Where is talent optimized?

Madhav Nandipati writes to me:

Hi Professor Cowen, I’ve been a follower of MR for many years.  I have a question that you may have some insights on: in what industry do you think the professional talent is closest to the best/optimal talent, and why?  Similarly, what industry do you think the professional talent has the furthest gap from the best/optimal talent?
For example, if you consider cooking, the best chefs of Indian cuisine may actually be mothers cooking for their families at home; the professional talent is not as good as it could be.  My guess where the professional talent is closest to optimal is in an industry that:
1) is relatively open (along different demographic dimensions)
2) is somewhat lucrative (to attract people to that industry)
3) uses a filtering mechanism (interviews, grades, etc.) that properly identifies talent
Maybe surgery (and to a lesser extent) acting fit those criteria?

I don’t have a way of using or citing evidence to resolve this question, but here are my intuitions:

Good at finding the best talent:

1. Highly paid professional sports (those who care can play them in high school)

2. Finance and management consulting (lots of people from top schools consider these careers, and we get enough, even if non-elites are somewhat “locked out”)

3. Nerdy tech stuff (so many people are exposed to this at a young age and can be autodidactic)

4. Real estate agents (not as smart as Bill Gates, but as good as they need to be)

In these areas very often performance can be measured fairly readily.

Bad at finding the best talent:

4. Education and teaching and religious leaders

5. Humanities scholars

6. Journalists

In general think about areas where performance is hard to measure, good producers are underpaid, and getting a start requires early social connections and mentoring.  I wonder also if “management” fits into this category.

You could take the separate tack of focusing on women and minorities, and asking in which sectors they are most likely to be unjustly excluded, and also in which sectors further talent might be needed.  (Perhaps they are excluded from some segments of finance, but perhaps also we have enough of that.)  This will mean that swimming and tennis attract the best talent less than many other sports do, because you need to have attended a high school with the proper facilities.  Or try running an art gallery or being a museum curator or writing an etiquette guide.  National politics strikes me as one area where quite a bit of talent is unjustly excluded, both women and minorities, but there are many others, including leadership positions more generally across many different sectors.


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