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Austria’s transition to a digital economy and society is slower than in other high-income small open European economies. The rate and pace of utilisation of eight main ICT applications shows that Austrian firms follow peer country counterparts with a gap, which has widened in most areas in recent years. Two dynamics drive digital transitions and Austria has room for progress in both of them. First, the potential for digitalisation in all firms, and especially in the smaller ones (where gaps are largest) should be freed-up by upgrading the full range of ICT-generic, ICT-specific and ICT-complementary skills. Second, Austria needs to make its business environment more conducive to firm entry and exit. The rate of entry of new firms and their growth are crucial for the diffusion of new business models and ICT innovations but fall behind peer countries. The adoption of ICT innovations by households also follows a staggered path: young and highly educated Austrians adopt ICT applications in similar ways to their counterparts in peer countries, while middle and older age cohorts display noticeable gaps. This calls for policies to help lagging groups become more acquainted with innovations. A whole-of-government approach, including large-scale utilisation of e-government applications in enterprises and households, should help to embrace change and facilitate the flourishing of innovative businesses, work practices and lifestyles throughout Austria.
This Working Paper relates to the 2017 OECD Economic Survey of Austria (www.oecd.org/eco/surveys/economic-survey-austria.htm)

The aim of this paper is to inform the ongoing debate on the policies being used to encourage international technology transfer (ITT) and, of these, which have the potential to distort trade or investment and which may effectively promote ITT. The paper develops a first-cut approach to cataloguing ITT-related measures across countries. Following the literature, technology transfer-related policies are grouped into six categories: 1) absorptive capacity policies; 2) measures related to intellectual property rights (IPR); 3) FDI promotion measures; 4) FDI restrictions and FDI screening; 5) performance requirements; and 6) investment incentives. A list of regulatory questions about measures in place is devised for the four categories 3 through 6 on which information is currently particularly scarce. Summary results are presented for twenty four developing and developed countries which are important actors in global FDI, technology and product markets. The findings of the literature addressing both the impact of these measures on technology transfer and on market competition are summarised for each of the four policy categories. The paper also explores the extent to which various ITT measures are covered by existing international agreements, with a view to helping inform future approaches. The concluding section elaborates on policy implications.

Digitalisation is one of the megatrends affecting societies and labour markets, alongside demographic change and globalisation. The fourth industrial revolution will redesign production processes and alter the relationships between work and leisure, capital and labour, the rich and the poor, the skilled and the unskilled. The degree of disruption induced by the technological transformation ahead largely depends on the policy framework. Digitalisation can lead to anything between soaring inequalities and widespread improvements of living and working conditions. Two main questions arise for policy makers: how to ensure equality of opportunities in the race with technology and how to find the appropriate level of redistribution of the gains associated with digitalisation to preserve social cohesion. Against this backdrop, this working paper will analyse the technology-induced transformation of labour markets, argue for a new social contract and discuss how the provision and use of skills need to adapt to the digital work environment.
This working paper relates to the 2017 OECD Economic Survey of Austria (www.oecd.org/eco/surveys/economic-survey-austria.htm).

Entre 2012 et 2022, les compétences en littératie des individus en âge de travailler dans les pays participant à l’Évaluation des compétences des adultes (PIAAC) devraient s’améliorer, principalement en raison du faible niveau relatif des compétences des cohortes qui atteindront 65 ans d’ici 2022 et du niveau de compétences en littératie beaucoup plus élevé parmi le groupe d’âge entrant. Les pays participants récoltent les lointains bénéfices des efforts qu’ils ont réalisés en matière d’éducation depuis les années 1970. Ce que ces données montrent, c’est qu’une scolarité de grande qualité ne suffira pas à elle seule à améliorer la qualité de la main-d’oeuvre aussi rapidement qu’augmentent les besoins en compétences. Les gouvernements doivent donc redoubler d’efforts pour faire de l’apprentissage tout au long de la vie une réalité pour tous.

