The upswing in the global economic outlook creates opportunities to ensure that growth is beneficial to all. Indeed, despite recent progress in some countries, more efforts are needed to transform economic growth into improved living standards for all. There is scope to strengthen business dynamism and align wage growth with productivity growth. There is also a clear economic imperative to tackle increased inequalities in income and opportunities in many OECD and partner countries. Indeed, bringing together an agenda for higher productivity with policies for inclusivity will enhance outcomes that matter for people. Moreover, inaction comes with risks. Inequalities are undermining people’s confidence in open trade and markets, and could further weigh on long-term growth and macroeconomic stability.
Globalisation, digitalisation, demographics and climate change are transforming the way economies work, providing new opportunities for growth, but also raising the risk of deeper inequalities if the gains from growth are not evenly shared among people, firms and regions. The focus on stronger productivity growth is necessary, but not sufficient to sustain economic growth over the long-term unless equity issues are also addressed and embedded in the design of policy. The opportunities for growth at a global level could be better leveraged through domestic and international policies that can promote broad-based growth that is beneficial to all. There are trade-offs between some of these policies, but there are also standards and policies that can create win-win situations, such as investing in skills of children from low-income families, reskilling and upskilling displaced workers or promoting diffusion of technologies and innovation across all firms. The main message of the OECD Inclusive Growth Initiative is to put the emphasis on the policies that can improve the perspectives of the bottom 40% of the income distribution.
At the 2017 Ministerial Council Meeting, the OECD Secretariat was asked to develop a policy action plan for inclusive growth and to document inequalities of income and opportunities through a comprehensive evidence-based analysis [C/MIN(2017)9/FINAL]. The Framework for Policy Action on Inclusive Growth aims to help governments to sustain and ensure a more equitable distribution of the benefits from economic growth, which is supported by a dashboard of indicators. It consolidates OECD key policy recommendations around three broad principles:
Invest in people and places that have been left behind through (i) targeted quality childcare, early education and life-long acquisition of skills; (ii) effective access to quality healthcare, justice, housing, infrastructures; and (iii) optimal natural resource management for sustainable growth.
Support business dynamism and inclusive labour markets through (i) broad-based innovation and technology diffusion; (ii) strong competition and vibrant entrepreneurship; (ii) access to good quality jobs, especially for women and under-represented groups; and (iv) enhanced resilience and adaptation to the future of work.
Build efficient and responsive governments through (i) aligned policy packages across the whole of government; (ii) integration of distributional aspects upfront in the design of policy; and (iii) assessing policies for their impact on inclusiveness and growth.