Charles Bukowski for example, put it like this: “The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence”. I guess, everybody who deals with confident people, will have an opinion on this phenomena. Only in 1999, the researchers David Dunning and Justin Kruger have described this scientifically in Kruger, J & Dunning, D. (1999), Unskilled and unaware of it: How difficulties in recognizing one's own incompetence lead to inflated self-assessments. Journal of Personality and Social Psychology, Vol 77(6), Dec 1999, 1121-1134.
Basically, they describe two effects, and let me put it a bit into my own words which are scientifically highly inaccurate. First, if you are dumb, then you are also likely to be too dumb to know that you are dumb and you end up confident about your abilities. Just think of the stereotypes of a teenager, a stock trader, a management consultant, or an American Republican President. You know what I mean. In this case there is also no reflection on abilities, which protects the subject from hitting the wall. They tend to go for a "Blitzkrieg" and have the advantage of surprise, without thinking through what made them successful in the first stage and how to sustain it. But not all dumb people are like this. Most of them are lovely, and many of them very lazy and end up as a couch potato. Laziness might be even a protection mechanism for them, without which stupidity would have already extinct itself. The majority might be hanging happily and confident with their smart phone or tablet computer over a pizza box. Only those who are dumb and ambitious become a nuisance. The smartest way to deal with that, is not to compete, but to give them the chance for self destruction in a controlled environment through further encouragement.
The second phenomena described by the Dunning-Kruger Effect, is that very talented and capable people might have the tendency to underestimate their abilities. And while the dumb and confident ones might be a nuisance or economic waste, the talented which do not dare to try something are a real tragedy. They could bring mankind forward, but they don't. Sometimes, they choose not to try, because they compare themselves with the real geniuses of all times. And of course, while they don't try, they don't develop their talent. And the less they do that, the bigger becomes the barrier in their mind. To break this cycle, it does not help to introduce new KPIs (Key Performance Indicators) or talk about ROI (Return on Invest) and "benchmarking". Smart people know very well, what really good means and they also need no target setting by some technocrates. They need just the opposite: encouragement not to think about it.