5 Key Learnings from the OECD 2022 Ministerial Council Meeting

This piece was authored by Marine Marty, Thought Leadership Research Specialist.

Ministers of the OECD member countries meet in Paris every year for a discussion on key policy issues. The theme this year was "The Future We Want: Better Policies for the Next Generation and a Sustainable Transition.” As a first, the ministers invited two young people - two members of the OECD Youth Advisory Board - to speak on the need for policies that will ensure a sustainable transition.

5 Learnings from the OECD ministerial meeting

“Shaping a better and more sustainable future for the next generation requires early investment in people’s lives through well-designed policies. We are committed to take action to improve education at all levels, from early childhood to higher education as well as the well-being of children and young people.” (10:2022 MINISTERIAL COUNCIL STATEMENT).

1. The war has a price.

The war in Ukraine has added a new shock to world economies as they attempt to recover from the pandemic.

The OECD released its 2022 Economic Outlook and the report is clear: the war is slowing the recovery, especially in Europe. As the war has added a burden to the recovery, a study by the Adecco Group titled "Closing the gap: Pathways to a post-pandemic recovery in labour markets" reveals it could take up to two more years for Europe to close the pre-covid employment gap.

The inflationary pressure is intensifying. Due to the war in Ukraine, supply chain disruptions and energy price hikes have amplified inflationary pressures, which affect particularly low-income earners, as they are the ones spending the highest share of their income on food and energy.

No wonder this issue is of highest concern to policymakers.

Moreover, serious food crises are highly likely in low-income countries if action is not taken to address the rise in commodity prices. Food and energy may not be readily available or available at affordable rates in some of these countries, causing famine and social unrest. Important to note, however, is that the problem is not a lack of food, but getting the food where it's needed.

2. An accelerated energy transition will increase energy security.

For policymakers, the best way to avoid inflation is to reduce the dependence on fossil fuels. Relying more on low-emission energies means diversifying the source of energies, which ultimately brings more stability. But how can we achieve that?

Investing in the skills of the future.

Relying on low-emission sources is the way to go, but to successfully shift to green energies, we need to invest in the skills of the future; the skills that will be needed to enable the green transition. The Adecco Group’s “Skills for the green economy” highlights that in the move towards a circular economy, the global economy could lose 71 million jobs without proper skills development.

In contrast, smart policies and investments in reskilling could reverse this trend, resulting in the creation of 18 million new jobs in the energy sector alone.

Smart policies that focus on the development of skills are crucial to realising this change. We can only lead the way toward a greener future if we embrace truly sustainable workforce solutions. Investing in and developing skills is not merely a result of the Green Transition, but rather it is the foundation of the transformation itself.

3. Young people are 1/3 of the world’s population, but 100% of the future.

For the first time, policymakers have recognised the need to include the youth in the policy-making process. OECD ministers have adopted the “Recommendation of the Council on Creating Better Opportunities for Young people.”

There is still much to be done. Young people must be recognized as key stakeholders when developing new policies, and all public policy should be subjected to a 'future generations test.’ That means that any new policy today should be weighted on the impact and consequences it will have tomorrow.

By applying this generational perspective in policymaking, we ensure that the pursuit of welfare by the current generation will not diminish the opportunities for a good and decent life for succeeding generations.

4. The burden of the shocks must be shared.

Even though our economies and societies must face tremendous shocks (war, inflation, shortages, climate change), it is vital that the burden of these shocks is shared, not only among all stakeholders, but also among generations and between high/low-income countries.

Consumers, businesses and governments must all take their fair share.

While consumers must face the price increases, they cannot bear the costs of inflation alone; government and companies have to accept their share. For the former, it means helping the population, especially the most vulnerable ones,by implementing more redistributive policies, and for the latter, it implies reducing some margins.

When it comes to facing one of the most urgent challenge of our time - climate change - all generations must work hand in hand. To ensure an intergenerational justice, contemporary generations need not only to respect their obligations towards past and future generations, but also to share the burden of the actions that need to be taken today. Concretely for older generations, this would mean adopting new/ more climate-friendly behaviors, whereas for younger generations it would imply adopting a mindset of Lifelong learning, agility and resilience.

5. We have gone from a labour market to a skills market.

Due to the rapid advancement of technology, and the consequent improvements in digitalization and automation, we have gone from a market that requires labour to a market that desperately needs skilled individuals. In other words, skills and knowledge have become the new currency.

Yet, considering how quickly a skillset becomes obsolete, it is imperative that individuals engage in continuous re- and upskilling to stay current and relevant. People need to take responsibility for their employability.

Since skills need to rapidly evolve and so do the needs of the companies people may switch jobs/industries more often, yet policymakers warn that a balance must be found between long-term & short-term contracts, underlying that we need “longer short-contract, and shorter long-contract”.

But governments must strive to protect people, not jobs. And that’s possible by enabling an equal access to re- and upskilling and to career guidance to all individuals, as all actors will be needed to make the future work for everyone.