Pi-Consulting

Citizens of the USA still profess to believing in The American Dream, that anybody can rise to the top through his or her own efforts, if they are prepared to gamble on the hand life has dealt them. The British, by contrast, seem to harbour curious attitudes to both risk and reward. They also cling to some strange ideas about how the two interconnect.
By way of illustration, one joke doing the rounds has two blue-collar workers, American and English, clocking off work at their respective factories. The American watches the big boss sweeping through the factory gates in his stretch limousine, and vows to himself “One day I’ll have a car like that”. The English worker glowers malevolently after his boss’s top-of-the-range Mercedes, and mutters “That flashy git, he ought to be riding a bicycle like the rest of us”.

How is it that taking risks and achieving success gets you praise and recognition in New York, Hong Kong or São Paulo, while in Britain it just means you get your car scratched by some jealous person’s keys?

Simple envy aside, part of the reason is to be found in a strangely pervasive British attitude of risk aversion, buried in the national psyche alongside what’s left of the once famous ‘British sense of fair play’; (which seems to have shrunk of late, by the way, with ‘fair play for me’ now rather more important than ‘fair play for everyone else’).

The entrepreneurial spirit is often viewed with suspicion in the UK. Compared with their American or German counterparts, the parents of young Britons seem to discourage their offspring from setting up in business on their own account, as indicated in a survey by the London Business School and America’s Babson College. The head of Babson’s entrepreneurial studies department — the fact that they have one tells you a lot! — reckons that successful business people in the UK are not the acknowledged role models they would expect to be elsewhere.

Is this an especially British aberration? Are people perhaps becoming more risk-averse in other countries too? The evidence suggests otherwise. Recent researches indicate that in continental Europe, more people are prepared to take risks in order to get what they want in life. Britain is currently seen as one of the few exceptions, with dwindling numbers of people choosing to ‘walk on the wild side’. This reticence may be a by-product of the recent years of growing national prosperity. The complacent see no special reason to take risks when they are already perfectly content with their lot.

So are the Brits losing their nerve? Businesses like insurance would be delighted if they were. One of the advantages of values-based consumer insight research is that it can help to identify social groupings who think “risk is good”, and accordingly may represent ‘bad risks’ to insurers. With the right data, the insurance industry can reduce its exposure and improve its profitability through an elaborate game of ‘Spot-the-Risk-Taker’, leading in some cases to differential premium rates which penalize the foolhardy.

There is another area in which Anglo-Saxons on both sides of the Atlantic are happy to take a risk or two: gaming and lotteries. Gambling in the USA generates annual revenues of $50 billion — that’s after payouts — with state lotteries accounting for about two-thirds of that staggering sum. The British are newer to the lottery game, but have already proven no slouches at it. When it launched a decade ago, the Financial Times described the National Lottery as “a tax on stupidity”. The odds are certainly pretty forbidding at 14-million-to-one, but that daunting figure has not stopped tens of billions of UK pounds from flowing into the coffers of the lottery operator.

Across their history, Britons were never averse to taking a gamble. It is hard to imagine them staying risk-averse for long. Can predictions of a return to form be made with any confidence?

Yep, we reckon we’ll risk it.