As the 8th annual OECD Forum in May showed, everyone agrees that innovation is important, but not everyone agrees on the reasons why.

Announcements about enlarging the OECD’s membership and strengthening co-operation with other countries took much of the limelight at this year’s annual ministerial meeting. Below is an extract on enlargement from the Chair’s summary, followed by some selected highlights of the meeting.

“Innovation: Advancing the OECD Agenda for Growth and Equity”: that is the theme of this year’s annual Ministerial Council on 15-16 May, and it reflects what many governments believe are clear priorities. (Chair's conclusions now available!)

Chair’s summary*, OECD Council at Ministerial Level, Paris, 23-24 May 2006:

“Against the backdrop of a broadening global expansion, ministers identified and discussed two sets of key policy challenges. First they underscored how crucial it is to ensure that momentum be sustained where the upswing is already strong, and that those economies that are lagging in the cycle catch up.

“You cannot find a bigger, more complex and all-encompassing subject than that of ‘Balancing globalisation’ ”, said moderator David Eades of BBC World in his opening remarks to the 2006 OECD Forum. There are no simple answers to the challenges it poses either. In a light-hearted observation, Mr Eades suggests a clue might be found in Douglas Adams’ novel, The Hitchhiker’s Guide to the Galaxy, where the indecipherable answer to “Life, the Universe and Everything” was found to be the number 42.

Restoring balance is very much at the heart of this year’s agenda at the OECD Forum on 22-23 May. Economic imbalances; the contribution of financial markets; technology and innovation; managing global challenges such as natural disasters and pandemics; managing the successful integration of China and India into the world economy; creating jobs in the 21st century; and how to ensure effective and ethical trade and investment, are just some of the themes.

“Globalisation, propelled by trade and investment liberalisation, and rapid technological change, has delivered prosperity and reduced poverty for millions of people in recent decades. We have learned, however, that reaping the full benefits of globalisation requires many elements, including good public and corporate governance; policies that promote structural adjustment and social cohesion; greater access to education; efficient financial markets; and sound policies for research, innovation and development. Of course, policies are critical, but implementation is too often undermined by domestic political considerations.

The short-term economic outlook; how to ensure economic stability and improve economic performance; how to implement economic reforms for growth and employment; the follow-up to last December’s WTO ministerial meeting in Hong Kong-China; and the future strategic direction of the OECD; these are the main topics for discussion at this year’s OECD Ministerial Council Meeting (MCM) in Paris on 23-24 May 2006. “Delivering prosperity” will be the overarching theme of the meeting, which is the summit in the OECD calendar. Kostas Karamanlis, prime minister of Greece (see editorial in this edition), will chair the discussions which will be held at the French Ministry of Foreign Affairs, Quai d’Orsay.

Secretary-General Donald J. Johnston (foreground) shares a joke with his successor, former Mexican finance minister, Angel Gurría, at a media briefing by video link on 30 November last. Later this month, on 24 May, at the end of this year’s Ministerial Council Meeting (MCM), Mr Johnston will complete his second 5-year term. Following a news conference at the close of the meeting, he will formally hand over office to Mr Gurría, who was selected by OECD member countries last November.

Fuelling the Future: Security, Stability, Development. This is the theme of the sixth annual OECD Forum, to be held on 2-3 May 2005, at the Centre de Conférences Internationales in Paris.

Mexico joined the OECD in 1994 and this year, on the 10th anniversary of its accession, had the honour of chairing the OECD Ministerial Council Meeting. Ministers from all OECD and some non-OECD countries attended, and there were consultations with representatives from business and industry, trade unions and civil society more broadly, notably at the fifth OECD Forum held on 12-13 May.

Is the world heading on a path of diverging economic destinies? Could these developments undermine global security and stability? How should we respond to such dangers? These were just some of the issues debated by the more than 1,000 people gathered at the fourth edition of the OECD Forum, on the theme “Grow, develop and prosper”, and as ever held in conjunction with the OECD Ministerial Council.

“Agenda for growth and development” was the theme of this year’s annual OECD Ministerial Council. The meeting was chaired by New Zealand’s prime minister, Helen Clark. Here are some key points from the chair’s summary, issued after the meeting.

Laura Bush, First Lady of the United States, was the keynote speaker at OECD Forum 2002 on 14 May. The theme of Forum 2002 was taking care of the fundamentals: security, equity, education and growth. All four are important, Mrs Bush told a packed audience that included many high-level guests, but all four hinge on one: education. The following two short extracts are from the First Lady’s speech, the full version of which can be found at www.oecd.org/forum2002

Politicians are proving unable to change people’s attitudes to energy use, and non-government organisations need to get involved if energy consumption is to become sustainable, Indian Minister of Power Shri Suresh Prabhu said on Tuesday, May 15. India is concerned about a secure energy supply as are the industrial countries, he told a session on sustainable energy at the OECD’s Forum 2001 on Sustainable Development and the New Economy. But, he said, the task before India – where the per capita consumption of electric power of a unit a day is among the lowest in the world – is somewhat more daunting than that facing OECD countries.

The digital revolution will not automatically bring benefits for the environment, said H. Scott Matthews of Carnegie Mellon University. “The jury is still out on the question of net benefits from e-shopping”, he told a round table on sustainable development in the new economy at the OECD’s Forum 2001. In any case so far it accounts for no more than 1% of total US consumption, Mr. Mellon said. He noted that often e-mail order book purchases led to negative environmental effects, with, for example, popular books being individually shipped to customers using high polluting modes of transport instead of more ecologically-friendly modes such as bulk shipment. Often, too, consumers did not travel less because they were e-shopping but rather used online purchasing to free them up for traffic-augmenting expeditions elsewhere.

