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Our new report, ‘Boosting businesses: applying behavioural insights to business policy’, provides a guide to policymakers on how behavioural insights can make business policy more effective. We set out lessons from first generation interventions to improve take-up and engagement among firms. Our accompanying practitioners’ toolkit includes guidance, tips and resources. We also set out next generation interventions that policymakers should turn to next: fixing business markets, improving diffusion of new ideas, and incorporating behavioural insights into mainstream economic policies.
Andy Haldane, Chair of the Industrial Strategy Council, said:
Countries around the world are gravitating back towards industrial policies. That is both welcome and timely. But the effectiveness of these new generation strategies requires some new generation thinking on how behavioural economics can help. This report provides that.”
Tony Danker, Chief Executive of Be the Business, said:
“Reversing a decade of flatlining productivity is the single biggest economic issue facing the UK. Turning things around requires a firm-level response, encouraging every business to make it their mission to improve performance. This can only happen with wider use of behavioural insights to inspire and motivate leaders in businesses across the UK.
“BIT are right to identify market failures in business support where demand is low and quality of supply is mixed. High quality service providers that really add value to their clients’ business can often be obscured by the flood of offerings in the marketplace. There is a very real downside for a company that receives poor quality service, and so a business owner will often prefer not to seek support rather than run the risk of getting bad advice. Greater transparency and comparability of business service markets is badly needed to improve this.
“Be the Business will certainly adopt these recommendations in our work to improve the uptake of business practices proven to drive up performance.”
Sonali Parekh, Head of Policy Federation of Small Businesses said:
“Government support is vital for small businesses seeking to boost their productivity – whether through investing in innovation or starting exporting. We have long argued that the golden thread of effective policy to help small businesses is to truly understand and work with the grain of how small business owners make decisions in real time. This important research shines a light on this. Of course Government does not hold the monopoly on support for small business. For new time strapped start-ups – being able to identify a high performing banking service or provider of export support in a quick and easy way, could prove the difference between surviving and thriving and going out of business. The power and effectiveness of peer to peer support should also not be underestimated. We would encourage all policy makers to give serious consideration to these recommendations.”