Newsletter 28 January – 8 February

Check out my latest newsletter for a snapshot of my recent engagements.

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Global Parliamentary Network: Towards better housing opportunities

Opening remarks delivered at the 2019 Global Parliamentary Network meeting held at OECD headquarters in Paris, France on February 14.

I am very pleased to be here again with the OECD parliamentary network, and to benefit from your inputs for a very important project that we are about to launch, that is the housing project.

To start the conversation, let me put housing in the context of the major strategic objectives of the OECD, that is to promote the well-being of people, and to achieve an inclusive growth agenda.

Since we last met in the previous edition of this Network, in the last Ministerial, members adopted the Policy Framework for Inclusive Growth, with concrete policy options to address the increased inequalities of income, wealth and opportunities. Affordable housing in part of this agenda.

However, since then, we have been documenting that the inequality trends are not receding.

With our “Broken elevator” report, we confirmed that social mobility in many OECD countries has stalled, and that it  will take 4.5 generations, or 135 years for a child born in the bottom of the income scale to reach the middle.

In one more month we will present the “middle class report” that confirms that, in many countries, the middle class have been confronting stagnant incomes for a long period of time, while prices of essential consumption items, such as education, health, and housing have increased above inflation. This is why we call it the “squeezed middle class”.

Housing is particularly important, as almost by definition, belonging to the middle class has been equated to owning a house, and the soaring prices that we have experienced in many markets, as well as the mortgage crisis, have questioned this principle.

This context underlines the importance to ensuring affordable, accessible and good quality housing as a key pillar of an agenda of inclusive growth. Life chances are determined by the place you live and the conditions you experience, and access to good quality public services are also determined by your neighborhood.

This is not an easy task, above all if we look at the fact that housing needs are frequently unmet, the cost can reach too high levels, and the quality is also not yet there.

Today a significant number of people across the OECD are homeless, numbers vary from between 1 to 10 in every thousand, and too many households live in low-quality dwellings or face housing costs they cannot afford.

Housing costs represent the largest single expenditure for many individuals and families, around 21% of the disposable household income in OECD countries, going from 15% in Korea, to 35 or 40% in high demand areas such as Oslo or Brussels.

This housing cost burden is particularly high for low-income households, where it can reach 40% of their disposable income in 16 OECD countries in 2016.

Young people are also struggling to get onto the property ladder, and are having to stay longer in potentially precarious rental housing, or living with mum and dad.

Then there is the issue of quality housing. In the OECD, the average home contains 1.8 rooms per person. However, this varies; compare Canada where the average home contains 2.5 rooms per person, with Mexico or Turkey there is only one room per person.

Two out of 10 people in the OECD live in overcrowded housing. What is worse is that in European OECD countries, on average, more than 1 in 5 children live in an overcrowded household, and poor children are at higher risk. This could even impact their learning experiences at school, as overcrowd dwellings may bring higher level of stress that do not contribute to learning.

Low income groups can also accumulate disadvantages related to housing, as they can be pushed out of capital city regions, where many of the best employment opportunities are; or condemned to poor neighborhoods, where crime, social unrest and pollution are particularly problematic.

Initial policy recommendations

The housing project will be looking at the housing sector in its broader sense, and our Chief Economist will share with you the details of this important undertaking.

But we should not forget that, as with many other assets, the distribution and accessability of housing is highly skewed, and any policy agenda should be frame taking into account this starting point. So responding to the needs of those at the bottom of the income distribution will be the best test for an OECD contribution.  We count on you, to help us advance in this domain.

Many thanks.

Remarks for the Roundtable for Policymakers at the OECD Forum on Due Diligence in the Garment and Footwear Sector: The urgency of responsible supply chains in the apparel sector

Good afternoon, and welcome to the Roundtable for Policy makers, part of the OECD Forum on Due Diligence in the Garment and Footwear Sector. I am very pleased to be opening this inaugural Roundtable focused on  the garment and footwear sector and would like to thank the many representatives from governments around the world for joining us.

Let me also welcome and congratulate Christine Kaufmann, the new Chair of the Working Party on Responsible Business Conduct, who will be chairing today’s important discussions. It’s great to see another woman take the lead!

