I think anyone who is ‘successful’ in life (however one defines that word) and is at least mildly thoughtful will have an appreciation of the important role that luck played in them getting where they are. Show me a person who thinks that they achieved their success purely because of their own talent and abilities, and I will show you an arrogant jerk. Where you were born and the circumstances of the family you were born into are two major luck factors but as one grows up, there are so many others such as the friends you happen to make, the teachers you encountered, purely random encounters and events that impinge on your life, and so on. Without much effort I can write down a long list of lucky breaks in my life that have enabled me to be ‘successful’, not in terms of great wealth or fame, but just simply in avoiding disaster or great hardship.
But can that intuitive sense of the importance of luck be pinned down more concretely? Scott Barry Kaufman looks at a study by two Italian physicists Alessandro Pluchino and Andrea Raspisarda and an Italian economist Alessio Biondo. They used a mathematical model and computer simulations and find that we can distinguish between the role of talent and luck. To do that the authors had to define what we mean by talent and they used the reasonable definition that it consists of “whatever set of personal characteristics allow a person to exploit lucky opportunities” and “can include traits such as intelligence, skill, motivation, determination, creative thinking, emotional intelligence, etc.” (I have said elsewhere that the most important quality one can have is to not screw up the lucky breaks that come your way, which is a similar sentiment.) The key conclusion they arrive at is “that more talented people are going to be more likely to get the most ‘bang for their buck’ out of a given opportunity.”
All agents began the simulation with the same level of success (10 “units”). Every 6 months, individuals were exposed to a certain number of lucky events (in green) and a certain amount of unlucky events (in red). Whenever a person encountered an unlucky event, their success was reduced in half, and whenever a person encountered a lucky event, their success doubled proportional to their talent (to reflect the real-world interaction between talent and opportunity).
In the final outcome of the 40-year simulation, while talent was normally distributed, success was not. The 20 most successful individuals held 44% of the total amount of success, while almost half of the population remained under 10 units of success (which was the initial starting condition). This is consistent with real-world data, although there is some suggestion that in the real world, wealth success is even more unevenly distributed, with just eight men owning the same wealth as the poorest half of the world.
Although such an unequal distribution may seem unfair, it might be justifiable if it turned out that the most successful people were indeed the most talented/competent. So what did the simulation find? On the one hand, talent wasn’t irrelevant to success. In general, those with greater talent had a higher probability of increasing their success by exploiting the possibilities offered by luck. Also, the most successful agents were mostly at least average in talent. So talent mattered.
However, talent was definitely not sufficient because the most talented individuals were rarely the most successful. In general, mediocre-but-lucky people were much more successful than more-talented-but-unlucky individuals. The most successful agents tended to be those who were only slightly above average in talent but with a lot of luck in their lives.
As you can see, the highly successful person in green had a series of very lucky events in their life, whereas the least successful person in red (who was even more talented than the other person) had an unbearable number of unlucky events in their life. As the authors note, “even a great talent becomes useless against the fury of misfortune.”
So what could we do to take advantage of this knowledge? Kaufman reviews studies that look at the way that research grants are distributed in science, using that as a model for the general distribution of resources. The typical system tends to give more and larger grants to those people who have already shown some success, the so-called ‘Matthew effect‘. This is in fact the strategy advocated in that awful book The Bell Curve where the authors argue that the people who are successful became so because of their innate intelligence and talent and thus should be given even more resources because it is from them that we will get the most benefit. These new studies argue that that approach is flat-out wrong.
This table reveals the most efficient funding strategies over the 40 year period in descending order of efficiency (i.e., requiring the least amount of funding for the greatest return on the investment). Starting at the bottom of the list, you can see that the least effective funding strategies are those that give a certain percentage of the funding to only the already most successful individuals. The “mixed” strategies that combine giving a certain percentage to the most successful people and equally distributing the rest is a bit more effective, and distributing funds at random is even more efficient. This last finding is intriguing because it is consistent with other research suggesting that in complex social and economic contexts where chance is likely to play a role, strategies that incorporate randomness can perform better than strategies based on the “naively meritocratic” approach.
With that said, the best funding strategy of them all was one where an equal number of funding was distributed to everyone. Distributing funds at a rate of 1 unit every five years resulted in 60% of the most talented individuals having a greater than average level of success, and distributing funds at a rate of 5 units every five years resulted in 100% of the most talented individuals having an impact! This suggests that if a funding agency or government has more money available to distribute, they’d be wise to use that extra money to distribute money to everyone, rather than to only a select few.
Kaufman summarizes the main conclusions.
[S]ince rewards and resources are usually given to those who are already highly rewarded, this often causes a lack of opportunities for those who are most talented (i.e., have the greatest potential to actually benefit from the resources), and it doesn’t take into account the important role of luck, which can emerge spontaneously throughout the creative process. The researchers argue that the following factors are all important in giving people more chances of success: a stimulating environment rich in opportunities, a good education, intensive training, and an efficient strategy for the distribution of funds and resources.
Kaufman’s article is well worth reading.