Diversity and its impact on innovation is something that I’ve covered on this blog numerous times in the past. Most of that coverage has revolved around thought diversity rather than identity diversity however, as it’s my belief that it’s the intellectual diversity that matters most when it comes to harvesting fresh ideas and innovations.
A recent study from North Carolina State University set out to explore whether that assumption is correct, or whether identity diversity did actually have an impact upon innovation.
The study suggests that making an organization more diverse can also make it more innovative, whether that innovation is measured in terms of new products, more patents or the influence those patents have (measured by citations).
“We wanted to know whether companies with policies encouraging the promotion and retention of a diverse workforce – in terms of gender, race and sexual orientation – also perform better at developing innovative products and services,” the authors say. “The short answer is that they do.”
The researchers crawled the MSCI ESG STATS dataset, which provides the diversity policies of the 3,000 largest publicly traded companies in the US. They then cross-referenced this with patent data from the US patent office, whilst also collecting data on product announcements from the Capital IQ Key Development database over a fifteen year period.
“Basically, once you get through all the statistical jargon, we found that a company that checks all of the diversity boxes would see about two new additional product announcements over 10 years,” the team explain. “Given that most firms produce an average of two new product announcement per year, that’s significant. On the other hand, it shows that improving diversity policies won’t lead to overnight improvements in innovation. It may take time to reap the benefits.”
So, the message would appear to be that it’s not just thought diversity that matters for innovation, and the more your organization supports diversity on all levels, the better they’re likely to be at innovating.