Diversity and City innovation
Innovation is the foundation of long-term development of a nation. The central role played by innovation accords it a central role in the policy and planning of any economy. Duranton and Puga (1456) posit that diversity witnessed in the urban centers is a major source of innovative activity. Emerging studies postulate that cultural diversity increases the chances of a city being creative. The knowledge drawn from the numerous cultures in the cities is a major impetus for new and multipronged thinking approaches. The linkages established in the culturally diverse cities act as appealing factors for the innovative people. This paper seeks to amplify the scope of the research to include the entire town as opposed to the theoretical studies, which restrict their focus to the firms. The paper will centers in London as an acutely cosmopolitan city. The focus of the paper will be on how the cultural diversity assists London companies in the innovation process.
Diversity is the difference in opinion practices and norms that is displayed in a particular section of the society. In essence, diversity means differences that are evident among a certain group of people. It is easy to not the variety since it just calls for the comparison of the different groups of people in the society. However, cultural diversity ‘s hard to identify in the community since there are various groups of people that practice different things. The practices of the population do not necessarily define the precepts of the cultural diversity since for a practice to be an edict of diversity, there is a need for widespread application. Therefore, for the basis of this research, the bounds of the definition of cultural diversity will be constrained to ethnicity and nationality of the innovators.
Diversity is an asset to any organization and a city at large since it brings different approaches to the brainstorming process. According to past studies, teams made of culturally diverse members often have better approaches to the problems. There is less constraint or imposition of a certain way of thinking about the various organizations. Cultural diversity is specifically crucial in teams operating in knowledge-intensive environments. Diasporic linkages created by the minorities are often useful in the development of innovative approaches and subsequent commercialization of an innovation.
Diasporic linkages are the connections that the immigrants have to their homeland. In most of the nations where the majority of the immigrants in London come from, a close-knit community benefits from their connections. Sustenance of the relationships is vital for the immigrants and the communities in the nations of origin since they are sources of social capital. Therefore, the diverse immigrants can innovate with the help of the social connections. Therefore, the higher the diversity in the city the greater the tendency of innovation.
The common perception is that entrepreneurs of diverse backgrounds are important players in the outlook of the urban change. The fact that the urban innovators are not influenced by the local and dominant culture makes them more open to new ways of doing things compared to the indigenous business owners. The open-minded approach widely applied by the diversified entrepreneurs makes them highly innovative. The diversified entrepreneurs also have a unique opportunity for the development of international markets. The fact that they are successful and from a certain region qualify them into automatic intermediaries for the businesses in their local countries. Contributions of the innovative entrepreneurs of diversified origins automatically affect the innovation of the city from where they operate. Their international linkages create the possibility of production of hybrid products such that their market expand to the rest of the world.
Safeguard diversity is necessary. According to this view, diversity lures human capital, vitalize innovation and guarantee variety of groups to justice and equal access. Strengthening diversity in the society will help in attaining economic achievement.
Cities are not endlessly inventive, however, and innovation degree are not uniform or evenly spread over space and time. Even if most of the economically significant institutional and technological adjustment have been established and developed in town -like region, this does not imply that all towns are creative. Cities singly are innovative spaces, but not every city is inventive. Most cities are at no time noted for being creative. There has to be an integration of a particular feature at specific times for cities innovation to be fierce. The failure of dissimilar cities to expand, maintain development and innovation may result from hurdles in complementing technology with institutional dispositions and supply side factors with demand side factors.
Innovation is highly concentrated in the areas of spatial concentration as opposed to the other parts that may have dispersed population. Therefore, the urban cities such as London play a central duty in the innovation of the entire nation. This means that the spatial concentration is a primary source of spillover of knowledge, composition of knowledge according to sectors and a large pool of skilled labor to drive the production process. The economic diversity and prosperity normally witnessed in the cities is determined by the level of diversity that fosters in the cities. Most of the research focuses on the economic diversity. However, there are various pointers to the role of cultural diversity in the fostering of innovation in the urban area. The evidence supporting the role of the cultural diversity is inconclusive.
Innovation is turning to be the coin of the land. In past years, an increasing figure of economists have come to comprehend that it is not so much the accretion of extra capital that is the vital to improving the standards of living, rather it is innovation.
Innovations befall when persons with high degrees of existing innovation or knowledge make advanced and novel integration of this knowledge with a new perception observed through spillovers. Individuals need a high level of expertise to engage in novelty. An extensive and advanced knowledge of the initial duties will provide ideas into how to make “new combinations” when new thoughts arise through spillovers. Evidently, if one has an external knowledge of the initial tasks, it will be less obvious how to create captivating departures from that work or significant additions.
