The UK’s persistently weak business investment rate relative to peer economies is one of its most enduring economic challenges. A wide range of structural explanations for this gap have been examined. However, whether the attitudes of those who make investment decisions differ systematically from counterparts in comparator economies has not, to our knowledge, been analysed to date. This paper provides that comparison.
Drawing on 34 survey items from five cross-national survey datasets – the Global Preference Survey, the World Values Survey, the European Social Survey, and two modules of the International Social Survey Programme – we compare UK managers to managers in fifteen peer economies across six investment-relevant dispositional constructs: aspiration levels, satisficing, short-termism, risk and loss aversion, ambiguity aversion, and status quo bias. The findings are descriptive rather than causal; we treat consistency across multiple surveys and items as the primary criterion for a robust pattern, rather than relying on any single estimate.
Our headline finding runs counter to a common assumption in UK policy commentary: based on our data, UK managers are not less ambitious than their counterparts. The picture on the remaining constructs is less reassuring: UK managers are more prone to satisficing, consistently more risk and loss averse, and show some evidence of greater ambiguity aversion and short-termism than comparator managers. The risk and loss aversion finding is particularly interesting. It reflects both a consistent directional signal toward greater risk aversion in the UK population and a weaker tendency away from risk aversion in UK managerial selection than in comparator countries. The result is a distinct UK manager profile: ambitious but risk averse.
This finding has potentially important policy implications. First, risk averse managers may amplify the investment-dampening effects of an uncertain operating environment, further emphasising the importance of policy stability. Second, policy instruments that truncate downside losses could be more cost-effective than the return-enhancing subsidies that dominate current UK investment support. Finally, governance, educational, and skills interventions that could shape the UK management cadre towards better-calibrated risk-taking warrant further attention.
Authors Tera Allas CBE and Stephen Roper