KEY ISSUES FOR DIGITAL TRANSFORMATION IN THE G20

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usinesses or co-operatives of local residents (PPPs are discussed in more detail in Chapter 2 on infrastructure). There have also been some cases in which governments have largely financed new infrastructure, such as the national wholesale fibre networks in Australia and Singapore, although private investment provides the largest contribution in most G20 economies, such as in Canada, India and the United States. Regulatory frameworks should be reviewed to ensure that they are appropriate for the levels of investment necessary to achieve their policy goals. Regulators should promote an optimal level of investment and robust competition in high-speed networks and services. Spectrum is another area where consideration could be given to focus less on generating revenue for governments and more on establishing an accurate market value. Additionally, a role that is best placed with governments and international organisations is strengthening the collection of internationally comparable statistics on the use of digital infrastructures, particularly global data traffic flows. Better understanding of the evolving state of fixed and mobile broadband across the world will lead to better, more targeted policy actions by governments. A call to the G20 to work with international organisation such as the OECD and the ITU could advance this work. The availability of financing for innovative and new business models is influenced by a range of policies (OECD, 2015g). Framework policies are one important factor that affects the financing of innovation: significant benefits arise from increased access to seed and early-stage financing, as well as from increased efficiency in the judicial system. Promoting effective and predictable insolvency regimes to ensure creditor rights can strengthen the confidence of a broad range of investors in SME markets. In addition, taxation, product market as well as employment protection legislation, policy-induced barriers to exit (e.g. excessively strict bankruptcy laws) are found to impact the financing opportunities for companies. Reducing such barriers will accentuate competitive pressures, encouraging inefficient firms to exit, and channel resources to firms that are best able to make use of the resources. While such measures are typically implemented with other policy objectives in mind, their unintended implications for innovation have to be taken into account. Types of policies that could be considered include: Supply-side interventions: A number of countries have had grants, loans and/or guarantee schemes in place for many years, for example increasing tax incentive programmes. These include front (investment) and back (capital gains) end incentives for investments in young firms. There has been a noted increase in the use of equity instruments, particularly in co-investments funds and fund-of-funds which seek to leverage private investment (Wilson and Silva, 2013). The work on identifying effective approaches for the implementation of the G20/OECD High-level Principles on SME Financing can provide evidence on common and innovative policies to sustain the financing of innovative start-ups and SMEs. Demand-side interventions: The demand side is often overlooked in favour of supply-side actions. Many entrepreneurs and business owners lack financial knowledge, strategic vision, resources and sometimes even the willingness or awareness to successfully attract sources of finance other than traditional debt instruments. Developing human capabilities and social capital is critical to success of early-stage ventures, as well as to enhancing digital financial inclusion, as advocated by the G20 High-level Principles for Digital Financial Inclusion. Initiatives to create a more entrepreneurial culture are also vital as in many countries the fear of failure is higher than perceived opportunities. There has been growth in programmes such as incubators, accelerators, business angel networks and matchmaking services in several countries (Wilson et al., 2013). G20 could share best practices and facilitate connections between these programmes across countries. Addressing regulatory and administrative barriers: Regulatory and administrative barriers to seed and
early-stage investment can affect institutional investors, VC funds, angel investors and high-growth firms. Bankruptcy regulations, labour market restrictions and other framework conditions all play a role. Securities legislations and increasing restrictions on institutions investors, particularly those on banks, pension funds and insurance companies, can also be barriers to investment in seed and early-stage companies (Wilson et al., 2013). Evaluating and assessing the full policy mix: Despite the growth of supply-side interventions, there is little evidence of the impact of these instruments and whether or not they crowd out private investors. Policy interventions should not be seen in isolation but as a set of interacting policies (supply side, demand side and framework conditions). Effective evaluation and periodic adjustment of the specific policy instruments as well as the full policy mix is needed. New platforms for financing innovative business: In recent years, FinTech developments, such as crowdfunding and peer-to-peer lending, have been increasingly used for both debt and equity funding. Related regulatory reforms have aimed to ease the development of this emerging financing channel, while addressing concerns about transparency and protection of investors. In addition to regulatory changes, public action may also take the form of support to industry networks or aim at improving information about funding opportunities (OECD, 2015h). In particular, it is important to encourage investor participation in crowdfunding and innovative firms’ uptake of alternative investment instruments increased which will overall imply new infrastructures to reduce information asymmetries. In this regard, broader developments in FinTech may contribute to enhance risk-assessment in financing markets and reduce the costs of financing new and small innovative businesses.
