DIGITIZATION OF THE ECONOMY – LAURENCE BOON
Despite a vaccine, the global economy will only slowly recover, Indicate new forecasts by the OECD. In an interview, chief economist Laurence Boone explained what the government should do today. It appears from their prediction presented on Tuesday. The organization also predicts such a decline for Germany. Then, as the vaccine will become more readily available over the next year, a gradual recovery will come. However, unemployment in Germany is very likely to continue to rise in 2021 prior to reaching, and it will be the highest in the first half of the year.
Miss Boone, there will soon be a vaccine against Covid-19. How long will it take for the market to bounce back?
Naturally, vaccines give us hope, but we are still in the middle of a crisis. Vaccines have to be produced and distributed first. It will take some time. That’s the reason we definitely need to live with additional limitations for now. Economies in OECD countries will recover – but not overnight, but slowly.
You estimate the growth of 4.2% for OECD countries in the coming year – but you emphasize that this prediction is associated with higher uncertainty. Where do you see the greatest risk?
Of course, it’s also possible that a vaccine will become available to a large proportion of the population sooner than anticipated. Then the economy can also recover faster than we previously assumed. But we have learned to be careful in recent months. Especially because the supply of vaccines can drag on, the mood of the corporation could also get worse. That would then cause the economy to grow more slowly than anticipated. The question that remains is how we can bridge the gap before the economy picks up again.
We are making conscious recommendations to support businesses and employees from the lockdown, as Germany is currently doing, especially since we saw following the first corona wave in spring that the economy is bouncing back up quickly as soon as the restrictions can be lifted.
Developments about the coronavirus pandemic directly in your telephone, we recommend our app, which you can download here for Apple and Android devices.] proven to be a good instrument for job retention. This allows people to return to normal sooner after the crisis is over. What should the government do now to prepare the economy for the post-Corona age? You want to make important investments today – both short and long term. In the short term, by way of example, schools need to be equipped with notebooks and tablets so that we can stop some students from falling behind. In the long term, the government must digitize the whole economy. This is a huge project that you should plan now to implement in the long run.
In Japan, as an example, the government provides subsidies to small and medium enterprises to acquire new technologies and supports them in educating their workers so that they can utilize the new technology.
While the market in industrialized countries is collapsing, it has grown back in China. How will that impact the global economy?
China is guaranteed to contribute more to global economic growth next year than ever before. The reason is, the country hasn’t experienced a second corona wave. But not everything is ideal in China. The problems there are exactly the same as before the pandemic: the People’s Republic no longer wants to be the world’s workbench. He would like to grow into a service society. The state also wants to encourage private consumption instead of relying on state corporate investment, as has occurred up to now. However, it takes time.
Miss boon was asked, can the industrialized nations catch up to China again after the pandemic, or will the People’s Republic maintain this supremacy?
Her answer was quite up-to-date. She said that it depends on if industrialized countries use the crisis to induce digitalization progress. If today’s businesses and employees are fit for the Seen in this cay, the catastrophe is obviously an opportunity for modernization.
What Miss Boon has elaborated is quite close to what we actually need to do. A number of policymakers share the same idea that digitization can catalyze remarkable economic, social, and political developments. The little digitalization that has taken place so far, there is enough evidence already: Water utilities have installed sensors which help in the reduction of leakage, saving money and water; healthcare organizations send text messages to pregnant women with information on prenatal care, making a healthier new generation even before it’s born; fleets of delivery trucks use GPS devices to find shorter routes, cutting back on their greenhouse gas emissions. The impact has not been quantified, and nobody really knows how much we need to press upon the matter or how its impact compares to that of other factors. We expect this analysis can help establish the high leverage which can accrue from investment in digitization and go beyond meek broadband access.
The great constitutional historian Philip Bobitt had argued in his book The Shield of Achilles: War, Peace and the Course of History that the world was going to encounter a change in the usual view of the purpose of government, from the 20th-century nation-state, the idea of which to maintain its legitimacy and guarantee the welfare of the people of the nation, to the 21st-century „market state,“ the focus of which is the create better opportunities for the citizens.
The embrace of digitization is, perhaps, an example of that shift. Indeed, nowhere are the advantages of the market state more evident than in ICT. National authorities have learned that there are limits to their function as welfare guarantors. They can’t protect their citizens indefinitely against the vicissitudes of the international economy. But by advancing the reason for digitization, they can become market makers, building their own capacities — and those of their citizens and businesses — to raise the level of opportunity for their entire population so that even when we are bound in our homes because of a pandemic, the economy will keep flowing and everyday life will not be affected.