Don’t tell Malcolm Gladwell you either have talent or not. That perspective is “fundamentally defeatist”, said the author of The Tipping Point and Outliers at the 30th SIM Annual Management Lecture in August 2011.

Hailed as the “pop purveyor of new ideas” by Time magazine, Mr Gladwell believes that, for too long, humans accepted that it is “beyond our ability” to do some things. The real problem is low “human capitalisation” or the rate at which a community capitalises on the human potential of its people, a concept introduced by psychologist James Flynn.

The great modern challenge

Exploiting talent is the great challenge of the modern age, said Mr Gladwell. This is especially relevant to Singapore, whose only natural resource is human capital.

A competitive runner in his youth, he said that a defeatist would see a “scarce thing called running talent held exclusively by the residents of Kenya” and apart from “importing large numbers of Kenyans and interbreeding vigorously with the Singaporean population, there’s no way Singapore can ever field a world-class set of long-distance runners”.

But American marathoner Alberto Salazar found that about a million Kenyan schoolboys run at least 10 miles a day so there is little chance of overlooking any child with running potential. “Their capitalisation rate is probably 100 per cent.” In other countries, great runners are just never discovered.

Poverty trumps genius

Human capitalisation levels are “depressingly” low in developed economies. After World War I, American psychologist Lewis Terman tracked children with IQ of above 140 and found a group who struggled in adulthood. They grew up in homes where parents did not attend college, learning was not prized, or there wasn’t enough money for books.

“Poverty trumps genius,” said Mr Gladwell. Relative income disparity is just as detrimental to human capitalisation as absolute poverty. A widening income gap makes it difficult for those at the bottom to make best use of their talents – even in rich and developed countries.

“The country with the (second) highest rate of inequality (based on the Gini coefficient) in the world is Singapore. It’s a reflection of an extraordinarily economically dynamic place where great fortunes can be made but… if you want to improve productivity for the whole country, you’ll have to think deeply of ways of narrowing gaps between the wealthiest and the poorest citizens.”

Stupidity gets in the way

Mr Gladwell was also blunt on another constraint: the “stupidity” of systems with no logic. As highlighted in Outliers, most professional hockey players in the US and Canada are born in the first quarter of the year as the cut-off age for selection is on January 1.

Each year, children are picked to be groomed as Olympians or professionals. But the eldest, not the best, are often chosen. “At six and seven, the difference in a child born in January and December is enormous,” he said, “One could be three inches taller or 15 pounds heavier.”

The same happens for IQ testing. Again, the intellectual abilities of children born in January and in December can differ enormously at a young age. A recent University College London study showed that teens had IQ scores that rose or fell by as many as 21 points over the years, indicating that IQ levels could change, and someone “average” could become “gifted”, vice versa.

IQ is not everything

Relying on IQ tests is not enough in capitalising on human potential. A study of an elite New York school found that in 38 years, most of the students with IQ of 145 and above did “very little” eventually. They won no Nobel prizes, were not extraordinary entrepreneurs, nor made a mark on society.

Any system selecting only for IQ would leave a lot of talent on the table. There is a “dangerous tendency”, in Singapore and the US, to be overly selective in education.

“We’ve carried the idea of elite education about as far as it can go and I think it’s time to back off a little and wonder about what we’ve lost, what kind of costs there are.”

Finding the “with-it-ness”

In selecting teachers, countries have focused on raising their academic standards and training them more rigorously. But when American researcher Jacob Kounin looked at how great teachers kept classrooms disciplined, what mattered was the sense of “with-it-ness”, a teacher’s way of communicating that “I know what’s going on” through body language.

“How do you get ‘with-it-ness’?” asked Mr Gladwell. “Nobody knows. The only way to find out is to put [teachers] in a classroom and see.”

So American education reformists are proposing a system: “If you have a BA from an accredited college and if you have a pulse, you can teach”.

If teachers do well, they are retained after three years; if not, they will be let go. This would be messy and require lots of time and money, as it cycles thousands through the profession to find the best teachers. But it is a way to open up the process to make best use of talent, said Mr Gladwell.

And while the rates of human capitalisation are now “absurdly” low, there is cause for optimism as scarcity of talent is not something to live with, but something “we can do something about”.