Today we’ll be discussing how globalisation in the context of the apparel sector can work for everyone – for workers, consumers and investors.

In many ways, the apparel sector represents the positive outcomes of globalisation in terms of increased specialization, technology transfer, and inclusive growth.

The sector employs up to 75 million people globally and indirectly hundreds of millions more. And importantly, three-quarters of these workers are female, making this sector a gateway into formal and stable employment for many women.

But the sector also embodies some of the darker outcomes of globalisation[1] including downward spiralling price pressures and insufficient resources directed towards decent work and clean production processes in the context of tight margins and short lead times. We all remember the atrocity of the Rana Plaza Factory in 2013, claiming 1,130 lives and also the 2012 factory fire in Pakistan.[2]

We must also be very alive to the problems of forced labour, and child labour, which is truly abhorrent. Of the 152 million children in child labor in 2016: 73 million were in hazardous work,  and 48 percent were below age 12.

I am in great admiration of my friend Mr Kailash Satyarthi, who won a Nobel Prize for his work rescuing thousands children in India from forced labour.

Unsurprisingly, the topic of responsible supply chains is an issue that has risen high on the global agenda as it is a lever to achieve more inclusive growth.

For example, in 2018 G20 Labour Ministers called on countries to take action to “promote sustainable supply chains” consistent with the OECD Guidelines for Multinational Enterprises.

Additionally, more countries, like the United States, UK, France, Australia, the Netherlands and Norway, are including responsible supply chain management in national policy and regulation. We will be hearing more about these policy developments later this afternoon.

Market levers are also very important to consider, and we’ve seen increased scrutiny of supply chains driven by investors and increasingly by consumers.

Consumers are demanding more transparency; in a recent survey, 78% said it is somewhat or very important for a company to be transparent.[3]

Consumers are also increasingly boycotting companies that use cheap labour to produce cheap clothing. Sure, everyone loves a bargain, but what is the true cost behind that saving?

How many people have been paid pittance for how many days so that costs at the consumer end can be kept low?

Recently, Norges Bank Investment Management, one of the world’s largest sovereign wealth funds excluded apparel companies from their investment portfolios. This was responding to perceived human rights risks, and shows an increased oversight by investors on this issue.

So, the message is clear: the apparel sector in garment producing countries will only achieve growth in exports and investment if the garment and footwear industries address the labour, human rights and environmental risks in the supply chain.

And, in terms of market concentration, the onus falls on just a handful of the largest companies. Concentration in the fashion industry is high, with 97 percent of economic profits for the whole industry earned by just 20 companies, most of them in the luxury segment.[4]

Unfortunately, promoting responsible business conduct is becoming increasingly difficult as we see increased fragmentation of production processes.[5]

The OECD can help: we are at the forefront of promoting responsible supply chains that drive competitive and inclusive markets.

Our aim is to create level-playing fields and ensure that companies are not cutting corners and resorting to bad practices to gain market advantage.

Our 2017 Due Diligence Guidance for Responsible Supply Chains is a practical framework that shows companies how to meet global expectations on establishing responsible supply chains. It takes into account both the diversity of the sector as well as the complexity of the challenges that the sector faces in its recommendations. Let me highlight three of them:

First, promoting a collaborative approach between industry at different stages of the supply chain.

SMEs are interacting with an increasing number of partners: brands, retailers, manufacturers, spinners, mills and upstream producers.

By addressing the risks in a multi-stakeholder way, enterprises have the potential to remain competitive, while systematically addressing human rights, labour and environmental risks in their supply chain.

Of course, collaboration does not alter the responsibility of the individual enterprise to identify risks and mitigate harm but it is a useful way of carrying out due diligence.

Secondly, promoting meaningful stakeholder engagement ensuring that all groups affected—employees, communities impacted by operations, and governments— are both heard and given the chance to provide input to decision-making processes such as on-site supplier assessments, development of corrective action plans, impact monitoring, etc.

Thirdly, incentivising responsible purchasing practices to ensure that companies are integrating the true cost of producing responsibly into pricing decisions.

