Innovation in Europe Improves, But Only in a Handful of Countries

ENLARGE

European Commissioner of Research, Science and Innovation Carlos Moedas during press conference at the European Commission headquarters in Brussels in April. PHOTO: EUROPEAN PRESSPHOTO AGENCY

Innovation in Europe is catching up with the U.S. and Japan, but the improvement in the bloc’s performance is only coming from a handful of its 28 members, the European Commission said Thursday.

Sweden remains the EU’s top innovator, while Latvia is the fastest growing one, according to figures from the 2016 European Innovation Scoreboard, the EU’s annual report on innovation across the bloc. Despite a slight decrease in its  figures, Switzerland — which is not in the EU —  is still the overall innovation leader in Europe.

The top performing EU members are already on a par with the U.S., Japan and South Korea, although these three countries retain their lead over the bloc. The EU is closing on the U.S. and Japan in terms of innovation performance, but South Korea continues to widen its competitive lead. China, still behind the EU in terms of innovation, has a performance growth rate five times that of the bloc.

“Leading countries and regions are supporting innovation across a wide range of policies from investment to education, from flexible labor conditions to ensuring public administrations that value entrepreneurship and innovation,” said Carlos Moedas, the European commissioner for research, science and innovation.

But excellence in innovation is concentrated in just a few areas of Europe, with the most innovative regions typically found in the most innovative countries, highlighting the divergence in economic performance across the bloc.

All 36 of the EU’s regional innovation leaders are located in just seven EU countries: Denmark, Finland, France, Germany, the Netherlands, Sweden and the U.K.

The convergence observed since 2012 appears to have come to a halt too.

Since 2008 the innovation performances of 21 EU member states have increased but in the past year growth has only been seen in seven countries: Bulgaria, Denmark, France, Ireland, Malta and the U.K..

Latvia, the fastest growing country in terms of innovation, attained a 4% uptake in its performance in 2015. Romania, the worst-placed EU country, saw its performance drop by 4.4%.

The report pointed to appropriate investment, partnerships with academia and a strong research base as key drivers of innovation leadership in the best performing countries. The development of markets for innovative products was also highlighted as important.

Germany was singled out in the report as the top country for innovation, both for science-based research activities and investments in advanced equipment and machinery. Ireland was the leader in nurturing innovation in small and medium-sized companies, producing high numbers of innovative produces and jobs in fast-growing new companies.

“I want Europe to be a place where innovative SMEs and start-ups flourish and scale up within the single market,” said Elzbieta Bienkowska, the EU’s commissioner for the internal market and industry.

Ms.  Bienkowska pointed to the need for a simplification of regulation on sales taxes, adapted insolvency rules, better access to information on regulatory requirements and work on a SME-friendly intellectual property framework.

The European Innovation Scoreboard compares research and innovation performance in EU countries as well as Iceland, Israel, Macedonia, Norway, Serbia, Switzerland, Turkey, and Ukraine. On a more limited number of performance indicators the report’s assessment also includes Australia, Brazil, Canada, China, India, Japan, Russia, South Africa, South Korea, and the U.S..

Por: Joseph Ataman

Fonte: WSJ/RealTimeBrussels, em 14 de Julho de 2016

Oportunidade da África pós-Brexit

CALESTOUS JUMA

Calestous Juma, Professor of the Practice of International Development at Harvard’s Kennedy School of Government, is the author of Innovation and Its Enemies: Why People Resist New Technologies.

LONDON – The entire world felt the shock waves from the decision by voters in the United Kingdom to leave the European Union, and Africa was no exception, especially given its close historical ties with many EU member states. African pundits and public officials were quick to lament the new cloud of economic uncertainty and the potential for catastrophe in the near future.

Namibia has been alone in downplaying the Brexit fallout, most likely because its exports to the EU have declined significantly in recent years. But the rest of Africa is right to be taking it seriously, at least with respect to the short-term outlook.

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Yascha Mounk on the growing instability of liberal democracy – and what Joschka Fischer, Nina Khrushcheva, Bernard-Henri Lévy, and others think should be done about it.

However, from a long-term perspective, Africa should be optimistic. Most of the post-Brexit handwringing reflects traditional thinking that ignores the economic goals of both African countries and the UK. Dire warnings about Africa’s position as an exporter of raw materials to the UK and Europe assume that the full extent of cooperation between the two continents will forever be limited to commodities trading.

