There has been a lot of talk around the rise of Behavioral Economics as a tool for solving business problems. Behavioral Economics is the study of psychology as it relates to the economic decision-making processes of individuals and institutions. It started to gain popularity in the early 2000’s and today we see many countries around the world using the power of Behavioral Economics.
Let’s see Behavioral Economics from the lens of Simon Sinek’s “Law of Diffusion of Innovation”. He suggests, the law of diffusion of innovation tells us that you have to have between 15 and 18% of a population to accept an idea before you hit the tipping point. (See Pic Below)
There are some countries where government agencies and private institutions are using Behavioral Insights extensively and they have achieved great results. UK government’s (Behavioral Insights Team) BIT is one such example of Nudge Unit successfully operating since a decade now. UK, USA can be considered as the innovators with BIT, Big Harvard, and Ideas42 on the forefront with extensive research and applications to get great effect.
However, the line between early adopter and early majority is very thin and some countries may fall on either side of the spectrum basis how much of BI have been used by local government and institutes. For better understanding we have mentioned few counties on the “Early Adopter” category who are leading applications of BI while few are mentioned on the “Early Majority” category which has their own nudge units started may be a few years back (See Pic Below).
The rise of Behavioral Economics has just begun keeping the world context in mind and many countries are yet to explore its power. In a country like India with such diversity in population Behavioral Economics can have a huge role to play and lot of Institutes & academia needs to come together to play a vital role. Companies like Briefcase & Final Mile Consulting have been in this space and we at SDG Centre of Excellence are working closely with academia and industry to implement insights from BE but yet that does not bring India on the map of BI World as hardly any government agencies are using it.
So what’s the future of BE holds around the world is a question that needs to be answered by the Industry Stalwarts and people who have been the front runner and inspiration for many BE enthusiast around the world and trust me there are many leading the race. If you are a BE Stalwart, Practitioner or an Enthusiast. Do write your comments on this article and share it with more people to unleash the power of Behavioral Insights.