thinking to address some of the most difficult challenges which confront us all.

This event follows up on a workshop held in October last year which explored new research on complexity and drew some important implications and tentative policy lessons. Over the next day and a half, we want to take the next step – to make the case for the use of complex thinking in policy.

This is important because we need to understand better how the economy works so as to better design policies. This is ultimately the aim of our New Approaches to Economic Challenges (NAEC) initiative which has been at the heart of our efforts to consider and address the unintended consequences of policies, while developing new approaches that foster more sustainable and inclusive growth.

The NAEC Initiative is helping the OECD take advantage of a quiet revolution in the social sciences. The availability of large-scale agent-based computing, computationally-facilitated network analysis, and ‘big data’ resulting from the internet has combined to forge a new kind of economics – complexity economics – which is more relevant for policy than traditional approaches.

The workshop will highlight cutting-edge policy applications of complexity thinking.

For instance, the study of complex networks provides a new and powerful perspective on the critical infrastructure of financial systems. Networks – broadly understood as a collection of nodes and links between nodes – offer a useful representation of financial systems. This is essential in better regulating the financial sector.

Cesar Hidalgo, Ricardo Hausmann and Luciano Pietronero have highlighted the importance of networks of capabilities where the  complexity of products produced and the “fitness” of an economy are essential in understanding future growth prospects.

naec_complexity_workshop_2909_2016_gr

Lessons from biology and physics have been used to understand the dynamics of urban centres around the world which may help guide policy priorities.

Geoffrey West from Santa Fe Institute and his colleagues have discerned laws containing “universality” to cities. For instance, doubling the size of a city systematically increases income, wealth, number of patents, number of colleges, number of creative people, number of police, amount of waste… all by approximately 15%. These results have been observed in hundreds of cities all around the world.

Big data is being used to predict a range of phenomena from the spread of flu to movements in the stock market.

The OECD has started to embrace complexity and systems thinking with work on understanding complex global interconnections through the Trade in Value Added (TiVA) Database.

We are undertaking modelling work to link economic with other systems models. The Costs of Inaction and Resource scarcity: Consequences for Long-term Economic growth (CIRCLE) project aims to identify how feedback from poor environmental quality, climatic change and resource scarcity affect economic growth, and how policies may alter this. When devising new policies, it is essential to take a systems approach, and to understand the complex channels through which environmental change affects growth. It is also important to stress the inter-linkages among different environmental challenges.

Complexity thinking and models are already making a difference. But we should also think about how to better communicate complex policy messages. We have prepared an OECD Insights book “Debating the Issues: New Approaches to Economic Challenges” which describes the new approaches OECD is taking to policy in a complex world. We also have a background paper for the workshop containing “Insights into Complexity and Policy”. Copies of both are available at the back of the room.

I wish you all a productive discussion and by considering complexity, I hope we can stimulate new thinking, new policy approaches and ultimately as we say at the OECD,  better policies for better lives.

Learn more about the NAEC programme here

Leading Inclusive Growth: A Meeting with Mayors

Speech from “Reinventing our Communities: Transforming our Economies” 22 September

Why Inclusive Growth?

We have reached a key moment for the world economy. Just yesterday we launched the OECD Economic Outlook, for the world economy, and it is not positive. A low-growth trap has taken root, trade is depressed, investment is depressed, productivity and wages are depressed. The US looks better but cannot be the only engine of growth.

On top of this, inequality is at its highest levels in 30 years. And in the US, the gap between the 10% richest and the 10% poorest is the double of the OECD average.

But we need to remember that inequality is not just about money. Inequality is also felt in labour market exclusion, lower social mobility and greater polarisation in educational and health outcomes. Here in the US, there is still much work to be done:

  • The share of women in the labour force has continued to decline, reaching levels below Germany and Japan. And a considerable wage gap persists, with women earning around 18% less than men.[i]
  • Or consider that, on average, the most well-educated white males in the U.S. are expected to live 14 years longer than the least-educated African-Americans![ii]

OECD research also demonstrates that income inequality hurts economic growth over the long term. This is linked to the fact that low-income groups cannot invest in the education of their children, thereby denying them the opportunity to improve their life prospects.

All on Board for Inclusive Growth

It is not enough to document inequalities, we need to advance the policies to address them and this is what the OECD has been doing with the All on Board for Inclusive Growth  initiative.

