This word — meaning the ability to make unexpected and fortunate discoveries — has been around for more than two centuries, but only really began to be used much in the twentieth century, to the extent that the adjective serendipitous is not recorded before the middle 1940s:
Did I ever tell you of Big Ken’s love of new and unusual words. When he finds one he can add to his vocabulary he is always delighted. Searching for a misplaced bill the other clay I came across his definition of serendipitious. Don't you love that, or is it already yours? I had never heard or seen it before. Serendipity means the gift of finding valuable or agreeable things not sought for. Columbus’ discovery of America was a serendipitous one, as was Nobel's discovery of dynamite.
Chicago Daily Herald, 9 Feb. 1945.
Horace Walpole coined it in a letter he wrote to his long-time diplomat friend Horace Mann in 1754. He told him that he invented it in reference to the title of an old Persian fairy story The Three Princes of Serendip, whose heroes regularly discovered pleasant things that they weren’t searching for. But I’m told that if you read the story you will find that the princes were actually well educated and intelligent men. Their good fortune (which was a bit slap-dash: they got thrown in jail as suspected camel thieves at one point) was based on careful deduction, not chance. As the saying has it, “fortune favours the prepared mind”, just as discoveries today that are said to be serendipitous are so often the result of experience and good observation.
The three princes came from a country the Persians called Sarandib but which we now know as Sri Lanka, or in earlier times Ceylon. The Persian is a corruption of the Sanskrit Sinhaladvipa, “the island where lions dwell”, hence the name Sinhala or Sinhalese for the most commonly spoken Sri Lankan language.