The secret of economic success is innovation. What, then, is the secret of innovation? A look at the red-hot market for grey cells is revealing. Success seems increasingly dependent not on firms but on the brilliance, creativity, and drive of a small cadre of exceptional individuals – for whom companies and institutions worldwide must compete if they want to lead in such fields as technology, finance, and science.

Across sectors, the rewards for the new superstars are growing, too. Many programmers and recording artists in their 20s now command seven-, eight- or even nine-figure salaries. Similarly, in the legal profession, earnings that were once distributed more evenly among lawyers now increasingly flow to the top ones at elite firms, who massively outperform their counterparts at second-tier firms. The rising premium on talent is due chiefly to recent technologies: vast computing resources help investors transform their skills into greater profits, while ultra-cheap digital distribution expands markets for individual creators. [I] And from a corporate perspective, the potential rewards for winning the race are so enormous that they turn even the most extravagant individual salary into a rounding error.

That technology, especially artificial intelligence (AI), will further extend the dominance of top performers, enabling them to do even better, is a boon to them. But it is also good news for everyone else, because ageing societies will struggle to grow economically unless productivity and innovation remain strong. [II] However, the real irony is that, even as many countries are pouring money into economy-boosting schemes, much of the brainpower essential for national prosperity remains untapped. Despite the world's vast reservoir of talent, too few people are achieving their potential, owing perhaps to financial hardships, limited access to higher education, and the absence of support networks needed to turn promise into performance. When this is the case, the result is a tragic waste of human gifts in both developed and developing countries. [III]

Fortunately, the remedy is well within sight. To attract talent from abroad, countries need to remove the immigration barriers that keep bright students, researchers, and skilled workers out. Domestically, policymakers should be more systematic about supporting talent-spotting programmes and giving those who show early promise the education, funding, and support they need to flourish. [IV]

(Adapted from The Economist)