Innovation empowers the creation of new firms. This unstable, dynamic procedure of steady churn and turnover is a significant source of renewal and growth. There are considerable turbulence and volatility in the industries, reflecting the howl of creative destruction that inevitably accompanies disruptive innovation
In addition, entrepreneurial firms give substantial spillovers that influence regional employment growth rates of all companies in the region in the long run. This role of innovation as a significant growth factor is different from the historical version where containing costs was so necessary. Today, places can no longer bank solely on old economy strategies of reducing costs and providing incentives to draw locationally- mobile commodity based branch plants or offices.
Diversity and innovation is operational inside the organizations since it is possible for one to identify the relationship between the variety of the group and the innovative levels. The innovation activities are higher in the firms that have diaspora effects. However, the detriments of the diversity in the organizational context may eventually defeat the increased gains of innovation such that there will be no chance of commercializing the innovation. Demerits of diversity also affect the rate at which the generation of the ideas takes place. This means that the reception of the people of the idea is the key to the development of an innovative environment. For instance, the people that come from the areas that are composed of the diverse communities often have ease accepting their contributions. They are able to focus on the innovation as opposed to focusing on the person generating the idea. The unbiased attention is drawn from the society. The cosmopolitan psyche of the city of London has led to the acceptance of the diverse members of the community. Therefore, the different nature of the urban environment is the primary source of the amplification of the innovation activity. The home market effects and interaction of the population also contribute to the elaboration of the innovative activities. The ethnic entrepreneurs play vital enabling roles in the diversified firms and cities.
Diversity also affects the teams that are used in the innovative process. Homogeneous teams are always taunted to be more efficient. However, this perception may be flawed since the diverse groups have different cognitive attitudes and perspectives that are often absent in the homogenous units. Homogeneous teams mostly use the mindset of the most outspoken leader since there is little that each of the members of the teams brings. Effectively, the diverse teams bring on different cognitive perspectives. Cognitive diversity is dependent on the cultural background of the person. Therefore, the cultural diversity in the group or ay functional unit in the organization is an equivalent to the cognitive diversity (Wadhwa et al. 67). Diversity may be detrimental to the organization since there are various barriers that come with it. One of the main barriers that are of particular importance in the innovation process is the lack of trust. The dominant groups in the cities may lack confidence in the products sold by the minority groups since they assume that they are inferior (Saxenian 45). It is until when the team understands how to communicate when they are capable of developing. The lack of trust and breakdowns in the communication process leads to difficulties in the resource allocation, implementation of the idea and the generation of ideas. However, the benefits of the cultural diversity largely outstrip the demerits of diversity.
Cultural diversity of a city leads to the development of new demand for products that were previously less required or not requested at all. Diversity in the town of London has resulted in the development of business openings that are both unique and feasible. For example, the city has been benefiting from the financial services that it renders. The traditional approaches towards finance have been applied for a long time such that they seemed permanent. However, this is not the case (Saxenian 45). There is an ever-increasing want for the financial sector in the city to accommodate new approaches that were traditionally nonexistent. The fiscal sector has been forced to make changes and come up with innovative Islamic banking products. In order for the sector to accurate the changes, it sought the input of the innovators from the Islamic faith to provide guidance. Therefore, diversity has led to the development of other forms of businesses that are specifically tailored to meet the needs of the diverse market base.
Cultural diversity fosters innovation by leveraging on the social capital that the diaspora has with the people in their mother country. The social capital makes it easier for the external innovators to establish linkages in either side of the value chain. The social capital make it easier for the diaspora to implement changes in the supply chain and revamp the production system such that they are more competitive than the locally based firms that have a traditional approach to things. The cost of communication is significantly reduced between people or a culturally diverse group by the virtue of trust and mutual understanding that exists among them (Desrochers, 59). The Diasporas are important in the development of an innovative city in all aspects.
However, firms built by the diversified innovators are more open to discrimination. They often have to prove their capacity to deliver compared to the locally based firms. This phenomenon is evident in homogeneous communities. As a result, the contribution of the Diasporas in innovation is highly overshadowed by the local people (Doherty, 62). However, the change of policy in London in order to facilitate the movement of immigrant communities has led to the development of innovations. Some of the innovations arise from the need for the development of product offerings that meet the needs of the immigrants. The impetus, that they bring inform of cognitive diversity has furthered the innovations in the city. The ability of the public management to come up with an accommodative approach to diversity is an important determinant of how well the society will innovate. The London example is indicative of the gains that can be made from the accommodation of diversity. The city has witnessed rapid innovation since the change of policy in 2005 to accommodate the immigrants. Majority of the innovations made by the changes are directly or indirectly attributed to the immigrant community.
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