The Behavioural Insights Team (BIT) has just published its response to the new UK Industrial Strategy and both BIT and I are pretty positive about it. Let me tell you why and then, let me tell you what’s still wrong with it.
Experimentation and Evaluation
The strategy (see link at the bottom of this page) recommends taking an empirical approach to policy making.
This is not so much to determine policy objectives but to test what works in terms of implementing objectives and making sure that there is some soft of feedback loop between implementing, evaluating and re-formulating how the policy is implemented. This is great, not just because it brings scientific method into policy but because it accepts that the social world is complex and you often cannot anticipate how a policy will play out in practice.
How many times have policies failed, not because the intentions are bad but because of the unanticipated consequences (do I have to say ‘Universal Credit’ to make the point?)? Why is it not a requirement of all legislation to monitor its consequences in a systematic way and sharpen it up around the edges or abandon it (dare I say Brexit – see ‘Is the referendum decision definitive?’)?. Politics is still unfortunately a matter of who shouts the loudest – see ‘Policy Regulates Behaviour’.
Using Data to Improve Government Services
The strategy argues for better use of data (especially ‘big data’) to improve government services. This is similar, in principle, to the first point about bringing science into policy. It’s another strand of taking an empirical approach.
My observation here is that its not just data. It’s information. Raw data requires interpretation. Raw data contains many biases in what is collected, the way it is collected and the way it is reported and used. For example, even now it is recognized that machine learning, based on historical training data, can build in historical biases and can embed in algorithms, biases that on reflection, we might prefer not to perpetuate. Therefore, by all means use data to improve services, but that’s not enough. There may need to be several layers of analysis above the raw data, looking at it as part of a large and complex system, before it can be used meaningfully.
Making Markets more Dynamic
One of my favourite activities is identifying how companies (and public services) play on our deficiencies in energy and effort, ability and cognition. We are slow to change suppliers even when there is a better deal. We are confronted by confusion marketing that makes it nearly impossible to compare deals. Complaint mechanisms make it exceedingly difficult to get remedies and effect changes in company procedures. I have a particular gripe regarding how companies mis-use their power to affect credit ratings when people have genuine grievances. And the regulators are no better, often putting further obstacles in the way of effecting change. This results in a severe lack of accountability in the running of both commercial companies and public services (see ‘It doesn’t end with Grenfell’ and ‘society can drive you mad’).
The use of feedback to improve product and service design and management procedures is a valuable and overlooked resource. Instead of defending against complaints, institutions need to use complaints as a primary mechanism of re-designing and improving services.
But beyond feedback there is an ethical dimension. Businesses that mislead and manipulate consumers do a disservice to everybody including themselves. We need to re-think economics so that organizations are measured on the true value they deliver and not on their ability to cut costs or provide returns to directors and shareholders. See ‘True Value’.
Innovating at a User and Local Level
In a recent report on local government, a team I am part of, recommend ‘Innovation at the user and local level’. See ‘Local Government’. In a world in which 8 people own over half of the world’s resources, change will only happen from the ground up.
Managing the Managers
It is not just that managers (especially middle managers) in the UK need to be better trained. They also need to be better and more authentic leaders. They need to encapsulate the values that we can admire and respect and earn their place, not just because they are good at cutting costs or making money, but because we acknowledge that they are doing their best to make society a better place. See ‘Is it Time we had authentic leadership?’.
And in relation to ‘productivity’ we have got it all wrong. We must go much further than this to redefine productivity to genuinely reflect value. Productivity should not be measured in terms of economic indices like Gross Domestic Product (GDP). We have to measure where genuine value is added (again see ‘True Value’) and consider other ways in which the wellbeing of society can be measured (see ‘The New Economics’).
Let’s praise the White paper on the New Industrial Strategy. It’s going in the right direction. But at the same time, let’s recognize that it’s not going far enough.
Article, The UK’s new Industrial Strategy: a modern foundation for economic growth – Robbie Tilleard, Nida Broughton and Elisabeth Costa, November 2017
BIT Commentary on the UK Economic Strategy, November 2017
Article, The UK’s new Industrial Strategy: Access to Government White Paper, November 2017
UK Government White Paper on the UK’s Economic Strategy, November 2017