The image of hungry, sick refugees shipwrecked on the shores of developed nations may be the public’s impression of migration, but it represents just a sliver of a deeply complex and worsening problem that has far-reaching economic, social, and environmental implications for the entire planet.

Organic farming is not always the best option to boost agricultural production in developing countries, Madagascar’s Jean-Robert Estimé said. Estimé, the director of LDI, a programme designed to help farmers increase their production while sustaining natural resources, was speaking at a round table on agriculture and sustainable development at the OECD’s Forum 2001 on Tuesday May 15. “In Madagascar, we have many rural, small farmers who have never used chemicals and some utilisation of chemicals may be necessary for development,” said Estimé. “Trade liberalisation and market reform is not enough. Farmers must have access to packages including technical assistance, credit and inputs.”

Not only are fossil fuels still the world’s most important energy source, but our dependence on them continues to increase. By 2020, the date set in the latest energy outlook updates, fossil fuels will constitute 90% of world energy. This was the gloomy reality presented by moderator Kenneth Lay at a roundtable discussion on fueling sustainable development at the OECD’s Forum 2001 on Tuesday, May 15. “CO2 emissions for the next 20 years will have increased by 2% a year … and will reach a level of 60%, or 13.7 billion tonnes a year. This is a higher rate than in the past, and is hardly moving us closer to sustainable energy”, Kenneth Lay pointed out in his introduction, reminding us that hydropower and renewable energies together represent only 4.8% of the world energy market.

In a conversation with some 50 delegates at the OECD’s Forum 2001 on Monday 14th May, David Ignatius, executive editor of the International Herald Tribune, praised the OECD’s efforts in fighting corruption, while criticising his own country for avoiding the issue of tax evasion.

OECD governments should do far more to “green” their public procurement practices and support sustainable development by example. This was one of the key calls made during a sustainable development round table at Tuesday’s OECD Forum 2001. The call was made by John Hontelez, secretary general of the European Environmental Bureau (EEB), who welcomed the OECD’s new environmental strategy, but found some areas such as procurement wanting. Sustainable development was seen too much by OECD as being in parallel to growth and trade liberalisation, rather than as an overarching theme, Mr. Hontelez said. He challenged the OECD to an ambitious target: To stop the growth in kilometre freight transport by 2010.

The problem of the digital divide is very real, but the Internet can also help repair social damage and bridge the gap between rich and poor, France Telecom chief executive Michel Bon said on Tuesday, May 15. Online, human interaction takes place in an anonymous, image-less environment free of the socio-economic labelling that frequently occurs with face to face contact, Mr. Bon told a session on digital opportunities and the digital divide at the OECD’s Forum 2001. That is why his company has launched an initiative to bring free and lower-cost Internet access to lower-income areas in France.

As Chairman of Koc Holding Company, Rahmi Koc knows the bottom line, and his voicing of a standard business fact was the anchor to which all parties involved in Tuesday’s discussion agreed. “The goal of business is, as it always was-making money.” As a philanthropist however, he has pursued quite a different personal agenda, and he stands firm in support of broad corporate responsibility that includes attention to workers, the environment, honesty and fair conduct, and transparency. He remains clear though, that “The right government mechanisms must be put into place, but the companies themselves must be allowed to decide their specific approaches privately, in a more pro-active approach.”

Trade and poverty reduction go hand in hand but if further trade liberalisation is to be achieved countries will need to address also the whole question of global governance, former IMF managing director Michel Camdessus said on Tuesday, May 15. If the world’s trading nations are to be any more successful in global talks in Dohar in November than they were in Seattle in 1999, when they failed to agree on new negotiations, they will have to take this into account, Mr. Camdessus told the OECD’s Forum 2001 on Sustainable Development and the New Economy.

Exploitation of the natural environment is growing at an unsustainable rate ultimately risking human survival itself. That was the uncomfortable message Professor E. O. Wilson, biologist and entomologist at Harvard University, brought to the opening day of the OECD’s Forum 2001 on Sustainable Development and the New Economy.

The transport world is clearly not on the road to sustainable development, officials told a round table discussion at the OECD’s Forum 2001 on Monday, May 14. Participants generally agreed that there was a wide gap between the desire for improved air quality, congestion and safety and the ability or willingness of government, business and the public to deliver.

Capitalism in the 21st century should take account of people and nature as well as the more traditional elements of money and goods, Rocky Mountain Institute’s Amory Lovins said on Monday, May 14.

Energy and new technology dominated this very lively discussion on risk management for sustainable development.

International business and economic leaders tried to get their heads around a difficult puzzle on Monday: how to develop a knowledge-based economy in a world of glaring inequalities and self-interest.

The health of poor nations is every nation’s problem, even the richest. But money alone is no panacea. This was the main message of a panel discussion on healthcare at OECD’s Forum 2001 on Sustainable Development and the New Economy.

High hopes of reducing environmental degradation raised at the Rio summit of 1992 have not been borne out, Svend Auken, Minister of Environment and Energy for Denmark, said on Monday May 14. “The record doesn’t quite match the good intentions. It’s dismal, in fact. Environmental degradation has continued ” since the global summit in Rio in 1992, Auken told a session at the OECD’s Forum 2001 on Sustainable Development and the New Economy. Speaking from the audience, a delegate from the World Wildlife Fund (WWF) reminded the gathering of business, government, labour and civil society representatives that over the past 20 years total pollution in the industrialised countries, including Japan, Germany and the US, has increased by 28%.

Svend Auken, the Danish Minister for the Environment and Energy, has called for a global deal between North and South on sustainable development. OECD countries should take the lead, he said, in the overall objective of “decoupling environmental degradation from economic growth … within, say, ten years from now.”