Africa aspires to much more than this. As Africa’s youthful population continues to come of age, it will push for more innovation and less reliance on commodity exports. In fact, Africa’sAgenda 2063 framework, adopted by the African Union in 2013, aims to establish the continent as a collection of “learning economies”: diversified, education- and innovation-driven, with a higher position in global production chains than extraction of raw materials.

In 2014, the AU adopted the Science, Technology, and Innovation Strategy for Africa (STISA) – a roadmap that calls for national and regional governing bodies to increase investment in research infrastructure, education, and other necessary conditions for technological innovation and entrepreneurship. Beyond those baseline investments, the plan also establishes a framework for engagement between Africa and its northern neighbors.

The STISA scheme places scientific cooperation above national politics. Though the Brexit vote is generally regarded as a symptom of rising nationalist sentiment in the UK, it doesn’t follow that the UK – or individual remaining EU member states, for that matter – will stop viewing science and technology as drivers of economic growth. In fact, scientists in the UK have already come together to demand that EU funding for research at British institutions not be compromised in any exit negotiation. Whatever the outcome, the possibilities remain strong for Africa to enter into future partnerships with the UK and the EU to advance its own innovation agenda.

In the future, national and supranational issues will, one hopes, matter less for innovation. But the new competition between EU member states and a non-member UK could lead to renewed investments in science and technology within those countries. This will take place in traditional innovation hubs – in cities with research universities, existing tech and science sectors, and few regulatory hurdles for entrepreneurs.

Like Silicon Valley, these hubs will become subnational ecosystems with a global presence. So, whether innovations come from the UK, the EU, or elsewhere, there will be opportunities in the international marketplace for African countries that have prepared for them.

This will require adjustments in Africa’s economic diplomacy. Rwanda, Ethiopia, and Kenya have already modified their foreign policies, particularly their placement and selection of ambassadors, to focus on global economic and trade issues.

Moreover, Africa’s position on the global economic stage will improve significantly when the Continental Free Trade Area negotiations conclude in 2017. The CFTA will comprise a market of more than a billion people with an initial GDP above $3 trillion. It will remove trade barriers and boost investment in infrastructure so that African countries have the industrial capacity to compete globally. All told, the CFTA is a grand opportunity for Africa to reshape its relations with the UK and the rest of the world.

Post-Brexit forecasts of doom and gloom for Africa’s export-driven economies miss a fundamental fact: these economies will soon be relying far less on commodity exports. When Africa’s potential for innovation and entrepreneurship is taken into account, a long-term perspective indicates a much brighter future.

From Brexit to the Future

JOSEPH E. STIGLITZ

Joseph E. Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences in 2001 and the John Bates Clark Medal in 1979, is University Professor at Columbia University, Co-Chair of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress at the OECD.

NEW YORK – Digesting the full implications of the United Kingdom’s “Brexit” referendum will take Britain, Europe, and the world a long time. The most profound consequences will, of course, depend on the European Union’s response to the UK’s withdrawal. Most people initially assumed that the EU would not “cut off its nose to spite its face”: after all, an amicable divorce seems to be in everyone’s interest. But the divorce – as many do – could become messy.

The benefits of trade and economic integration between the UK and EU are mutual, and if the EU took seriously its belief that closer economic integration is better, its leaders would seek to ensure the closest ties possible under the circumstances. But Jean-Claude Juncker, the architect of Luxembourg’s massive corporate tax avoidance schemes and now President of the European Commission, is taking a hard line: “Out means out,” he says.

That kneejerk reaction is perhaps understandable, given that Juncker may be remembered as the person who presided over the EU’s initial stage of dissolution. He argues that, to deter other countries from leaving, the EU must be uncompromising, offering the UK little more than what it is guaranteed under World Trade Organization agreements.

In other words, Europe is not to be held together by its benefits, which far exceed the costs. Economic prosperity, the sense of solidarity, and the pride of being a European are not enough, according to Juncker. No, Europe is to be held together by threats, intimidation, and fear.

That position ignores a lesson seen in both the Brexit vote and America’s Republican Party primary: large portions of the population have not been doing well. The neoliberal agenda of the last four decades may have been good for the top 1%, but not for the rest. I had long predicted that this stagnation would eventually have political consequences. That day is now upon us.

