Seizing the productive potential of digital change in Estonia

Damien Azzopardi, Patrick Lenain, Margit Molnar, Natia Mosiashvili and Jon Pareliussen

No 1639, OECD Economics Department Working Papers from OECD Publishing

Abstract: Technologies such as cloud computing, software to automate supplier- and customer relations, online platforms and artificial intelligence seem to offer a vast potential to boost productivity and living standards. However, aggregate productivity growth has declined sharply across the OECD over the past decades. Estonia is no exception, though it is well placed to gain from digital technology diffusion, with strong digital foundations, including advanced and secure physical and digital infrastructure and world-leading e-government services. Turning this potential into a productivity boost necessitates speeding up digital take-up also outside of the ICT sector and fostering the complementarities between digital technologies, skills and policies. Skills are high in general, and the supply of ICT specialists is picking up. There is still potential to improve digital user skills, and notably to put skills to better use by improving management skills and practices. Business-friendly regulations in general and pioneering attempts in some areas will likely spur the adoption of digital technologies. However, insolvencies are too slow and costly, command-and-control regulations relatively frequent and public ownership in network industries is high. Strengthening collaboration between industry associations, labour unions and industry clusters within technology investments, internationalisation, skill supply and management practices could help the country better realise complementarities between technologies, skills and policies, and thereby tap deeper into the productivity potential offered by digital technologies.

Keywords: automation; Digitalisation; productivity; skills (search for similar items in EconPapers)
JEL-codes: D24 D47 E22 J24 O33 O38 (search for similar items in EconPapers)
Date: 2020-12-16
New Economics Papers: this item is included in nep-cis, nep-eff, nep-ict, nep-lma, nep-mac and nep-tra
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