For example, irresponsible purchasing practices can have a significant impact on supplier level wages. Inaccurate technical specifications from buyers were associated with 22% lower wages at the supplier level whereas buyers that offer prices covering at least productions costs were associated with nearly 10% higher wages at the supplier level.[6]

Lastly, as with everything, there is a gender angle here.

As I mentioned that 75% of employees in the industry are women, it is essential to integrate a gender-lens into due diligence.[7]

We know that women are more likely to be paid lower wages, be engaged in informal or irregular employment, and face workplace harassment. So women have to be involved in decision-making processes, assess and appreciate the disproportionate risks to women in this sector, and analyze the accessibility of grievance mechanisms to women.

Practically, at the OECD we are committed to boosting the capacity of companies to carry out these due diligence considerations by facilitating shared learnings to support a level playing field and conducting research to fill knowledge gaps. For example:

  • We are collaborating with the China National Textile and Apparel Council, the Confederation of Indian Industry and are exploring partnership with the Cambodian government and the Garment Manufacturers Association in Cambodia on establishing sector-wide approaches to due diligence that are rooted in the national context.
  • We are collaborating with the EU and the ILO on promoting responsible supply chains in Asia in close partnership with China, Vietnam, and Japan.

But most importantly, we believe in the role of governments to enable and monitor responsible supply chains, and this is what brings us here today. We at the OECD are committed to collaborating with governments globally to support policy which builds responsible supply chains.

For example:

  • We are analysing the policy options for governments in eradicating forced labour, modern slavery, human trafficking and child labour in global supply chains and providing recommendations in collaboration with Alliance 8.7 to the G20.
  • We convene governments to share learnings on how they can embed due diligence into their purchasing and procurement decisions;
  • And we provide recommendations to governments on how they can attract responsible investment through our Investment Policy Reviews.

The OECD is also working with the G7 on sustainable supply chains and combatting modern slavery, and we continue to provide access to remedies through our National Contact Points for the OECD Guidelines for Multinational Enterprises.

There is also broader recognition that we need better performance by all on international standards. The OECD is the house of many of those standards.

Today we will have the opportunity to consider many of these themes including:  capacity building of industry and government on responsible business conduct standards, providing access to remedy, legislating and engaging with multi-stakeholders and the link between trade and responsible investment.

We have over 20 governments represented in this room here today and therefore are presented with the extraordinary opportunity to listen and learn from one another and to chart paths forward for greater collaboration. Today’s dialogue is only half a day, but we hope that it is just the beginning.

As you are considering these issues, I invite you to reflect on how the OECD can support policy makers. We stand ready to work alongside you in moving these important issues  forward. As an immediate next step, we would like to invite you to the Global Forum on Responsible Business Conduct to take place in Thailand in collaboration with the UN in June.

But count on the OECD, as we really are a market leader in responsible business conduct, and this is an important part of us all achieving inclusive growth and a globalization that doesn’t involve a race to the bottom.

[1] [1]https://cleanclothes.org/resources/publications/factsheets/general-factsheet-garment-industry-february-2015.pdf/view and https://www.ilo.org/wcmsp5/groups/public/@ed_dialogue/@sector/documents/publication/wcms_300463.pdf

https://www.wto.org/english/res_e/statis_e/wts2018_e/wts2018_e.pdf

[2] http://oecdinsights.org/2017/01/31/fashion-industry-oecd-due-diligence-instrument/

[3] In a survey of 10,000 consumers around the world  (Fashion Transparency Index)

[4] The State of Fashion 2019: A year of Awakening, (Mckinsey) 2019. The top 20 companies include Nike, H&M, Hermes, Adidas, Gap, Burberry, Michael Kors amongst others.

[5] Outlook 2019: Apparel industry challenges and opportunities, Just Style. https://www.just-style.com/analysis/outlook-2019-apparel-industry-challenges-and-opportunities_id132645.aspx

[6] http://mneguidelines.oecd.org/OECD-Garment-Forum-2019-session-note-Monitoring-Purchasing-Practices.pdf

[7] Ibid. (1)

Opening Remarks for the 2018 Sporting Chance Forum

Remarks delivered on 12-12-2018 at UNESCO, Paris.