On both sides of the Atlantic, citizens are seizing upon trade agreements as a source of their woes. While this is an over-simplification, it is understandable. Today’s trade agreements are negotiated in secret, with corporate interests well represented, but ordinary citizens or workers completely shut out. Not surprisingly, the results have been one-sided: workers’ bargaining position has been weakened further, compounding the effects of legislation undermining unions and employees’ rights.

While trade agreements played a role in creating this inequality, much else contributed to tilting the political balance toward capital. Intellectual property rules, for example, have increased pharmaceutical companies’ power to raise prices. But any increase in corporations’ market power is de facto a lowering of real wages – an increase in the inequality that has become a hallmark of most advanced countries today.

Across many sectors, industrial concentration is increasing – and so is market power. The effects of stagnant and declining real wages have combined with those of austerity, threatening cutbacks in public services upon which so many middle- and low-income workers depend.

The resulting economic uncertainty for workers, when combined with migration, created a toxic brew. Many refugees are victims of war and oppression to which the West contributed. Providing help is a moral responsibility of all, but especially of the ex-colonial powers.

And yet, while many might deny it, an increase in the supply of low-skill labor leads – so long as there are normal downward-sloping demand curves – to lower equilibrium wages. And when wages can’t or won’t be lowered, unemployment increases. This is of most concern in countries where economic mismanagement has already led to a high level of overall unemployment. Europe, especially the eurozone, has been badly mismanaged in recent decades, to the point that its average unemployment is in double digits.

Free migration within Europe means that countries that have done a better job at reducing unemployment will predictably end up with more than their fair share of refugees. Workers in these countries bear the cost in depressed wages and higher unemployment, while employers benefit from cheaper labor. The burden of refugees, no surprise, falls on those least able to bear it.

Of course, there is much talk about the net benefits of inward migration. For a country providing a low level of guaranteed benefits – social protection, education, health care, and so forth – to all citizens, that may be the case. But for countries that provide a decent social safety net, the opposite is true.

The result of all this downward pressure on wages and cutbacks in public services has been the evisceration of the middle class, with similar consequences on both sides of the Atlantic. Middle- and working-class households haven’t received the benefits of economic growth. They understand that banks had caused the 2008 crisis; but then they saw billions going to save the banks, and trivial amounts to save their homes and jobs. With median real (inflation-adjusted) income for a full-time male worker in the US lower than it was four decades ago, an angry electorate should come as no surprise.

Politicians who promised change, moreover, didn’t deliver what was expected. Ordinary citizens knew that the system was unfair, but they came to see it as even more rigged than they had imagined, losing what little trust they had left in establishment politicians’ capacity or will to correct it. That, too, is understandable: the new politicians shared the outlook of those who had promised that globalization would benefit all.

But voting in anger does not solve problems, and it may bring about a political and economic situation that is even worse. The same is true of responding to a vote in anger.

Letting bygones be bygones is a basic principle in economics. On both sides of the English Channel, politics should now be directed at understanding how, in a democracy, the political establishment could have done so little to address the concerns of so many citizens. Every EU government must now regard improving ordinary citizens’ wellbeing as its primary goal. More neoliberal ideology won’t help. And we should stop confusing ends with means: for example, free trade, if well managed, might bring greater shared prosperity; but if it is not well managed, it will lower the living standards of many – possibly a majority – of citizens.

There are alternatives to the current neoliberal arrangements that can create shared prosperity, just as there are alternatives – like US President Barack Obama’s proposed Transatlantic Trade and Investment Partnership deal with the EU – that would cause much more harm. The challenge today is to learn from the past, in order to embrace the former and avert the latter.

Países da UE reforçam as regras para conter a evasão fiscal

As corporações multinacionais podem ter mais dificuldade em escapar à tributação após os membros da União Europeia terem tornado mais rigorosas as regras para combater a evasão fiscal esta terça-feira. Fonte: New York Times

E.U. Countries Tighten Rules to Counter Tax Avoidance

By REUTERSJUNE 21, 2016

      An Amazon warehouse in Brieselang, Germany. The European Union wants to collect more taxes from multinational businesses. 

Credit

Sean Gallup/Getty Images

BRUSSELS — Multinational corporations may find it harder to escape taxation after European Union states tightened rules on Tuesday to counter tax avoidance.Public anger has grown since news articles revealed how companies such as Amazon and Starbucks have used legal means to vastly reduce their tax bills and since the Panama Papers and the so-called Luxleaks scandals exposed the extent of problem.

