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Impact of Business Cycles and Role of Luck in Career, Business, Politics etc

Part of the study on long term cycles I was doing but just could get around to complete it. Though the basic premise I set out to achieve was kinda confirmed. This, I attempted, when I was doing a bit of research on the role of luck i.e. on factors that we have no control on; like for instance the year of birth. As it is well known, the year of birth has immense impact on a persons life, because, to wit a person is para-dropped in to a middle of a battlefield, and the survivability and prosperity is entirely dependent on the advantages of battle field at the moment.

In many ways, this is just an attempt to study what Malcolm Gladwell has stated about the abnormal concentration of billionaires and successful entrepreneurs within a decade across long time line. What I tried below was to try and attempt the same, to understand -- what are the chances of an Indian to become 1) A successful politician and 2) A successful businessman.

The way I went about this is by taking a random sample set of successful people - about 40 in each set, and looked at their current age. The idea behind this was to understand if there is any concentration of years or duration to which these successful people belong to. Surprisingly a pattern does emerge. 

Of Course, there are flaws in this argument or different perspectives of looking at this problem. For instance, if average age of a politician is say 50 years, it would mean the most of the politician's year of birth would be concentrated around 1962. Similarly, there will be no people born after 1994 in the list because of the age limitations.

The idea is not to identify such above limitations, but to identify the possible opportunities AND study how the broad business cycles (my main theme of study) affects a persons career and success, just as in the battlefield analogy above. 

Presented below are two charts, one for the business leaders and the successful politicians. 


Age year distribution for successful Indian business leaders

Average age year of the Indian politicians

If you see the above charts, it is clear that there is some concentration visible, and as mentioned the ages seem to be somewhere in between highly experienced to retirement, effectively giving us a narrow gap by which most successful people achieve their success. However, that is NOT the point of study but just a digression.

For the clincher, look at the charts below. If you asked why did the younger than 'average' people did not make it to top, here would be the answer. [Edit: One of the answers]


India - Rate of change of non-food credit and food-credit - long historical

In the above chart you will see the Non-food credit sees a sharp jump in late 60s and early 70s. And fortunately, the business cycles seems to be robust enough to hold the growth rates for a rather long length of time - almost two decades. Now, who would be best placed to take advantage of this business growth occurring in this duration? People in the prime, youths entrepreneurial with lots of risk-taking and boldness and adequate experience. If you assume 25-30 years of age as appropriate for such "startups" and entrepreneurial ventures -- and wind back to see who would be 25-30 years of age at that appropriate point in time, it would be the people born during the time as shown in the graph.

This is pretty good empirical evidence that when we are born has some big impact on our lives, probably more than any other thing. That's the role of luck in our life. The randomness into which we are para-dropped and that we will never be able to escape.

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Below are two more graphs that shows the robustness of the 70s economy which laid down good foundations for businesses to succeed. 


iNDIA - Rate of Change growth of Time Deposits and Demand deposits - RBI DataRate of Change of Indian Demand Deposits in historical context - source RBI


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Half baked data, I know and not comprehensive enough too. Hopefully, I will come back some later date to completely study other parameters and other fields of successes. But it is well known, and also glimpsed here, that business cycles play a very important role in how a person's life shapes up.

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