And this year, we took those efforts to another level, with a report we produced on the Productivity-Inclusiveness Nexus. The report examines the interactions between rising inequalities and slowing aggregate productivity growth, looking at four dimensions: people, regions, countries and firms.

The bottom line is this: we need growth that puts people at the centre of our economies.  We need to provide the means to all to fulfil their full potential.

What does this mean concretely?

  • In the US, this means putting more efforts in education, skills and labour market reactivation measures, focusing on disadvantaged groups.
  • It means implementing family-friendly policies that enable women to re-enter the labour market after having children, and promoting paid parental leave for mothers and fathers as well as quality childcare facilities.

Why Inclusive growth in cities?

As everyone in this room knows well, fighting inequality is not only a global and national concern ─ it is also a very local one. We need cities, and their leaders, at the centre of this fight.

Cities generate growth and economic opportunity, but they also concentrate inequalities. OECD data show that cities consistently record higher levels of income inequality than the respective national average, and large cities tend to be more unequal than smaller ones.

  • Among the 70 largest US metro areas, Miami has the highest level of inequality (in terms of Gini coefficient), while Albany, NY, records the lowest levels.

We see huge differences in inequality levels within countries:

  • In my country, Mexico, for instance, the range in the Gini coefficient of the states of Tlaxcala (0.41 in 2012) and Guerrero (0.53 in 2012) is similar to the difference between Mexico (0.48 in 2012) and New Zealand (0.32 in 2011)!

As I said, inequality has a clear spatial footprint. We all know that disadvantaged neighbourhoods are often home to poorer housing conditions, limited access to services and lower-quality schools. And mounting evidence suggests that poverty and inequality are reproduced across generations.

  • Here again, the situation in the US is particularly worrisome. Our analysis suggests that the most income segregated cities in the Netherlands and France are at comparable levels to the least segregated cities in the US!

But there is good news!

Cities are also where innovative solutions are emerging – where leaders are stepping up to articulate and deliver on a vision for Inclusive Growth.

Cities have a hand in many policy areas that matter for Inclusive Growth: like education and skills, health, transport, housing and spatial development.

They are also critical investors in Inclusive Growth, with sub-national governments carrying out around 40% of total public spending in the OECD and 60% of public investment.

The OECD Inclusive Growth in Cities initiative

At the OECD, we are conscious that we cannot win the battle against inequalities if we ignore the crucial role of cities and local leaders. That’s why, this past March, with the support of the Ford Foundation – I know our friend Xavier Briggs was here yesterday – we launched the OECD Inclusive Growth in Cities Initiative.

We’ve built a global coalition of Champion Mayors around the world who are leading the fight against inequality. Alongside Mayor Bill de Blasio from New York, nearly 50 mayors signed on to the New York Proposal for Inclusive Growth in Cities, collectively committing to ensure that cities work for all of us.

Let me highlight just a few of the key policy areas outlined in the NY Proposal:

  • First, cities can help provide education and training systems that enable people of all ages and backgrounds to develop skills and improve their life chances. In today’s panel, we will hear from Mayors in Camden, Miami Gardens and Rochester, about how they are forging partnerships to improve children’s literacy, job training and workforce development in their communities.
  • Second, cities can expand economic opportunities by putting in place policies that support labour market integration — whether it’s expanding childcare and preschool to support women in the workplace or helping immigrants adapt their skills to new labour market contexts.
  • Third, we can change the way we build our cities. Too often, housing policies are divorced from a broader strategy for urban development, transport and access to services. We need housing policies that aim to build cities, not just houses.
  • Fourth, we can invest in high quality, accessible infrastructure, which can promote faster growth with particular benefits for low-income groups.
    • Here in Philadelphia, you understand the importance of investing high quality infrastructure. The smart infrastructure investments you made to reduce storm-water runoff have reduced capital expenditure by USD 8 billion over 25 years.That’s USD 8 billion freed up to address other dimensions of inequality in the city!

Let me close by outlining a few ways in which the OECD will support these efforts:

  • First, with evidence. Our Metropolitan Database is the only international source for comparable data for over 375 metro areas. We are also developing a new metric for cities that measures well-being across a range of dimensions – inequalities, income, unemployment and health – building on our statistical work at national level.
  • Second, with cross-cutting policy expertise. We have produced many metropolitan reviews, from Chicago to Cape Town to Stockholm, we have helped cities develop comprehensive policy agendas and measure progress toward more competitive, sustainable and inclusive outcomes. We also help promote exchanges of best practices among cities.
  • Third, by elevating the voices of Mayors, bringing their visions and ambitions to the forefront of international agendas – including the SDGs and the New Urban Agenda to be launched at Habitat III next month. In November, Champion Mayors will join Mayor Anne Hidalgo to deliver the Paris Action Plan, committing to specific actions to build more inclusive cities and societies.