“Today’s agreement strikes a serious blow against those engaged in corporate tax avoidance,” said Pierre Moscovici, the European commissioner in charge of tax issues.

The measures include powers for governments to tax profits shifted by companies based in the European Union to low-tax countries where they have no real business activity, and to tax assets developed in the European Union and then transferred outside the bloc, a trick often used to avoid taxes on intellectual property patents.

The measures will turn nonbinding international standards into binding rules and go beyond what has been agreed to by the Organization for Economic Cooperation and Development.

But the compromise — which had to be agreed to unanimously by the 28 European Union states — was reached after some of the most contentious provisions were scrapped or delayed, raising doubts about the effectiveness of the new measures.

The humanitarian organization Oxfam, which says tax avoidance exacerbates global poverty, called the watered-down rules “wastepaper” and said that the European Union had missed an opportunity to fight the problem.“It is outrageous that governments have been unable to agree on an effective approach against parking profits in tax havens while repeated tax scandals are calling for immediate and efficient action,” Oxfam said.Several smaller European Union countries that have tax policies intended to attract multinationals had feared that companies could leave if the rules were too severe.

To quell concerns, a proposal known as a switch-over clause was dropped. It would have taxed dividends and capital gains that European firms pay to companies they control in low-tax or tax-free countries to avoid taxation.National governments were also granted leeway on how to apply new measures to reduce deductions on interest payments. States, under certain conditions, will be able to keep their own rules in place until 2024, rather than the 2019 deadline originally proposed.

Após o voto no Brexit, uma escolha para a Europa, avançar, ou retroceder

Estará a Europa acabada? Por: Eduardo Porter Fonte: New York Times Ver também: Que via seguir? Europa dividida no caminho pós-Brexit Os europeus terão que lutar para arrancar a UE da crise após a votação da Grã-Bretanha na quinta-feira (23 de junho), com a hostilidade pública em relação a uma maior integração, enquanto Berlim e Paris estão em desacordo sobre o caminho a seguir. 

by Eduardo Porter

in New York Times, 21 de Junho de 2016

After Brexit Vote, a Choice for Europe: Move Forward, or Fall Back

Is “Europe” finished?

The latest polls and political prediction markets this week suggest that Britons will vote on Thursday to stay in the European Union. The Leave campaign, led by Boris Johnson, the former mayor of London who tried to whip up a surge of resentment against immigrants into a vote for Britain to leave the bloc, looks set to fail.

But even if the pro-European Remain cause pulls out a victory, the popular hostility against the decades-long process of European integration — evident not only in Britain but across the Continent — underscores a defining weakness. Europe itself lacks a firm democratic foundation.

Europe’s leaders face a clear-cut choice: For their integration agenda to succeed — preserving the free movement of people within the bloc, forging ahead with the euro and the single market, keeping doors open to outsiders — the E.U. must figure out how to overcome the narrow national interests and mistrust that tie it up in knots every time a collective response is needed.

That will require democracy on a European scale. If Europe’s national governments remain unwilling to cede political power to regional institutions that have democratic legitimacy, the European Union will slide backward.

“We need pan-E.U. politics,” argued Mary Kaldor, professor of global governance at the London School of Economics. “I don’t know how we get there.”

For all the complaints about the Brussels fudge factory, the discontent in Britain on Thursday probably will have little to do directly with Europe’s institutional shortcomings. “This is about frustration of the working class about a long period of deindustrialization,” Professor Kaldor said. Mr. Johnson is Britain’s Donald Trump. Europe is a stand-in for globalization.

Graphic | What Is Driving the ‘Brexit’ Debate, and What a ‘Leave’ Vote Could Mean British citizens will vote on whether their country should remain a member of the European Union. While a vote to leave would give Britain more autonomy, it could also create great economic uncertainty.

“Popular discontent with globalization in its many forms has been building up in the West for many years now,” said Kevin O’Rourke, an economic historian at the University of Oxford. “We are seeing its effects everywhere.”

Still, the European Union’s hapless response to its current social and economic challenges has made it an easy target. With no real European institutions of democratic accountability — the European Parliament serves little more than a decorative function — the only way voters can express their dissatisfaction is by pushing to leave and by supporting extremist political movements.

“In many countries the perception is that national governments are powerless and that there is nothing at the European level to address problems,” said Paul De Grauwe, a former Belgian member of Parliament now at the London School of Economics. “Both Europe and national governments lose legitimacy.”

