education in the digital world opening speech by ignazio visco governor of the bank of italy centesimus annus pro pontifice foundation – seventh consultation meeting “ ethos, education and training : avenues toward equality and ethical behaviours in the digital era ” catholic university of the sacred heart milan, 31st january 2020 let me first thank the centesimus annus pro pontifice foundation for organising this meeting and its president, my former colleague anna maria tarantola, for her kind invitation. in this talk, i will first describe the main changes that are taking place in the global economy, focusing on their consequences for employment and work opportunities. i will then discuss the role of education in responding to these changes. over the past 30 years, the world has undergone a radical transformation driven by two main phenomena. the first is technological progress, with the innovations developed in the information and communications sector in the 1990s and, more recently, with the so - called digital revolution. the second is that this process has taken place in the context of a progressive globalisation, i. e. the liberalisation of international trade in goods, services and financial capital, which is being accompanied by strong growth in the cross - country movements of information, ideas and people. these phenomena are having widespread profound effects, right down to our everyday lives : – the introduction of the internet in the early nineties has permanently changed interpersonal communications and is now shaping how consumption and production take place. the rapid development of mobile telephony has favoured its diffusion : while in 1990 there were only two subscriptions per one thousand people around the globe, there is now more than one subscription per head. the share of the global population using the internet has then grown over the last 20 years, from a mere 7 per cent to over 50 per cent, with many countries, and not only the most advanced, well above 90 per cent ; – as a result, the digital economy is among the fastest growing sectors. in the european union it produces about 7 per cent of total value added. the sharp rise in the shares of firms who make a significant part of their revenue by selling online, of those who purchase cloud - computing services and of employees with business access to the internet suggests that in the future this sector will continue to increase rapidly ; – the integration of markets and the international fragmentation of production have given rise to so - called global value chains : for many consumer goods, each single component is sourced from the countries where it is produced most

own staff. this would require strong public secondary education, diploma studies, and postgraduate studies, and not necessarily public vocational education. ( there are examples of such an approach primarily in the it and telecommunications areas. ) • the second possibility is state - commissioned education. since investments into human capital promote innovation and bring about other positive effects, state investments into the area are justified as the private sector invests less than is socially optimal. estonia is quite progressive in that field - we spend 6 - 7 % of the gdp on education, which is more than in other transition countries and similar to the respective levels in finland and sweden. • even though state - controlled development of human capital requires increased spendings from the national budget, it is relevant that some of the expenditure will be later recovered through additional receipts since rising productivity and employment boost tax revenues. • the third option is to secure as efficient as possible operation of the education market in the private sector where people themselves pay for their education. one possibility to contribute to this is, for example, through carefully planned implementation of the system of education capital units that has already been under discussion, in the similar way to the pension insurance system that has been successfully launced. when we know which areas will boost estonia's competitiveness, we should make sure that those who pay for their education themselves would choose the right specialities ( they should be motivated by the fact that their anticipated pay is going to be higher - hence they would be willing to bear higher costs ). currently the problem in estonia is that people choose law and business specialities where the external impact is small, and fewer engineering professions, mathematics, etc. where the external impact is presumably high. • probably the main problem here is lack of information. in order to secure improved circulation of information, future students should be systematically informed of the differences in pay and the opportunities of finding employment in different areas - however, pay differences today do not always reflect what is to become in the future. for example, the excessive supply in business specialities compared to other areas should lower entry - level salaries. another area about which students should be systematically informed is the level of schools. if the aim of the upper secondary school is to send students on to higher educational establishments, the percentages of those admitted to universities should be publicised on a permanent basis. this requires the state to take action. • developing an integral framework for supporting innovative activities - including measures related to labour quality and promoting innovation as well as venture capital