Editor’s Note: The release of the OECD Digital Economy Outlook 2024, Volume 2 at the Tallinn Digital Summit provides invaluable insights into the policies and strategies shaping the future of the global digital economy. The report examines emerging priorities, including bridging connectivity divides, fostering cybersecurity, and aligning digital policies with sustainability goals. It highlights the growing importance of inclusive growth, particularly in addressing gender disparities and equipping workers with future-ready skills. This comprehensive analysis is essential for policymakers, business leaders, and digital transformation professionals seeking to navigate the complexities of the digital age.

Attended by ComplexDiscovery OÜ, the summit provides a vital platform for understanding the global priorities and opportunities that will define the future of digital transformation.

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OECD Releases Digital Economy Outlook 2024, Volume 2, at Tallinn Digital Summit

ComplexDiscovery Staff*

Tallinn, Estonia – Today, on the opening day of the Tallinn Digital Summit 2024, the OECD Digital Economy Outlook 2024, Volume 2 was officially released, offering a comprehensive analysis of the evolving global digital landscape. The report, presented by the Organization for Economic Cooperation and Development (OECD), explores the new directions in digital priorities, policies, and governance frameworks shaping the economies of its member and partner countries.

This year’s publication builds on Volume 1, which examined the technological drivers of digital transformation and their impacts. Volume 2 shifts focus to the strategic frameworks enabling that transformation, including the foundations that support connectivity, drive innovation, and foster trust. It identifies pressing challenges, such as cybersecurity vulnerabilities and digital inclusion while emphasizing the opportunities created by aligning digital transformation with sustainability goals.

Digital Priorities and Governance

National digital strategies have become essential tools for governments to manage the opportunities and challenges of digital transformation. According to the OECD, over 90% of its member and partner economies have implemented or are developing comprehensive digital strategies, with an increasing trend toward centralized governance. In 2023, 42% of these strategies were overseen by senior government bodies, such as prime ministerial offices or presidential chanceries, compared to just 12% in 2016. Dedicated digital ministries have also become more prominent, with their share of responsibility for developing these strategies rising from 24% in 2016 to 47% in 2023.

These strategies often target a mix of priorities, including artificial intelligence (AI), 5G, and blockchain technologies, while also addressing critical policy areas such as data governance, cybersecurity, and inclusion. Governance frameworks have evolved to include stronger monitoring and evaluation mechanisms, with nearly 90% of countries using quantitative targets to assess progress. Budgetary allocations vary significantly, with some nations dedicating over 3% of GDP to implementing their digital strategies, while others take a more decentralized approach, aligning funds with specific regional initiatives or policy areas.

Connectivity and Bridging Divides

The demand for high-speed, reliable internet services has surged, driven by the rise of remote work, e-learning, and data-intensive applications. Fibre broadband has emerged as the dominant fixed broadband technology in OECD countries, accounting for 42% of subscriptions in 2023, up from 28% in 2019. This reflects a concerted effort by governments and private sector actors to transition from older technologies like copper DSL to scalable, future-proof networks.

At the same time, mobile connectivity has been revolutionized by the rapid deployment of 5G networks. By mid-2024, 37 of 38 OECD countries had rolled out 5G services, and the average number of 5G connections per 100 inhabitants reached 38.6, up from 25 just a year earlier. Countries such as the United States, Korea, and Finland lead in adoption, with more than 60 connections per 100 inhabitants. The shift toward standalone 5G networks, which offer improved latency and support for massive numbers of devices, signals the growing reliance on mobile connectivity as a cornerstone of the digital economy.

Despite these advancements, connectivity gaps persist. Urban residents in OECD countries experience download speeds that are 50% faster than those in rural areas. Affordability also remains a barrier, particularly for low-income households. While mobile broadband prices have decreased over the past decade, the cost of bundled services like internet, voice, and television has remained relatively stable, limiting access for some demographics. Policies to address these divides are critical for ensuring equitable participation in the digital economy.

