Why Our Brightest Kids Fail to Reach Their Potential

The Equality of Opportunity Project examines how young people become inventors — and how some miss out.

'Lost Einsteins’ and How to Spark Equality of Innovation

Success is complex, and everyone decides their own definition of it. Yet when we want to know how someone arrived at success, we often look back at where they came from.

Where did they grow up? Was their family rich, poor, or in the middle? Do they have siblings? Did their parents stay together? What kind of school did they attend? Do they have children? Single, married, divorced? Rich or poor? Smart or lucky? What was their access to innovation at a young age?

That last question actually came from a recent study by the Equality of Opportunity Project on what kinds of factors might lead young people to become inventors — a profession that can have profound implications on the world and an industry that is often a measure of economic progress.

We dug through the report for you to find its most interesting findings. Let's dive in...

Missing the 'Lost Einsteins'

Low-income women, minorities, and children are just as capable of making “high-impact discoveries” as anyone else, but they are typically not exposed to innovation enough at a young age and thus become what the study authors dubbed “lost Einsteins.”

The study is notable in that it examined 1.2 million inventors in the United States through a new database linking patent records with the holders’ tax and school district records. An inventor is defined as someone who has filed a patent. The database is anonymous, or de-identified, so the information can be used for research.

The results, while being specific to inventors, nonetheless echo many of the nation’s societal structures that favor one part of the demographic over another. To prevent this trend from continuing and instead spur innovation, government policy should focus less on traditional tax-reducing proposals and instead on increasing exposure to innovation for low-income women, minorities, and children.

Who’s Behind the Study?

The Equality of Opportunity Project has been studying upward mobility for several years. Its team comprises of economists from Stanford, Brown, Berkeley, Harvard, and other universities, along with Ph.D candidates and fellows. Funding comes partly from Stanford and Harvard, the federal government, and philanthropic arms such as Robert Wood Johnson Foundation and Bill and Melinda Gates Foundation.

The group’s research suggests that growing up in the “good” parts of town will lead to better outcomes down the road. This latest study is part of their ongoing research, which aims to find new ways of ending the cycle of poverty in America by zeroing in on big data subsets.

As noted in the research, not all patents are meaningful new inventions (a measure determined by future citations of the work). The results of the study, however, were similar even when focused on inventors whose patents have the most scientific impact.

Reasons for Research

Children born in the U.S. since the 1940s have been earning less and less than their parents, with the figure currently resting at around 50 percent for those born in the ‘80s.

Does this lack of upward income mobility signal the end of the “American Dream”? Perhaps, although the dream can be rescued. The Equality of Opportunity Project has developed various approaches for reversing this trend.

In terms of inventors, we as a nation put such a premium on “innovation” and view it as the impetus for growing the economy.

Fostering Innovation

class — Government policies have invested in STEM education (science, technology, engineering, and mathematics) initiatives.

Government policies focus on reducing taxes for innovation companies and pumping money into STEM education (science, technology, engineering, and mathematics) in a blind attempt to motivate youngsters.

Have these policies worked? It’s hard to say definitively because we don’t know if any such policies led to more people becoming inventors. But there are other ways of figuring out why people become inventors, and that’s where this latest study comes in.

By examining America’s most successful innovators, the study hoped to discover how their life experiences motivated them to become inventors and what society as a whole can learn from these experiences to stimulate innovation in the future.

Disparities in Innovation Rates

The most likely children to become inventors are those whose parents are among the top 1 percent of the country’s income distribution. In fact, it’s a 10-to-1 clip over kids from below median income families.

Race and gender gaps are also wide. It’s three times less likely for a black child to become an inventor than a white kid, and female inventors account for a mere 18 percent of the profession. The study did find the gender is shrinking, albeit at a rate that would take 118 years to find equilibrium.

A Strong Economic Force

America’s rate of innovation would be four times greater than it is now if the industry was not so skewed. In fact, all it would take is for low-income women, minorities, and children to invent at the same rate as white men from top-earning families. Of course, moving mountains takes the will of many.

Still, the study’s suggestions are quite straightforward: develop policies that even the playing field when it comes to exposure to innovation. This will harness the underutilized talent that languishes due to forces largely out of their control, reducing disparities while also spurring economic growth and greater innovation.

Mentoring programs and internships are two suggestions from the study, along with utilizing social networks to increase exposure. And emphasizing participants backgrounds — such as girls learning from female inventors rather than males ones — will also help.