Forecasts of GDP growth are typically over-optimistic for horizons beyond the current year, particularly because they fail to predict the occurrence or severity of future downturns. Macroeconomic forecasters have also long been under pressure to convey the uncertainty surrounding their forecasts, particularly since the financial crisis. The current paper proposes a method to address both these issues simultaneously by constructing fan charts which are parameterised on the basis of the historical forecasting track record, but distinguish between a "safe" regime and a "downturn-risk" regime. To identify the two regimes, use is made of recent OECD work on early warning indicators of a prospective downturn, relating to housing market or credit developments. Thus, when an early warning indicator is “flashing", the associated fan chart is not only wider to reflect increased uncertainty, but is also skewed to reflect greater downside risks using a two-piece normal distribution of the form used by central banks to provide fan charts around inflation forecasts. Conversely, in a safe regime, when the early warning indicators are not flashing, as well as being symmetric, the fan chart is narrower both relative to the downturn-risk regime and relative to what the fan chart would be if the dispersion was calculated with respect to the entire forecast track record with no distinction between regimes. The method is illustrated by reference to OECD GDP forecasts for the major seven economies made just prior to the global financial crisis, with fan charts calibrated using the track record of forecasts published in the OECD Economic Outlook. Fan charts which take account of early warning indicators in this way are much better at encapsulating the outturns associated with a downturn than a symmetrical fan chart calibrated indiscriminately on all forecast errors.

Between 2012 and 2022, the literacy proficiency of the working-age population in the countries that took part in the Survey of Adult Skills is set to improve, mainly driven by the relatively low proficiency of the cohorts who will reach 65 between now and 2022 and the much higher literacy skills among the incoming age group. The participating countries are thus reaping the distant rewards of their investment in education since the 1970s. What these data show is that high quality schooling alone will not be enough to raise the quality of the workforce nearly as quickly as skills requirements are rising. Governments therefore need to redouble their efforts to make lifelong and lifewide learning a reality for all.

Knowledge transfer between industry and science is fundamental to innovation. There are important differences across scientific disciplines and sectors of activity in that, for instance, the financial and pharmaceutical sectors have different demands for science inputs. This paper reviews the data sources and associated methodologies available to measure different types of science-industry interaction. It applies these insights to re-assess the contributions of social sciences to industry and the disciplinary needs of the ICT sector. The paper finds that commonly used methodologies fail to shed light on a number of important industry-science interaction channels, and introduce biases in assessing connections. Using new evidence from labour force and university graduate surveys can help to some extent. The paper shows how these additional data allow to better capture the contributions of social scientists and the complexity of disciplinary demands of the digital economy. However, new data sources and methods should be further explored.

This document describes the OECD’s new Structural Policy Indicators Database for Economic Research (SPIDER). The database compiles data from various existing databases. It contains indicators capturing structural policies (including institutions, framework condition policies and policies specifically related to labour markets and drivers of productivity and investment such as trade, skills and innovation). It also contains some basic macroeconomic indicators. The main idea of the database is to provide all the data needed for empirical analysis on structural policies in one place to facilitate empirical investigations. The indicators collected comprise three types of data: data with long-time series covering OECD countries, data covering a larger set of countries for a varying number of years, and finally a set of time-invariant indicators. The paper illustrates the use of the database on the basis of different growth regressions employed in the literature.

This paper argues that, in situations where choices are made between mutually exclusive investment projects and where there are economic rents, free allocation of tradable emission permits in emissions trading systems can weaken incentives for firms to invest in less carbon-intensive technologies compared to the case where permits would be auctioned. The reason is that permit allocation rules affect economic rents differentially when different product benchmarks apply to products that are close substitutes. Examples of permit allocation rules favouring more emission-intensive technologies for outputs that are close substitutes are found in the California Cap and Trade Program and in the European Union Emissions Trading System. This lack of technology-neutrality is exacerbated in the long run as future patterns of substitutability between technologies are uncertain. Free permit allocation can broaden support for carbon pricing, but this paper shows that this carries a cost in terms of environmental effectiveness if it discourages investment in low-carbon assets.

