The Wealth of Nations: A Cross Country Analysis of Entrepreneurial Abilities, Innovation in STEM and Competitiveness in Education

Abstract
Some economists argue that governments and firms must become more competitive vis-�-vis their trade partners in the world economy to boost their economic growth. Yet, to boost competitiveness, it must be addressed the issue of how to foster cognitive ability in the overall population. A large body of literature has shown that it is the cognitive elite, those individuals at the far right side of the Bell Curve that most contribute to the positive relationship between cognitive ability and economic wealth. Despite this vast evidence, gifted and talented children are still lost in the standardized public education system path. They are not identified, diagnosed appropriately, or provided with the special education programs they require so their intellectual potential can flourish. The purpose of this empirical study is to test the association between high cognitive ability and economic wealth when mediated with three other variables: entrepreneurial abilities, competitiveness in education, and innovation in science, technology, engineering and mathematics. The empirical method employed is structural equation modeling. Findings suggest that among the three mediating variables, it is the entrepreneurship variable that plays a major role in explaining the relationship analyzed. Countries with a greater proportion of children scoring at or beyond 115 IQ points, explain more of the variance in the two models tested. Governments and firms that are interested in becoming more competitive in the world economy should act promptly by investing in special education programs for gifted and talented children.