Skills for the Digital Age

Digital transformation has reshaped the labor market, increasing demand for specialized skills while rendering certain traditional roles obsolete. However, foundational skills in areas like science, mathematics, and reading have declined among students in OECD countries, creating a significant barrier to workforce readiness. The share of top-performing 15-year-old students in these fields fell from 4% in 2012 to 3% in 2022, highlighting the need for systemic reforms in education.

Policymakers are prioritizing lifelong learning initiatives, public-private partnerships, and innovative approaches to skills development. Recognizing non-traditional forms of education, such as online courses and micro-credentials, is becoming increasingly important. Many countries are also investing in STEM education and talent attraction programs, including scholarships and streamlined visa processes for high-skilled workers.

Digital Security and Trust

The proliferation of digital technologies has introduced complex security challenges. Managed service providers, which play a critical role in global supply chains, have become frequent targets for cyberattacks, posing systemic risks. Advances in cryptographic technologies, including quantum-resistant solutions, are essential to safeguarding digital infrastructure and protecting against emerging threats.

Trust in digital environments remains tenuous, with privacy concerns preventing many individuals from fully participating in the digital economy. Over half of those surveyed by the OECD reported avoiding certain platforms due to fears of data misuse. Efforts to build trust must include enhanced transparency, stricter data governance frameworks, and innovative media literacy programs to combat misinformation. The report emphasizes the need to rethink these initiatives to better reflect the ways in which people consume and assess information online.

Innovation and Sustainability

Digital technologies are increasingly seen as vital tools for achieving environmental goals. The “twin transitions” of digital and green strategies highlight opportunities for aligning technological advancements with sustainability objectives. Examples include IoT-based precision agriculture, which optimizes resource use, and AI-driven energy systems that improve efficiency and reduce costs. These innovations are helping sectors like transportation and energy align with decarbonization targets.

However, digital infrastructure itself has an environmental impact, particularly in terms of energy consumption. Data centers and communication networks are significant contributors to global electricity use. Policymakers must strike a balance, leveraging digital technologies to drive sustainability while minimizing their environmental footprint.

Women in the Digital Economy

Gender disparities remain a critical challenge in the digital economy. Women account for only 11-24% of ICT specialists in OECD countries and represent just 4% of ICT-related patent authors. The share of venture-funded startups led exclusively by women is similarly low, at 6%. Addressing these disparities is essential for fostering an inclusive and innovative digital ecosystem.

The report highlights targeted strategies to promote STEM education for women, support female entrepreneurship, and improve workplace inclusivity. Such initiatives are vital for unlocking the full potential of the digital economy.

Emerging Technologies and Policy Adaptation

Artificial intelligence continues to dominate digital policy agendas, with nearly all OECD countries integrating AI strategies into their national frameworks. However, the rapid development of AI, alongside technologies like blockchain and IoT, presents regulatory challenges. Policymakers must address issues such as algorithmic bias, transparency, and accountability while fostering innovation. Cross-border collaboration will be critical for harmonizing standards and addressing global challenges like misinformation and cybersecurity.

Economic Impacts and Market Openness

Digital transformation is reshaping global labor markets, creating new opportunities while displacing traditional roles. Policies that promote market openness, competition, and innovation are critical for fostering economic growth. Lifelong learning initiatives are increasingly essential for helping workers adapt to these shifts and remain competitive in the evolving economy.

Recommendations for Policymakers

The OECD offers a series of actionable recommendations:

  • Invest in infrastructure to bridge connectivity divides and improve affordability.
  • Strengthen cybersecurity frameworks to protect critical supply chains and infrastructure.
  • Foster digital skills development through public-private partnerships and accessible education pathways.
  • Align digital strategies with environmental goals to support decarbonization efforts.
  • Promote inclusivity by addressing gender and regional disparities in digital participation.

Shaping a Connected, Inclusive, and Sustainable Digital Future

Released today at the Tallinn Digital Summit 2024, Volume 2 of the OECD Digital Economy Outlook 2024 provides a roadmap for navigating the challenges and opportunities of digital transformation. By addressing key priorities such as connectivity, trust, and innovation, policymakers can ensure that digital technologies contribute to a future that is inclusive, secure, and sustainable.

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