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KEY ISSUES FOR DIGITAL TRANSFORMATI
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Key Issues for Digital Transformati
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Figures Figure 1. Fixed broadband s
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As the cost of data collection, sto
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Open, voluntary standards, grounded
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Digitalisation is changing the worl
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It is useful to start with a brief
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In the past, there has also been un
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Having established a positive relat
Page 20 and 21: However, despite the rapid spread o
Page 22 and 23: 160 % 140 120 100 80 60 40 20 0 Not
Page 24 and 25: % 100 90 80 70 60 50 40 30 20 10 0
Page 26 and 27: show that large firms have much gre
Page 28 and 29: % 2011-14 2006-09 60 EUIPO USPTO 50
Page 30 and 31: component may include repatriated i
Page 32 and 33: computers will rather increase). At
Page 34: The risk related to cybercrime and
Page 37 and 38: % 100 Gap 1st and 3rd quartiles Ave
Page 39 and 40: Research has shown that the availab
Page 41 and 42: 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Not
Page 43 and 44: Recent research points to a set of
Page 45 and 46: knowledge sharing by upholding the
Page 47 and 48: skilled labour. Thus, trapping reso
Page 49 and 50: wireless access, the two technologi
Page 51 and 52: network infrastructure sometimes ha
Page 53 and 54: separation of infrastructure and se
Page 55 and 56: other network on the Internet (CIDR
Page 57 and 58: Certain policies promote good use o
Page 59 and 60: Francisco Project”, for example,
Page 61 and 62: Encourage the deployment of more fi
Page 63 and 64: In telecommunications, both fixed a
Page 65 and 66: sufficiently compelling for operato
Page 67 and 68: However, data provides additional c
Page 69: deductions on investments in seed a
Page 73 and 74: The development of standards and st
Page 75 and 76: A positive example of co-operation
Page 77 and 78: As actors navigate the IoT space, t
Page 79 and 80: The private-sector-led standards pa
Page 81 and 82: Co-operation among standardisation
Page 83 and 84: Fixed-line communications, wireless
Page 85 and 86: the ICT sector tends to outpace reg
Page 87 and 88: Digitalisation is associated with f
Page 89 and 90: end user (European Commission, 2016
Page 91 and 92: The Internet model of traffic excha
Page 93 and 94: G20 economies could develop strateg
Page 95 and 96: technologies, and in particular the
Page 97 and 98: in the United States where criminal
Page 99 and 100: about digital security risk and how
Page 101 and 102: conduct of cybercrimes and digital
Page 103 and 104: The G8 Deauville Declaration outlin
Page 105 and 106: To ensure that everyone can engage
Page 107 and 108: ICT specialists have been among the
Page 109 and 110: Initiatives to promote consumer edu
Page 111 and 112: All Welding Processing Handling Dis
Page 113 and 114: economies and societies need to per
Page 115 and 116: The development of strategies that
Page 117 and 118: The use of digital technologies is
Page 119 and 120: These adoption gaps between large f
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Figure 44 (Panel B) illustrates a s
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Frontier firms Laggards Frontier fi
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Despite the steady increase busines
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YouTube to watch media content; Ube
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Platforms are often criticised for
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The potential and pitfalls of digit
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Cross-border commerce has long gene
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Digitalisation is changing the worl
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Digital technologies have a huge re
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One approach is to accept the fact
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and income opportunities. Becoming
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South Korea has opened numerous “
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The ongoing digitalisation of our e
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Developing tools for assessing the
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data across borders, transportation
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BCG (2012), ”The Internet Economy
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Deloitte (2015), “Connected Healt
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Karachalios, K. and K. McCabe (2016
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OECD (2016m), “The Internet of Th
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OECD (2012d), Connected Minds: Tech
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The Economist Intelligence Unit (20
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1. Chapter 2 discusses policies for
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KEY ISSUES FOR DIGITAL TRANSFORMATION IN THE G20

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