Ladies and Gentlemen,

I am delighted to be here today for this important event to represent the OECD, which is part of the Advisory Council of the Centre for Sport and Human Rights and is committed to its success.

Sport teaches millions of people about values such as fair play, team spirit, respect for others, but also the importance of playing by the rules and of having a level playing field.

Sport has the potential to elevate us, but many recent examples show that some aspects of sport can have adverse effects, notably on human rights. I am thinking of corruption associated with sporting events. I am thinking of violations of human rights against workers and communities affected by sports-related infrastructure projects.

I am thinking of the recently uncovered abuses suffered by athletes, just to name a few.

These risks are exacerbated by the fact that sport is now a booming industry which by some estimates generates more than 145 billion dollars in annual revenue.[1] In particular, mega-sporting events involve high levels of public expenditure, large-scale investment from sponsors, together with high-value media contracts. This creates a high stakes, high risk environment for sports organisations, whose operations are often subject to little external oversight.

This shows that respect for human rights in the sporting context is a crucial and multifaceted challenge for governments, companies and sport organisations. It must be addressed from different angles, and this is what the OECD is trying to achieve. Let me give you three examples of OECD initiatives which seek to address sport-related human rights impacts.

First: on the anti-corruption front, the OECD, together with other international organisations, sports organisations, governments and stakeholders, has established in 2017 the International Partnership against Corruption in Sport. IPACS works towards better policies which can help pre-empt a number of challenges in those areas where the risk of corruption is particularly high.

Last week in London, IPACS held a high-level meeting where more than 100 Ministers, international sports organisations and experts reaffirmed their commitment to tackling corruption in sport, focusing on three specific areas where sport is particularly prone to corruption risk: public procurement for sport related infrastructure; managing conflict of interest in the selection of major sporting events; and strengthening the application of global governance standards to the world of sport.

These commitments were further strengthened by G20 countries’ recognition of IPACS in the new 2019-2021 G20 Anti-Corruption Action Plan adopted by Leaders in Buenos Aires. Tomorrow morning, the OECD Director for Legal Affairs, Nicola Bonucci, will discuss in more detail the achievements and future plans of this important multi-stakeholder initiative.

Second, on the remedy front, the OECD coordinates a network of non-judicial grievance mechanisms: the National Contact Points for Responsible Business Conduct. The NCPs are national bodies in charge of implementing the OECD Standard for Responsible Business Conduct, the well-known OECD Guidelines for Multinational Enterprises. In that capacity, NCPs can receive cases against companies having allegedly breached the Guidelines.

NCPs provide a platform of dialogue to reach a solution for the issues raised.

As I said, in many instances, sport is a business, and NCPs have provided remedy in sport-related cases. To give just one example, in 2017 the Swiss NCP helped FIFA and the global union federation Building and Wood Workers International reach an agreement regarding the labour rights of workers employed on World Cup stadium construction sites in Qatar.

Third: on the local development front, in May this year the OECD Council, our highest political body, adopted the OECD Recommendation on Global Events and Local Development. This Recommendation applies to sporting events and sets the framework conditions to ensure that such events deliver on the promises they hold for host cities and nations.

It contains concrete guidance for Governments regarding planning, delivery, evaluation, governance and partnerships with other actors.

The Recommendation promotes the respect of human and labour rights throughout the event lifecycle to ensure community benefit and the creation of quality jobs. The OECD has also developed a forward-looking Implementation Strategy to help cities and countries achieve more sustainable global events and build stronger capacities to leverage local benefits for all.

These three examples show the incredible complexity of tackling all possible human rights issues linked to the world of sport, and how this is necessary to ensure the value and benefits of sport to communities and the economy. They also show that international organisations, governments, and private actors can come up with solutions for better respect for human rights through creative multilateral initiatives.

Thank you

[1] Global Corruption Report: Sport, Transparency International, Feb 2016. Changing the Game: Outlook for the Global Sports Market to 2015, PricewaterhouseCoopers.

Opening Remarks at the OECD-Trade Union Advisory Council Liaison Committee Meeting

Remarks delivered on 10-12-2018 in Paris, France.