What could the E.U. have done better? Things would be a lot easier if most of Europe were growing at more than a snail’s pace. The inability of countries in the euro area — which does not include Britain — to stop the slow-motion implosion of Greece and other deeply indebted countries gives integration a bad name. The two are related.

Germany’s resistance to share in the costs of a collective solution to seriously write down the debts that Greece and other Southern European nations will never be able to pay off — insisting instead that the indebted countries and their beleaguered citizens bear nearly all the cost — has prolonged and deepened Europe’s stagnation.

“Britons contemplate the crisis of the euro as a little bit of proof that they were right not to join,” said Giancarlo Corsetti, a professor of macroeconomics at the University of Cambridge.

Britons have more control over immigration than the Leave campaign would have them believe. Refugee policies are decided in London. And it was the Labour government of Tony Blair that chose not to take advantage of a seven-year phase-in period to limit the entry of citizens of new members from Eastern Europe. Many of the Polish plumbers that so inflamed the British populace showed up because Britain — unlike, say, Germany — chose to let them in straight away.

Immigration, however, can easily be deployed as an argument to leave the rest of Europe. More than half the 333,000 immigrants who arrived in Britain last year were E.U. citizens, free to be there as a matter of right under European law.

“The Leave campaign made an argument that the only way to reduce this part of immigration is to leave the E.U.,” noted Jacob Funk Kirkegaard, an expert on immigration at the Peterson Institute for International Economics in Washington. “And they struck a chord with the electorate.”

Dealing with hundreds of thousands of refugees fleeing war will never be easy. But Europe’s reaction was notoriously unproductive. The E.U.’s institutions again appeared irrelevant, as governments retrenched into their corners and failed to devise a collective, burden-sharing approach.

In May, a group of European scholars proposed a set of collective financing mechanisms to reduce debt burdens along the E.U.’s periphery and to pay for a European Union-wide refugee policy. Their report concluded: “The sovereign debt and refugee crises prove that Europe has failed to design institutions that are robust enough to weather difficult times.”

How much integration do Europeans need? Dani Rodrik at Harvard’s Kennedy School of Government notes that the E.U.’s initial major goal — preventing France and Germany from drawing the world into another war — has been achieved. It also served as a democratic, capitalistic anchor for Eastern European countries to hang onto after the collapse of the Soviet bloc.

Interactive Feature | ‘Brexit’: Explaining Britain’s Vote on European Union Membership Britain will hold a referendum on Thursday on whether to leave the European Union, a decision nicknamed “Brexit.”

But today Europe’s integration effort has lost sight of its political and social dimensions, he argues, narrowing into a raw effort to reduce market barriers. That’s not enough to inspire popular support.

There might be areas where collective action at the European level could make a difference — as a counterweight to colossal multinational companies that can challenge the authority of individual nations, or to prevent capital from effortlessly zipping across borders in an effort to avoid taxes. Indeed, the E.U. has taken a leading role confronting the world’s most daunting collective action problem: climate change.

An aging Europe is going to need more immigrants. Smart collective strategies would surely help the Continent deal with what are likely to be decades of intense migration from the many poor countries in its extended neighborhood.

The critical question is whether Europe will be able to achieve the kind of integrated decision-making needed to address these challenges. So far, it hasn’t shown it can rise to the occasion. “There is not much appetite for further political integration,” Mr. Corsetti said. Solutions to Europe’s challenges must navigate around this constraint.

The free movement of people inside the E.U. might be the first to go into reverse. “Restricting the free movement of labor is not a taboo,” Mr. Kirkegaard told me. “Another way freedom of movement will be restricted is you will see more and more restrictions placed on the ability of citizens from other E.U. countries to claim welfare benefits.”

Maybe the European Union’s future is more “à la carte” — a set of coalitions of the willing, as it were. Rather than insisting on all or nothing, said Richard Haass, president of the Council of Foreign Relations in New York, it might be better to consider “a Europe that is not one size fits all, where the balance between national governments and Brussels is more flexible.”

This may come as a disappointment to Europe’s current leaders. But one way or another, the project’s governance must come into line with what its people want. That’s called democracy.

“Europe must either roll back the economic integration or roll ahead the political integration,” Mr. Haass said, “so people feel they have a say over the politicians who are driving changes that affect their lives.”