Contracts are a key tool for vertical co-ordination, enabling dialogue and capacity building across levels of government. They are frequently used for regional development policy in OECD and non-OECD countries. Drawing on contract theory and a variety of national experiences, this paper identifies three main types of contracts between central and subnational governments according to their objectives: i) empowerment; ii) delegation; and iii) policy-sharing contracts. The differentiation of contracts depending on their objective is based on two key factors: the maturity of decentralisation and the capacity of national and subnational governments. It is expected that with the development of subnational /central government capacities (or both), and with the increasing maturity of decentralisation, contracts can shift from one type to another. The paper concludes by suggesting enforcement mechanisms for more effective contracts across levels of government.

The Innovative Teaching for Effective Learning (ITEL) Teacher Knowledge Survey is the first international study to explore the nature, function and development of teachers’ pedagogical knowledge, i.e. what teachers know about teaching and learning. In-service and pre-service teachers exhibited higher knowledge on the classroom management portion of the assessment than in other areas related to instructional process, such as teaching methods and lesson planning. Results suggest that the more teachers learn about classroom management, the more confident they feel about mastering the teaching and learning process in general. Classroom management also seems to have a larger impact on self-efficacy than does learning about lesson planning. In-service teachers who report feeling confident about managing classrooms also report higher quality instructional practices in this domain. Knowledge related to learning and development; incorporating aspects of cognitive learning strategies, memory and information processes, is the area with most room for improvement in the pedagogical knowledge base.

A key policy concern in recent years has been the decline in levels of trust by citizen in public institutions. Trust is one of the foundations upon which the legitimacy and sustainability of political systems are built. It is crucial to the implementation of a wide range of policies and influences people’s behavioural responses to such policies. However, despite its acknowledged importance, trust in public institutions is poorly understood and is not consistently measured across OECD countries. The OECD Trust Database brings together information from a wide range of different household surveys containing measures of trust and combines this with information on other social and economic outcomes. The size of the database and range of covariates make it possible to identify the underlying patterns captured by survey based measures of trust in institutions and systematically test the accuracy (i.e. reliability and validity) of these measures. Reliability is tested by examining the consistency of measures of institutional trust across different surveys and between different waves of the same survey. Validity is harder to test than reliability. It is however possible to examine the construct validity of institutional trust measures by looking at whether these measures show the expected correlation with other social and economic variables on a cross-country basis. Analysis of item-specific non-response rates provides important additional information on the face validity of institutional trust measures.

Trust is a key component in peer platform markets (PPMs). In 2016, the OECD’s Committee on Consumer Policy (CCP) produced a report on Protecting consumers in peer platform markets: Exploring the issues. The 2016 report examined a number of the mechanisms that peer platforms have themselves developed to help engender trust in and use of their services (e.g. initiatives such as ratings and reviews) and raised a set of questions for further research and reflection. In order to understand better the role and drivers of consumer trust in PPMs, the CCP conducted an online survey of 10 000 consumers across ten OECD member countries. This report discusses the findings of that survey.

This paper explores the link between the design of insolvency regimes across countries and laggard firms’ multi-factor productivity (MFP) growth, using new OECD indicators of the design of insolvency regimes. Firm-level analysis shows that reforms to insolvency regimes that lower barriers to corporate restructuring are associated with higher MFP growth of laggard firms. These results are consistent with the idea that insolvency regimes that do not unduly inhibit corporate restructuring can incentivise experimentation and provide scope to reconfigure production and organisational structures in order to faciliate technological adoption. The results also highlight policy complementarities, with insolvency regimes that reduce the cost of entrepreneurial failure potentially enhancing the MFP gains from lowering administrative entry barriers in product markets. Finally, we find that reducing debt bias in corporate tax systems and well-developed venture capital markets are associated higher laggard firm MFP growth, suggesting that equity financing can also be an important driver of technological diffusion. These findings carry strong policy implications, in light of the fact that there is much scope to reform insolvency regimes in many OECD countries and given evidence that stalling technological diffusion has contributed to the aggregate productivity slowdown.