“Our analysis does not tell us which programs are most effective, but it does provide some guidance on how they should be targeted,” the study says. “Targeting exposure programs to children from under-represented groups who excel in math and science at early ages is likely to maximize their impacts.”

Gender and Role Model Gaps

play — "If girls were as exposed to female inventors as boys are to male inventors, the gender gap in innovation would fall by half," the study found.

Exposure to innovation is also gender-specific in that women raised in a region with many female inventors are more likely to patent in the same field as those women. Boys are also influenced by male inventors in the same way. However, being exposed to innovation created by the opposite gender had no impact on later life decisions.

As for neighborhood quality, the effects of exposure were largely the result of mechanisms like mentoring, transmission of information, and networks. So for low-income children, minorities, and women, less neighborhood exposure means much lower rates of innovation.

The study estimates “that if girls were as exposed to female inventors as boys are to male inventors, the gender gap in innovation would fall by half.”

Misguided Incentives

The final major lesson from the study focuses on the financial incentives given to inventors, suggesting that they have no real impact on innovation. The incentives benefit a small number of people who would likely be inventors with or without the perks. (It also points out that its predictions are untested and tax breaks might fuel economic growth if applied in other ways.)

Most inventors make a comfortable living at $256,000 annually on average by their mid-40s. But the ones the study calls “star inventors” — those whose patents are the most widely cited and have the greatest impact on scientific progress — are handsomely compensated, earning on average more than $1 million a year.

These creative minds matter the most to economic growth, and they are likely also the ones most drawn to the work and therefore would not care if the lack of financial incentives meant they earned $95,000 a year versus $1 million.

Underrepresentation Among Inventors

Financial incentives also won’t change the fact that low-income women, minorities, and children “are as underrepresented among star inventors as they are among inventors as a whole.”

“Given our finding that innovation ability does not vary substantially across these groups, this result implies there are many ‘lost Einsteins’ — people who would have had high-impact inventions had they become inventors — among the under-represented groups,” the study says.

Third Grade Math Scores and Economic Inequality

Researchers looked at test scores in early childhood to see if those figures could explain the disparities.

Top performers in third-grade math classes were likely to become inventors only if their families were wealthy. On the flip side, it was highly unlikely that those same high-scoring kids from low-income or minority families would become inventors.

“[B]ecoming an inventor relies upon two things in America: excelling in math and science and having a rich family,” the study says.

Interestingly, as the children aged the gap in test scores widened. Half of the innovation gap by income in the eighth grade could be explained by lower test scores. The study found low-income children steadily falling behind their wealthier classmates as they got older. Researchers looked for causes for this by analyzing different school and childhood environments.

Reactions to Research

Much reaction to the study focused on its release amid a controversial tax bill passed by Congress.

David Leonhardt, a New York Times columnist, called the findings disturbing. He lamented the fact that Congress’s recent tax legislation would make America’s growing inequality worse.

He called the Equality of Opportunity Project "the most important research effort in economics today."

Looking Forward

Writing for BloombergView, Noah Smith argues that nurture is as important to success as nature. And nurture should come in many forms, because knowledge is attained and not born into everyone.

The problem is most Americans find it taboo to talk about the disparities of society from a platform of good education, social influence, and role models being more important than natural ability.

Lessons Taken

And in the Harvard Business Review, Walter Frick points out that tax incentives might help attract existing inventors to a certain industry or region, but they are unlikely to create new innovators.

Citing the recent tax law in Congress, Frick writes that if the ultimate “effect of the tax bill on America’s long-term prospects depends on how it affects innovation, that in turn will depend not just on the tax incentives it offers to innovators but also on the social programs the U.S. chooses not to fund as a result.”

Last Word from Raj Chetty

As a way to combat such a scenario, Raj Chetty, a Stanford professor and a director of the Equality of Opportunity Project, told Leonhardt that one of the most striking patterns of the study was the career paths of children who are exposed to certain types of inventors.

It doesn’t matter the race, gender, or income level — if kids grow up around a certain type of inventor, they are likely to follow those footsteps. Despite the difficulty of creating such scenarios on a large scale, it’s worth trying.

“[Y]ou have systematic programs to connect them with people from similar backgrounds who become mentors,” Chetty told NPR’s Marketplace. “I think you really need a role model that you can see yourself in that person's shoes. That's the type of program I think could be effective here if done at scale.”