Match Your Motivational Tactic to the Situation

by Juliana Schroeder and 

 

Ayelet Fishbach 

In Harvard Business Reveiw

JANUARY 08, 2016

How do you know if you are selecting the right motivational strategies to convince your employees, peers, and even yourself to work smarter and harder?
Behavioral scientists have been researching the different ways people motivate themselves and others for decades. Their experiments have shown, for instance, that people work harder when they get feedback, set ambitious goals, and are given incentivizes.
But after recently conducting a review of more than 150 scientific articles on motivation, we found that each of these motivational tools can also unexpectedly backfire. For example, positive feedback can lead recipients to relax their effort, overly ambitious goals can cause employees to give up, and incentives can undermine intrinsic interest.
Chances are that you (at least sometimes) are using the wrong tools under the wrong circumstances. We propose a set of guidelines for when and how to use different types of motivational tactics, so that you can better understand how to effectively motivate yourself and others.
Feedback
There are two primary forms of feedback: positive and negative. Neither one is better than the other. In some circumstances, positive feedback can be more effective for motivation because it increases people’s commitment and confidence. In others, negative feedback can be more effective because it signals that more effort is needed.
Because positive feedback enhances personal commitment, it works best when recipients are questioning their commitment to a task. That’s why novices or people who are disengaged are best served by positive feedback. A new employee is likely to thrive under positive feedback, but wilt under negative feedback.
In contrast, negative feedback is ideal for people who are already committed to achieving their goals, but just need a push to reach them. Feedback that emphasizes their lack of progress increases their motivation. So people with expertise in a particular domain, such as professional speakers, not only respond better to negative feedback, they also seek more negative feedback.
Goal Setting
To increase performance, it is often useful to set challenging and proximal deadlines (e.g., “finish reading a professional magazine in the next 30 minutes”). People—even animals—tend to work harder and faster when approaching a finish line.
Typically, a shorter distance between you and your goal is more motivating than a longer one. It feels within reach, and it’s easier to feel that you’re making progress. This means people should set closer targets or sub-goals. So instead of telling yourself or your employees to finish a project in the next month, focus on achieving certain milestones by the end of each week.
Research also shows that when beginning to pursue a goal, people should focus on the progress they’ve made rather than on the progress they still have to make. Only when they’re closer to the finish line should people focus on the remaining distance between them and their goal. Focusing on the least amount of distance—either from the start or from the end of your project— is more motivating.
For example, consider loyalty programs that use “buy 10, get one free” cards. These can focus consumers on either accumulated progress (by stamping the card for each purchase) or remaining progress (by punching a hole in the card). A study showed that those who are farther from the reward are more motivated when they receive stamps, because the card highlights how much progress they have already made. Conversely, those who are close to the reward are more likely to keep buying when holes are punched in the card, because that method highlights what is still between them and their reward.
People are also particularly conscientious of their work when they are just beginning to pursue a goal and when they’ve nearly reached it. Research has found that people are more likely to slack off or behave unethically around the middle of a project. Since people will produce their highest quality work as they’re getting started or about to wrap up, it might be useful to re-frame their goal pursuit—by setting smaller goals, for example—so that people don’t feel stuck in the middle.
Another common mistake with goal setting is choosing the wrong means or approach for achieving your objectives. Research has shown that it’s more effective to tailor your approach based on one specific goal you’re trying to reach than to apply a one-size-fits-all approach that could work for any goal. For example, if you want to have more productive staff meetings, it may help to choose an office space that is only used for important group meetings, rather than one that people also associate with one-on-ones or lunch breaks.
Incentives
Incentives can be categorized into three types: immediate (vs. delayed), certain (vs. uncertain), and extrinsic (vs. intrinsic).
Immediate incentives are psychologically more appealing than delayed incentives. People will work harder for incentives they can get sooner—even if they are smaller than those they would get after waiting longer. The lesson here is simple: To motivate people, use immediate incentives.
People similarly prefer incentives of a certain value over those of an uncertain value. For example, compared to a promotion that offers shoppers an uncertain reward (e.g., “$30 or $50 off if you spend over $200”), one with a certain reward (e.g., “$40 off if you spend over $200”) would more likely fare better.
However, there are times when uncertain incentives can be more motivating. If they offer a higher potential value, for instance, people may be optimistic and more motivated to pursue them. They can also be exciting, leading some to work harder. In one experiment participants evaluated a series of print advertisements in return for a prize of either a certain amount or an uncertain amount. In the certain conditions, participants expected a bonus of 50% of their base pay. In the uncertain condition, the bonus could either be 20% or 50% of their base pay (to be determined by a lottery). People who expected a bonus of 50% of their base pay worked less hard than those who weren’t sure what their bonus would ultimately be, which suggests that “mystery” rewards (i.e., of uncertain value) can be exciting and push some to work harder.
Incentives can also be extrinsic (e.g., money, perks, etc.) or intrinsic (e.g., satisfying work). Some activities offer both: a paying job can also be satisfying. However, adding extrinsic incentives often leads people to see less intrinsic benefit. In one study, children were less willing to consume food when it was framed as healthy (extrinsic benefit), because they then perceived the food as being less tasty (lower intrinsic benefit).
People also seem to value intrinsic incentives more when they are in the middle of pursuing a goal than when they have not yet started. This is why when people are selecting a job, they often put relatively less emphasis on things such as interest in the task and employee morale, compared with extrinsic benefits like salary. But when going to the job each day, people care relatively more about these intrinsic incentives. Thus, tangible incentives should be emphasized in advance, while more intrinsic ones should be used to motivate employees already working toward something.
Just as people fail to recognize the value of intrinsic incentives for themselves, they also underestimate its importance for others. People tend to believe interesting work tasks and morale are more important to them than to their colleagues. As a result, when motivating others, people may choose to use fewer intrinsic incentives than they would for themselves.

