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Applying behavioural insights to improve life chances

January 22, 2016 David Halpern

A quiet moment in Davos, among the world’s elites, is a strange place to reflect on those whose accidents of birth make it hard to get to a place like this, even from a relatively affluent country like Britain. I’m here as Chair of the WEF group on behaviour, and there’s certainly no shortage of behaviourally-based challenges to take on: from the cruel twin challenges of obesity and starvation; group conflict and extremism, energy use and human-induced climate change; to the animal spirits that swing and destabilise economies. But the organising theme of this year’s gathering is the possibility presented by the ‘fourth industrial revolution’: the dividend and disruption resulting from the convergence of different technologies such as mobile computing, robotics, biotech, – and the implications for uncovering a more sophisticated understanding and prediction of human behaviour.

A key question for many societies is whether this new wave of converging technologies will create greater opportunities for all or open new dislocations and gulfs between winners and losers. The latest Oxfam report, that the richest 62 people in the world now have the same wealth as the bottom 3.5 billion, is hardly encouraging.

Back in the UK, the Prime Minister David Cameron last week made a wide-ranging speech about life chances that merited more attention than it got (overshadowed as it was by the sad news about David Bowie). The UK economy is performing better than many of those from where Davos participants have jetted from, with millions of jobs created since 2010. This success has sucked in labour from across Europe, creating its own political tensions. But concerns remain that many of these jobs remain low skilled and low paid, and for those in the bottom half of our economy, their long-term prospects under a ‘fourth industrial revolution’ are uncertain at best. The latest Edelman statistics, showing a deepening in the cleavage in trust in business and government in university educated half of our populations versus the less educated is timely reminder of these tensions.

Behavioural science might seem to seem a strange place to turn for inspiration. But in his speech, the PM explicitly cited the work of Kahneman, Dweck, Putnam and others familiar to readers of this blog. That itself should be cause for curiosity. But it’s the linking of this work to policy, and the direction of travel that is signals, that is really worth noting. In a world of ever smarter robots, we’d really better understand what us humans can do well.

One of the most interesting developments in behavioural science in recent years has been the unpacking of the more subtle factors that drive and mediate disadvantage and poverty. Eldar (my co-chair on the WEF behaviour group) and Sendhil’s work on Scarcity rightly won the BX2015 award. Why is it that a Kenyan market seller spends half her profit on money lenders rather than saving a tiny sum each day to escape such debt? Or why does a low income family in the UK or USA spend twice as much on a stove (cooker), bought on expensive hire purchase, than a middle class family? We now know it’s about more than lack of financial resources, but also ‘tunnelling’ and the ‘cognitive tax’ that seems to flow from having other money worries on your mind. In the speech, the PM backed an idea that a number of behavioural scientists have argued for: ‘I can announce today that we intend to bring forward a ‘help to save’ scheme to encourage those on low incomes to build up a rainy day fund, and full details of this scheme will be announced at the Budget.’

Pension savings have been transformed through the application of behavioural insights, with more than 5 million extra savers added in the UK since 2012, particularly among young and low income groups. It’s exactly the kind of challenge that at least some of the socially minded, data-savvy entrepreneurs at Davos might want to have a look at. As it happens, one major bank just announced that it plans to do so through an app that prompts and encourages saving. But illustrating the challenge, many in the banking sector aren’t sure what the business model is in helping people avoid expensive debt and charges…bring on the challengers?

Carol Dweck’s work, and the wider promotion of ‘soft skills’ or character, featured heavily in the PM’s speech. There has been a rising tide of interest across the world in the role of such skills over recent years, both in relation to inequality and to economic growth and wellbeing more generally. These skills look to be especially important in a world where humans’ market advantage is, well, being human (though Davos-regular Justine Cassell’s work on ‘social AI’ at Carnegie Mellon perhaps suggests we shouldn’t be too sure…). Either way, we need to move from vaguely talking about soft skills; to measurement (for more see Angela Duckworth’s Character lab); and onto what interventions work to enhance them (see EIF and EEF, as well as new BIT work).

The PM also talked a lot about parenting, the very early years, and what more we could do to stimulate and support the development of children long before they come anywhere near a school. It is an interesting question whether, alongside the most early interactions we experience in the family home, technology might itself lend a helping hand. It’s striking that the winner of last year’s Bloomberg city prize was a project to help coach parents from disadvantaged backgrounds to talk more to their children. But for now at least, this is a job that we cannot subcontract to robots…

Ultimately, humans may be far from perfect creatures, but it is deep in our humanity to want to help each other. Most of us would like to see the life chances of the more disadvantaged improve, from the surreal snowy bubble of Davos; the ‘bubbles’ of Westminster, Berlin or Washington; to communities across the world. How much the ‘fourth industrial revolution’ will really change our world is yet to be seen, but if we can temper it with a little insight into ourselves, perhaps we can make it a revolution that benefits the lives of the many, not just the few.

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