The question taps into the cost of education as well as the types of skills that employers and others see as valuable. Nobel Prize quality research suggests it’s not only top grades from a top university that matter.
Would you invest in future success?
The NFL player Arian Foster received a lot of press in the recent years, when the brokerage firm Fantex offered fans a chance to buy a stake in his career. Fantex offered Foster $10million in return for 20% of his future earnings and the ability to offer shares in the athlete’s brand. If his career took off, investors would reap the fruits of his success. If his career bombed, the investment would be a spectacular waste of money. The “Foster IPO” was planned for 2013 but ended up being delayed due to the player getting injured.
The business model is not unique however – Californian lending company Upstart, profiled in Time magazine last year, offered university students a lump sum of cash in return for a percentage of their future income (although they’ve since changed their policy to more traditional loans).
Are they “low risk”?
The key question for any investor scrutinizing the NFL player or university graduate is “will this person pay me back?”.To answer that we need to return to the question at the top of the page – which of your friends would you invest in? Perhaps you didn’t choose the person with the best grades or the highest intelligence in the sense of memorising facts and writing essays. If so, you intuitively understand the importance of non-cognitive skills.
Non-cognitive skills, also called personality skills or soft skills, are considered distinct from ”hard” skills like fluency in another language, being able to read and write at a high level or having programming knowledge.They include things like self-confidence, self-control, emotional regulation, grit, motivation and leadership. These are all traits which aren’t necessarily measured by grades but which are nonetheless hugely important for career success - a survey of 3,000 US employers found that they ranked ”attitude” and ”communication skills” as more important than ”academic achievement” when making hiring decisions.
The Nobel Prize recipient says…
One advocate of the value of non-cognitive skills is the economist James Heckman, winner of the Nobel Prize in Economics in 2000. Heckman describes on his website the results of the Perry preschool project, which took place in Michigan in the 1960s.This programme was designed to improve the IQ scores of a group of disadvantaged children by providing them with daily preschool. Although this intervention did initially raise their IQ, by age 8 the children’s IQ scores were the same as their peers outside the programme. But as the preschool children grew into adults, they seemed to be on a very different path to the children outside the programme - they earned more, did better in school and were much less likely to be involved in crime.
Although the programme failed at its intended goal of improving long-term IQ scores, it had equipped the children with the non-cognitive skills needed to succeed in life. Based on this result, and others like it, Heckman has argued that society needs to pay much more attention to fostering non-cognitive skills.
We can all help our chances of success
We can see the importance of non-cognitive skills when considering the examples of the NFL player and the student. Physical abilities like strength and speed are important for professional athletes, but so are personality skills like mental strength and perseverance – take the former Manchester United captain Roy Keane, who wasn’t particularly strong or fast but did possess exceptional leadership skills. Similarly,intelligence is important for a young entrepreneur, but so is motivation and networking skills.
Ultimately, we live in a world where people pay attention to the measurable. It’s easy to check the national GDP, but not the national well-being - so it’s the former that gets all the headlines. It’s easy to check an employee’s university grades, but harder to put a number on how their personality makes their co-workers happier and more productive. The literature on non-cognitive skills has begun to provide the evidence base to take these concepts more seriously, and to provide the tools to measure them.
By thinking about these traits as real, learnable skills that we can improve on, we can all help our chances of success in life.