How to Fake It When You’re Not Feeling Confident

• By Rebecca Knight in Harvard Bisiness Review

Sometimes you feel like you’re in over your head. Perhaps you got a big promotion or are leading a new, high-profile initiative but you worry that you don’t have the right skills or experience to succeed. Are there strategies you can use to jolt your confidence? How do you “fake it ‘til you make it”? And are there risks to that approach? 

What the Experts Say

Feeling anxious about a new professional challenge is natural. In fact, imposter syndrome — the creeping fear that others will discover you aren’t as smart, capable, or creative as they think you are — is a lot more common than you might guess. Most people feel like a fraud from time to time, and “many of us never completely shed those fears — we work them out as they come,” says Amy J.C. Cuddy, a professor at Harvard Business School and the author of Presence: Bringing Your Boldest Self to Your Biggest Challenges. The key to doing that, she says, is “to trick yourself out of the state of self-doubt.” Faking it ‘til you make it is not about pretending to have skills you don’t, she adds. It’s “about pretending to yourself that you’re confident” so you can work hard and get the job done. So, for starters, “let up [on] the self-flagellation.” Often, the root of the insecurity involves your personal leadership style, says Herminia Ibarra, a professor at INSEAD and the author of Act Like a Leader, Think Like a Leader. Your task is to figure out “how you come across as credible, how you convey your competency to others, and how you communicate your ideas in an authentic way.” Here are some ways to go about it.

Frame it as an opportunity

The more you focus on what’s scary about the new team you’re leading or the project you’re steering, the more intimidated you’ll feel. Instead, “frame the challenge not as a threat but as an opportunity to do something new and different,” says Cuddy. “Don’t think, ‘Oh no, I feel anxious.’ Think, ‘This is exciting.’ That makes it easier to get in there and engage.” Remind yourself that the professional challenge you’ve been asked to take on is probably “not categorically different” from what you’ve done before. “It’s just a little different. [So] you need to scale up.”

Think incrementally

If you approach a new position or responsibility with the goal of “killing it right off the bat, you’re setting yourself up for failure,” says Cuddy. Rather than setting a grandiose objective, she suggests making “small, incremental improvements” in your performance. Think of these steps as “the opposite of a New Year’s resolution,” she says. For instance, you might say to yourself, “In today’s meeting, I’m going to make sure everyone on the team feels heard.” Or, “At this networking session, I am going to make two new connections.” A growing body of research supports this approach, notes Ibarra. “Goals are a moving target,” she says, requiring constant setting and resetting.

Watch and learn

When you’re developing your personal management style, you should observe how others lead, according to Ibarra. One role model will not suffice; “you need a panoply of them,” she says. “It’s helpful to be exposed to many different styles.” Watch how these people influence others, use humor, and come across as charismatic and self-assured. Also take note of their verbal tactics — when they use silence, how they pose questions, and how they intervene. “Pay attention and then try to emulate [what they’re doing],” she says. “You can borrow bits and pieces and tailor them to you.”