The response from Mayors around the world has been amazing! And we hope that more Mayors will continue to join us. We think this work strikes a chord with local leaders because they understand better than anyone that inequalities, when unaddressed, threaten the core of our societies and our economies.

Thank you!

Presentación del Panorama de la Educación 2016

eagPresentación del Panorama- PPT

Es un placer poder presentarles los resultados del Panorama de la Educación de la OCDE 2016. Estos reportes han constituido la fuente de información más acreditada sobre el estado de la educación en algunas de las principales economías del mundo durante más de 25 años.

El Panorama de la Educación 2016

En esta edición, el estudio presenta datos sobre la estructura, finanzas y desempeño de los sistemas educativos en los 35 países de la OCDE y varios países asociados. Por primera vez incluye un análisis del progreso de los países de la OCDE para alcanzar el Objetivo de Desarrollo Sostenible número 4 enfocado en educación.

Desafortunadamente, los resultados no son alentadores, pues sólo 12 países OCDE para los cuales se tienen datos consiguen estar al nivel en al menos 5 de las 10 metas educativas que el Objetivo 4 incluye.  México sólo cumple con una de las 10 metas – la que exige que la totalidad de los niños de 5 años estén matriculados en educación preescolar – por lo cual habrá que acelerar los esfuerzos para cubrir el resto.

Las Inversiones en Educación Han Crecido A Pesar de la Difícil Situación Fiscal

El Panorama de la Educación 2016 muestra también que los gobiernos siguen dando prioridad a las inversiones en educación, a pesar de la difícil situación fiscal que muchos de ellos enfrentan. Entre 2008 y 2013, en los países OCDE el gasto real por estudiante aumentó 8% de primaria a educación media superior y 6% en educación superior.

En México, en 2013 el gasto total, de primaria a educación superior, ascendió a 5.2% del PIB, el mismo nivel que la media de la OCDE. Entre 2008 y 2013 el gasto total (público y privado) aumentó en 18% del nivel primaria a educación media superior y 14% en educación terciaria, mientras que el gasto por estudiante de nivel primaria a educación media superior subió un 13% y disminuyó en 9% a nivel terciario. La disminución a nivel terciario en cierta medida se debió al notable aumento de 26% en el número de estudiantes a ese nivel.

Educación: Clave para el Crecimiento Incluyente

El estudio también aporta datos para demostrar cómo los empleos, los salarios, los niveles de salud, y la satisfacción con la vida están estrechamente vinculados con los logros educativos y el nivel de habilidades y destrezas de la población.

México tiene mucho que avanzar en este sentido. En el año 2015, en el país sólo el 16% de los adultos contaba con educación superior, el porcentaje más bajo entre los países de la OCDE, cuyo promedio es de 36%, pero más alto que en Brasil, donde alcanza 14%. Sin embargo, mientras que sólo el 12% de la generación de 55 a 64 años de edad tiene un título de educación superior, la cifra aumenta a 21% entre las generaciones más jóvenes, de 25 a 34 años de edad.

Como ocurre en otros países latinoamericanos, en México la diferencia en los ingresos por tener una educación superior es muy grande. Los adultos con una licenciatura o grado equivalente ganan dos veces más que aquellos con educación media superior, y las personas con grado de doctorado o con maestría ganan tres veces más que aquéllos con educación media superior.

Por esa razón será fundamental que México adopte medidas contundentes para aumentar las tasas de graduación a nivel de educación media superior que actualmente son las más bajas entre los países OCDE. En la OCDE, 16% de los jóvenes de 25 a 34 años no cuenta con educación media superior. En México esta proporción es de 55%.

Las Brechas de Género en Educación Son Marcadas

Las disparidades de género son otro gran reto para los países de la OCDE, y por supuesto también para México. Mientras que un número mayor de mujeres cuentan con educación terciaria, las mujeres siguen estando subrepresentadas en los estudios de Ciencias, Ingeniería, Manufactura y Construcción.