The United Kingdom is preparing a modern industrial strategy to boost labour productivity across the whole country and to narrow regional gaps in living standards. This raises the question of the optimal allocation of scarce resources in meeting these targets. This study identifies industrial strengths of each region and scope to boost regional productivity through the channel of higher capital intensity. Overall regional investment ratios appear weakly linked to regional productivity, but the sectoral composition of regions and their type of investment are more important determinants. Each region has productivity leaders, but the concentration of such firms is the highest in the south of England. Differences in the representation of the most productive firms in regions are strongly related to differences in regional productivity. The empirical methodology quantifies the productivity effects of raising the capital intensity in each sector-region, focusing on viable firms falling behind the national productivity frontier in all but the finance and insurance sectors over 1995-2014. To enhance labour productivity of lagging regions, the industrial strategy should promote the catch up of firms with the national best performers in services sectors, in particular knowledge intensive services such as ICT and business services, but also wholesale and retail trade. This finding is consistent with the UK’s leading global position in high value-added services sectors. The type of investment matters: boosting research and development in the manufacturing sector in some lagging regions would also be effective in stimulating productivity. Manufacturing investment cannot be a substitute to investment in services given the small size of the manufacturing sector and its high exposure to competition from rapidly emerging global hubs. However, this study does not quantify the effects of skills, the benefits of greater industrial diversification and the positive impact that larger cities would have on agglomeration effects.

This note describes a procedure to match companies and individuals listed in Crunchbase, a new database on innovative start-ups and companies, with patent applicants and inventors reported in PATSTAT, the worldwide intellectual property database maintained by the European Patent Office. Given that neither administrative nor other unique identifiers are available in either of the two databases, the matching is based on a “fuzzy” procedure that exploits the available overlapping information across the two databases. A general overview of the resulting database completes the note.

Conventional studies on the impacts of economic shocks using global input-output tables (sensitivity analyses) assume stable production structures and thus, only reveal the marginal impacts of changes in final demand. However, when economic shocks occur, whether at home or abroad, economic agents are expected to react to reduce the negative impact or amplify the positive effects. The ability of a country to contain economic losses can be defined as the resilience to economic shocks. Using the OECD's annual Inter-Country Input-Output (ICIO) tables, 1995 to 2011, this paper investigates the relationship between changes in final demand and production structures for 61 economies. Our findings are summarised as follows. Production and final demand structures tend to change to reduce the negative feedbacks from final demand shocks. During economic downturns, structures tend to change so that the dependence on domestic services increases, while the dependence on domestic demand for goods, and the dependence on foreign demand for domestic goods and services, both decrease. Therefore, the domestic service sector seems to play a key role in temporarily containing the negative feedback. Countries that are able to prop up their economy by domestic service sectors instead of domestic goods and foreign sectors are more resilient to negative economic shocks.

Discussions relating to the 2018 Facilitative Dialogue (FD2018), mandated under the Paris Agreement, are on-going. These discussions are on the scope, inputs, and modalities of the FD2018 as well as any outputs or outcomes from the FD2018. While the mandate of the FD2018 does not explicitly call for outputs or outcomes, identifying outcomes and outputs ex ante could be useful in focusing discussions and inputs to the facilitative dialogue, as well as in shaping its modalities. The objective of this paper is to highlight the implications of agreeing and identifying specific outputs and outcomes ex ante, and exploring what type of outputs and outcomes would best serve the interests of the FD2018. This document also identifies key questions that could guide decision-making on what modalities would be appropriate for the FD2018; however, identification of options for specific modalities of FD2018 are out of the scope of this paper.

This note describes a new database on innovative start-ups and companies, called Crunchbase, with a focus on its potential for economic and managerial research. Crunchbase is rapidly being discovered by scholars from different fields. It has notably already informed studies on specific sectors as well as studies of networks in the start-up ecosystem. This note first describes the contents of Crunchbase and then reviews academic research that has used it. We further suggest that many more valuable avenues for economic and managerial research can be opened through the combination of Crunchbase with selected supplementary data sources and provide two such examples.