Dear Pierre, Ambassadors, Ladies and Gentlemen,

It is my pleasure to welcome you to the OECD, and to exchange on the very timely topic “Growth and accountability today, just transition tomorrow”.

This is a time for dialogue. At the OECD, we are proud to have such strong links with Trade Unions. We share the same values, and reading your paper reinforced this for me. We both put people at the core of what is important.

Since we last met, the Council at the ministerial level adopted the OECD Framework for Policy Action on Inclusive Growth to look for ways in which growth can deliver for all. This does not look easy.

As your discussion paper highlights, the global economy is losing steam. Global GDP growth is projected to ease from 3.7% in 2018 to 3.5% by 2020, according to our latest Economic Outlook.

Tariff hikes and uncertainty about further protectionist actions are contributing to a slowdown in trade growth and are affecting investment plans. I just came back from the G20 Summit, and I can tell you that discussions were tough, but there was also confidence that agreements are possible.

Wages have not kept up with productivity growth in several countries and we see rising market concentration. Real wage growth has been a meagre 1.2% in recent years.

The digitalisation of our economies is also providing both opportunities and risks that we must fully understand and be prepared for, particularly regarding the future of work.

I am glad to see all these issues on today’s agenda. Before we begin, let me set the scene on two of these issues: ensuring business accountability; and the impact of digitalisation on our economies and workers.

Ensuring accountability and a level-playing field for business operating internationally is a priority for the OECD and we are working to extend the reach and impact of our legal and policy instruments.

For example, the fundamental objective of our ground-breaking efforts on Base Erosion and Profit Shifting is to ensure that profits are taxed where value is created. This gets more complicated with the implications that digitalisation has on tax. So we are working to seek a long-term solution, which can benefit all countries, and provide certainty to businesses.

The OECD Anti-Bribery Convention is now ratified by 44 countries including Argentina, Brazil and South Africa, and covers over 70% of world exports[1].  Since ratification, over 600 individuals and entities have been sanctioned for foreign bribery, facilitating a “clean up” of the practices of many companies.

Much progress has been made on Responsible Business Conduct as today 48 countries adhere to OECD Guidelines for Multinational Enterprises, representing 80% of global outward FDI[2]. To help companies implement the Guidelines, we have developed Due Diligence Guidance for a number of specific sectors. And at the MCM in May, Ministers endorsed the general Due Diligence Guidance which can be used by any company in any sector.

In addition, we have put in place a unique peer review mechanism to strengthen the National Contact Point system and a new Action Plan has been developed for 2019-2021.

The OECD/G20 Principles of Corporate Governance were also reviewed and 60 non-members have subsequently joined.

But I agree with the reflections in your paper, that besides strengthening implementation, we should create more synergies between these instruments for more impact on the ground. We are moving in this direction, for example, the DAF/NAEC event on Corporate Governance for Sustainable Prosperity held in April aligned well with your suggestions.

The digital transformation is having significant implications for the labour market. As your paper mentions, we estimate that around 14% of jobs are likely to be automated in the near future. Another 32% will be change significantly. The way we work is already changing too: almost 1 in 3 workers has a non-standard job, with great variance in terms of pay, job security, access to social protection, and collective bargaining coverage.

There is also a growing concern about market concentration as indicated by increasing mark-ups. We are working to better understand the nature of changes in business dynamics, and analysing whether competition tools designed for traditional markets need to be adapted to the digital economy.

Besides ensuring that the digital revolution continues to deliver for productivity and growth, ensuring connectivity and affordable access for all; strengthening skills, fostering new jobs and ensuring social protection; ensuring sound competition and market openness as well as the protection of individual’s privacy and consumer rights, are all key elements of a people-centred approach to digitalisation. It’s essential to close the digital divides, for instance between rural and urban areas, and men and women. Gender divide is staggering, but all in all it is important to enhance policies for people to participate.

Our new Jobs Strategy launched last week puts an increased focus on social dialogue and the need for collective bargaining systems that are inclusive and flexible enough to deliver good jobs and adapt to changing economic conditions. We have also recently taken on the secretariat function for the Global Deal, which will help us supporting workers in the future of work and in the platform economy.