En 2014, en promedio, 3 veces más hombres que mujeres se graduaron con títulos de ingeniería, mientras que 4 veces más mujeres que hombres se graduaron con estudios de pedagogía.

La transición de la escuela hacia el trabajo también es más complicada para las mujeres. En los países OCDE, 18% de las jóvenes entre 20 y 24 años no están ni en empleo ni en educación (NiNis), en comparación con 15.5% de los hombres.

En México la diferencia es abismal: mientras que sólo el 10% de los hombres en ese rango de edad son NiNis, la proporción entre las mujeres es de 40%.

Las diferencias entre sexos en el mercado laboral también siguen siendo muy marcadas en México, y más incluso entre los adultos con educación terciaria.  Las mujeres con un título universitario sufren una tasa de desempleo superior a la de los hombres con estudios similares y cobran un 68% del salario que cobran los hombres. Esta diferencia salarial entre sexos es la tercera mayor entre los países de la OCDE.

La Educación Inicial es Fundamental para el Buen Desempeño Futuro

Esta edición del Panorama de la Educación también destaca otras áreas donde es necesario mejorar. Entre ellas se cuentan dar apoyo a los directores de escuela, atraer a más jóvenes a la profesión docente y asegurar que los estudiantes de origen desfavorecido tengan acceso a educación de calidad.

Asegurar el acceso a educación inicial, tanto en México como en el resto de los países OCDE, es también clave, pues la educación inicial influye en el rendimiento escolar futuro.

En México, 73% de los estudiantes que no asistieron a la educación preescolar tuvieron bajo rendimiento en PISA, comparado con el 52% de los que asistieron al menos un año a ese nivel educativo.

A pesar de que entre 2005 y 2012 la tasa de matriculación de niños de 3 años de edad en la educación preescolar casi se duplicó en México, alcanzando un 40% en el 2014 (promedio de la OCDE del 69%), el sistema de programas de desarrollo para la primera infancia (Educación Inicial) está aún poco desarrollado. Sólo el 5% de los niños de 2 años de edad se inscribieron en estos programas en el 2014 (promedio de la OCDE 34%). Además, un 63% de los alumnos asisten a instituciones privadas independientes.

Los Salarios de los Profesores en México son Competitivos

Otro elemento fundamental para asegurar la calidad de los sistemas educativos es mejorar la calidad de la enseñanza, para lo cual es necesario contar con maestros de buen nivel y bien remunerados.

En México los salarios de los profesores son competitivos en el contexto nacional. A diferencia de lo que ocurre en la mayoría de los países OCDE, los maestros de preescolar y primaria ganan un 35% más que el resto de los trabajadores con educación superior, los profesores de secundaria ganan alrededor de 74% más, y los maestros de preparatoria ganan 147% más, el porcentaje más alto de todos los países de la OCDE. Sin embargo, los maestros de estos niveles educativos en México trabajan más horas por año en la enseñanza que el promedio de los países de la OCDE.

Estimados colegas,

Para concluir, quisiera enfatizar que la mejora de la calidad educativa constituye la mayor oportunidad de transformación para México. Por ello es fundamental que se siga avanzando en la implementación de la Reforma Educativa, poniendo a los alumnos en el centro del sistema y creando una cultura del mérito, tanto entre alumnos como entre docentes.

La transformación del modelo educativo es también una dimensión fundamental de esta reforma, indispensable para contar con ciudadanos informados y críticos, que cuenten con las herramientas necesarias para enfrentar los desafíos del siglo XXI.

Todo ello va de acuerdo con las mejores prácticas internacionales y con el trabajo en materia de competencias que la OCDE está desarrollando con México. No podemos desaprovechar esta oportunidad. Cuenten con la OCDE para seguir fortaleciendo ese gran pilar del futuro que es la educación.

Spotlight: How to Assess China’s G20 Presidency

Spotlight article by Ambassador Noe van Hulst, Ambassador of the Netherlands to the OECD 

“The overall result in the final [G20 Leaders’] communique has been coined The Hangzhou Consensus: linking a vision based on innovative, sustainable economic growth and a well-balanced policy mix with forcefully tackling inequalities and promoting an open global economy.  It is encouraging to see China make the case for a rules-based global system of open trade and investment. Of course, this commitment also should have important consequences for domestic policies in China, as well as in other G20 countries. In this context, it’s a remarkable step that G20 leaders have now agreed to tackle the excess capacity in the steel market.” Read full article

Other useful links