Be bold in your body language 

One surefire way to come across as self-confident when you’re feeling insecure is to use “body language that makes you feel bold and victorious,” says Cuddy. Your aim is to make “yourself feel more powerful psychologically.” Take long strides. Sit up straight. Walk with your chest held high. And don’t slouch. When you “carry yourself in a way that conveys power, poise, and healthy pride,” you feel more self-assured and others perceive you that way. “You feel less guarded, more optimistic, more focused on goals, and more likely to take a stand,” she says.

Heed red flags

If you’re so overwhelmed that every day nearly brings on a panic attack, faking it may be inadvisable. The goal is to “step outside of your comfort zone,” Ibarra says, not to set yourself up for failure or a breakdown. Cuddy agrees: “When you are in serious fight-or-flight mode, it’s very hard to get yourself out of it; it’s like a death spiral.” So if you have deep-seated concerns that the challenge you’re being presented with is too much too soon, or is unrealistic given the time frame and resources at your disposal, it’s important to speak up.

Principles to Remember

Do:

Create goals based on making small, incremental improvements in your performance.

Jolt your confidence with bold and expansive body language.

Observe how your role models comport themselves in various professional situations. Seek ways to incorporate their strategies and tactics into your leadership repertoire.

Don’t:

Beat yourself up for feeling like an imposter — feeling nervous about a professional challenge is natural.

Be overly daunted or scared by the challenge at hand. Consider it an opportunity to do something new and different.

Fake confidence if you have legitimate concerns that the challenge you’re being asked to take on is not feasible. If it’s too much, say so.

Case Study #1: Focus on the opportunity and set small, achievable goals

Alex Mohler admits that when he first started as director of client services at Crubiq, a B2B sales company based in Raleigh, North Carolina, he felt like a fish out of water. Most of his prior experience was in the frozen dessert industry. “Crubiq sells to tech and analytics platforms,” he says. “Coming from the ice cream world, I didn’t know a lot about this.”

But he didn’t let his nerves get to him. “I had to be willing to go into the unknown and embrace it,” he says. “I looked at my new job as an opportunity to learn about an exciting, cutting-edge technology, and that was very motivating for me.”

He reminded himself that Crubiq represented a new business for him, and he had a proven track record in sales. He needed to have faith in his abilities. “I was still selling a product and selling a concept to people,” he says.

Alex says he’s learned the importance of sometimes thinking small. At Crubiq he and his team members each make a daily list of three things they want to accomplish. For example, Alex recently took on a new client in an unfamiliar industry, so one of his goals was to spend two hours doing research on the sector. Another of his goals to improve his Excel skills. To accomplish it, he set a goal of completing three sections of Excel Everest, a training program, each week.

“When you’re working on something as daunting and overwhelming as creating a brand and starting a company, it helps to be able to look back at those lists, check off boxes, and have a sense of accomplishment,” Alex says.

Case Study #2: Emulate successful role models and exhibit strong body language

When Radhika Duggal took over as a director in the marketing division at CommonBond, the student lending service based in New York, she “panicked a little.”

Although she had experience leading a team, this felt different. “I was inheriting a team of four people — all of whom had been at CommonBond for some time,” she explains. “They knew the business, whereas I had to learn it.”

To rev her confidence, she reminded herself that she had applicable skills and expertise. Before CommonBond, she had worked at Pfizer and Deloitte. “Because of my time as a consultant, I understood processes and I knew how to get work done,” she says. She also had directly relevant experience from doing social media and email marketing in previous jobs.

She reflected on past bosses and role models who struck her as particularly confident, and then created a working list of the leadership skills she wanted to emulate. “I once worked with a creative, talented manager who knew how to work a room,” she recalls. “But he told me he was not very well organized, he was not a detail person, and that’s where he needed my help.” His candor and willingness to admit his faults were eye-opening to Radhika. She now tries to be as open and honest with her direct reports.

Radhika also understands that her body language has a direct effect on her job performance. She works hard at coming across as authoritative. “I want my presence to be bigger than it is,” she says. “I pay attention to standing up straight, using hand gestures, and using intonation in my voice to engage people. I notice that it has a big impact on the dynamic and energy in the room.

Rebecca Knight is a freelance journalist in Boston and a lecturer at Wesleyan University.  Her work has been published in The New York Times, USA Today, and The Financial Times.