All this does not happen in a vacuum. We should continue to address the increased inequalities of income and opportunities all across the board.

Finally, to promote future welfare and prosperity, we need to transition to a low-carbon economy.  OECD research shows that climate-compatible policies can increase economic growth up to 2.8% on average across the G20 countries by 2050. But, while the net effects are likely to be positive, some communities will be negatively affected. We need to make sure that workers receive the support they need through a just transition.

The transition can also be done through the tax system. The OECD publications on Effective Carbon Rates and Taxing Energy Use provide useful data in this regard. It is not easy, as we have seen for France, so the policy packages to move in this direction are really important.

And of course we continue to support the G20 because all of this needs multilateral cooperation. Indeed, I am going to Tokyo next week for a series of discussions on Japan’s presidency. The recommendations and the views that you bring through the L20 are also important to ensure G20 commitments are fit for purpose.

In all these efforts, TUAC is a valued and trusted institutional partner of the OECD. You have been proactive partners in providing a constant reminder that decent jobs and wages need to be part of our compass for the recovery, and stressing that only through addressing inequalities we can rebuild trust.

I look forward to a stimulating and interactive discussion today.

Thank you

[1] DAF calculations

[2] DAF calculations

Panel Remarks: Cultural policies and beyond: Culture as a lever for Inclusive Growth

Remarks delivered in Venice at the OECD Conference on Unleashing the Transformative Power of Culture and Creativity for Local Development

Distinguished Guests, Ladies and Gentlemen

I’m pleased to be able to have this conversation, as I think culture and inequalities are linked, although the link is often overlooked. Indeed, in times of fiscal austerity as we have seen in Europe, cultural activities are often the first to suffer from government cuts.

Let me first introduce the panel. With us today we have:

  • Gianluca VACCA, Under State Secretary at the Italian Ministry of Cultural Heritage and Activities
  • Caroline NORBURY, CEO of Creative England, and Member of the Board of European Creative Industries Network
  • Ambassador Umberto VATTANI, President of the International University of Venice

I am looking forward to hearing your views. But before we do, I would just like to briefly set the scene for the discussion.

Let me start with the big picture: rising inequalities and the persistent lack of inclusive growth is one of the most urgent global challenges we face today.

Top incomes continue to rise: the richest 10% now command around ten times the income of the poorest 10% on average across the OECD, up from seven times 25 years ago.[1] The picture in terms of wealth is worse: the top 1% now holds 19% of total wealth across the OECD.[2]

This skewed distribution with concentrations of power, wealth and influence at the top of the income distribution is fuelling a backlash against globalization and the return of populism and protectionism in many countries. Citizen’s trust in governments has plummeted: only 42% of people trust their governments across the OECD, whilst 54% of the general population trust financial service providers to “do the right thing”.[3]

The OECD has responded by advocating to place the person back at the centre of public policy, to move away from overvaluing GDP growth as a means in itself, and rather place greater value on people’s wellbeing.

Our Policy Framework for Inclusive Growth is designed to help countries create fairer, more inclusive and sustainable growth. The Framework has three key pillars: invest in people and places left behind; support business dynamism and inclusive labour markets; and rebuild trust with more efficient and responsive governments.

Art and culture, as the finest expressions of creativity, values and fundamental humanity, play a role in these elements.

Firstly, culture and art can be tools for bridging exclusive social divides and promote social cohesion. As ideological camps are becoming more entrenched, we are losing track of our values of empathy, tolerance, and understanding. Not only are these fundamental human values necessary for strong societies, but it’s these socio-emotional skills that are necessary to create any kind of economic, social, or political progress or consensus.

Communities around the world are therefore using cultural programmes to integrate disadvantaged populations more effectively into economic and social life. This is also important in the integration of migrants as questions of identity and belonging become increasingly complex.

For example, the UN Migration Agency and programmes like Creative Europe are endorsing creative solutions for both adults and children to bring individuals together around art and culture. Art, music, and sport can help us learn and appreciate different cultures, and provides common ground from which to build empathy, understanding, and tolerance.

Second, socio-emotional skills are essential in the context of the future of work and the dawn of digitalisation, where they are becoming  increasingly desirable.

