New approaches to bring all on board!

Can 2012 finally mark a new departure for our economies? Can the year bring better prospects for our people? Can we embark on a new era of stronger, greener and more inclusive growth? This is surely the hope of many, and it is also the goal of policymakers as they gather for the OECD Ministerial Council Meeting in May with the theme “All on board–Polices for Inclusive Growth and Jobs”, followed in June by the G20 Leaders’ Summit in Los Cabos, Mexico, and by the Rio+20 UN Conference on Sustainable Development.  

We are still dealing with the fallout from the global crisis. The recovery that started in 2010 did not have the necessary impetus to put the world economy back on a solid growth path. It did not bring jobs back for the many unemployed. The rebuilding of confidence in markets, governments and institutions is still pending.

It is urgent to act now to break away from this negative spiral! It is time to turn this “new normal” into a “different normal”. But how can we lay the foundations for stronger, cleaner and fairer economies? How can we turn this painful crisis into a new era of broad, inclusive and sustained prosperity?

Since the onset of the crisis, we have scrutinised its causes, trying to focus not only on what went wrong, but also on what could be done to help countries face the emergency and jump start a jobs-rich recovery. We put together a Strategic Response to the Crisis and have since launched a number of sectoral strategies: on green growth, innovation, jobs, skills and development. We have pioneered work on youth, gender, income inequality and migration.

But this is not enough! The world economy is going through a paradigm shift and, thus, we need to identify which of our previous ideas, frameworks and tools still hold and which need to change. And we want to bring together these two efforts–the proactive strategy to continue to help countries develop new sources of growth and the renewal of our economic thinking–under an initiative called “New Approaches to Economic Challenges”. What is it about?

OECD member and partner countries are confronted with a hesitant recovery, high unemployment, growing inequality (“go social”) and unsustainable public finances.

At the same time, new sources of growth and competitiveness need to be identified, including innovation, green growth and skills (“go structural” and “go green”) to put our economies back on a strong, more inclusive growth path. Updating and upgrading the regulatory and implementation capacities of governments at all levels; their understanding of how markets function and how to deal with the multiple downside risks, will be a key part of the exercise. Restoring household and business confidence in markets, governments and institutions (“go institutional”), addressing long-term challenges related to ageing, resource scarcity, climate change and global development, also have to be added to the “to-do” list.

The political aim of the initiative is to contribute to better policies for better lives, to focus not only on “what to do”, but also on “how to do it”. We believe a new multidimensional gauge of progress is now required: one that will incorporate well-being, equity, inclusiveness and the environment. We have to build on successful cases, such as the OECD’s Better Life Initiative, but also to go beyond and develop an analytical framework and the tools needed to assess the trade-offs between different wellbeing goals and identify the most effective paths towards inclusive growth.

We need to improve our understanding of the mutually reinforcing aspects of economic and environmental policies, as well as the opportunities they offer and the pitfalls to be avoided. As knowledge grows in importance, we must work to incorporate the likes of software, design, organisation and other “intangible” assets into our economic models. Our “new approaches” must also cover other well-being factors, such as equality, investing in people and providing them with the right opportunities by fostering their skills and education.

This is an ambitious agenda which can only happen if people and institutions work together. For that, our governance systems must adapt and improve in areas such as corporate and public sector accountability, fighting corruption and strengthening democratic participation.

Institutions such as the OECD must respond to people’s needs. In our OECD Week next 22-24 May, which brings together senior policymakers and stakeholders to both our OECD Forum and to our Ministerial Council Meeting, we intend to discuss policies to generate growth, competitiveness and jobs combined with inclusion, integrity and well-being.

©OECD Observer No 290-291, Q1-Q2 2012

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

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