Over the past three years the proportion of job adverts requiring “critical thinking” has risen by 158 per cent, “creativity” by 65 per cent and “team work” by 19 per cent. Employers value workers that are well-rounded and can think creatively. Acquiring these skills will be essential for children’s learning. Formal education should cultivate the creativity and critical thinking skills of students to help them succeed in modern, globalised economies based on knowledge and innovation.

For the first time, this year the OECD’s PISA included “Global Competence” among its assessment frameworks. In 2021, PISA will test Creative Thinking for the first time.

Providing wider opportunities to cultural and artistic enrichment programmes can therefore be an effective way of building these socio-emotional skills in students and workers, preparing them for new forms of work.

For example, enhancing access to libraries and cultural centres, museums and cultural services, targeting cultural policies to disadvantaged populations or remote areas, is an example of investment in people and places left behind that can promote greater inclusion in the future of work. Governments should invest in these services, particularly in poorer regions, where people feel left behind.

A lack of cultural activities can contribute to the accumulation of inequalities from a young age. Parents in low socio-economic households might not have the time, nor the means to spend on cultural activities. We can see divides starting to emerge very early on, for example, if families aren’t providing sufficient learning stimuli to their children, it can lead to deficiencies in brain development, which is difficult to make up at a later stage. Research shows that children from low socio-economic status may hear up to 30 million words less than children in wealthier households.[4] So by the age of three, a child’s future learning outcomes could be significantly pre-determined.

What’s more, research has shown that cultural activities can have a positive effect on mental and physical well-being, helping to reduce stress and promote relaxation. Specifically, people often going to concerts, museums, art galleries, or the cinema, can have lower mortality rates compared to people who rarely engage in these activities, even when age, gender, social background, education and income have been controlled for.[5]

Third, there are also economic benefits to using culture as a tool to achieve more inclusive growth. Specifically, the cultural sector can act as a powerful lever for female empowerment and in the inclusion of minorities.[6]

In most European countries the female employment rate in culture exceeds their employment rate overall. In Latvia, for example, the cultural employment rate of women is almost 70% while the country’s overall female employment rate remains at 50%.[7]

Regions can significantly develop by putting the cultural and the creative sectors front and centre of their development strategies, reducing regional and place-based inequalities.[8] As well as providing employment, cultural activities also breathe life into cities, inspiring innovation and engagement in city life while also building social cohesion and strengthening a distinctive shared identity for citizens.[9]

Focusing on cultural preservation and investment can also help communities spur a culture of grassroots innovation, dynamic creation of start-ups and a vibrant social innovation sector, which are key to support business dynamism.

Ultimately, inclusive growth is about providing equal opportunity and access to the benefits of growth in order to promote greater peace and equality. The goal is to promote wellbeing and revitalise the aspects of our world that bring people joy. To allow more people to benefit from the freedom of expression that growth provides. Thus culture is not just a lever for inclusive growth. Rather, it is both a tool to achieve inclusive growth and the ultimate end goal.

[1] OECD (2018), The Policy Framework for Action on Inclusive Growth, OECD Publishing, Paris.

[2] OECD (2017), Bridging the Gap: Inclusive Growth 2017 Update Report, OECD Publishing, Paris.

[3] OECD (2017), Bridging the Gap: Inclusive Growth 2017 Update Report, OECD Publishing, Paris and Edelmann trust Barometer 2018 (reporting on survey results from between October and November 2017).

[4] Hart and Risley (1995) cited in Educational Opportunities for All, OECD 2017

[5] Impact of Culture on Individual Well-being, PierLuigi Sacco – Professor of Cultural Economics, IULM University (Milan); Enzo Grossi – Advisor Padiglione Italia EXPO 2015

[6] UNESCO, https://en.unesco.org/news/gender-inequality-persists-world-culture-underlines-new-report

[7] https://ec.europa.eu/eurostat/documents/3217494/7551543/KS-04-15-737-EN-N.pdf/648072f3-63c4-47d8-905a-6fdc742b8605

[8] UNESCO, Culture for Sustainable Urban Development

[9] http://unesdoc.unesco.org/images/0024/002459/245999e.pdf