Public Affairs Networking
Ethnic diversity is good for business

In August, data expert Randy Olson overlaid maps of US counties to see where racial and ethnic diversity was highest. His map showed that high levels of diversity correlated notably with high growth areas. This link between diverse populations and growth and innovation is something civic leaders in the United States and Europe increasingly recognise. More and more leaders from Denmark to Chicago, Barcelona to Berlin are emphasising diversity as central to their growth and innovation objectives, write Kevin Cottrell, Megan Doherty, and Lora Berg.

Al Jazeera English recently identified Houston as newly at the top of their list of the most diverse cities in the United States. In her 2014 State of the City address, Houston Mayor Annise Parker said, “The Houston I know is accepting, tolerant, diverse, understanding, inclusive, open-minded, and unbiased.” She committed to establishing a “Human Rights Ordinance” for the city, and cites the context of a region that in four years has created over 364,000 jobs, exported $470 billion in goods, and in the past two years led the nation in export growth. She assesses the Houston region’s power in international business as due in part to leveraging its diverse ties at home and around the globe.

In California, Los Angeles Mayor Eric Garcetti likewise emphasises the positive in demographic change and global engagement. Recently, he blogged about the resolutions of the US Conference of Mayors that highlighted the need for more international trade agreements and “policy changes that will increase the number of US citizens from the pool of eligible, lawful, permanent residents.” The Chicago Council on Foreign Affairs has also recast immigration reform, with the view that “immigrant integration strengthens regional economies.”

On the other side of the Atlantic, the Council of Europe formed its growing “Intercultural Cities” group in 2008. Its vision statement asserts that there is a net “gain from the entrepreneurship… associated with cultural diversity, provided they adopt policies and practices that facilitate intercultural interaction and inclusion.” Participating leaders benefit from peer reviews, governance, and practice related to diversity, assessing such indicators as commitment, education, neighborhoods, public services, employment, civic life, public spaces, conflict resolution, language, media, international outlook, and welcoming of new arrivals.

In Denmark, Copenhagen has moved up in the index each year, aiming, per its integration plan, to be “the most inclusive city in Europe.” Copenhagen’s immigrant background population almost doubled in the past ten years from 11.5 percent to 22.2 percent. The integration plan reads, “Diversity must be used to create more dynamic development, in order to prepare Copenhagen for globalisation.” This is not to suggest that there is no backlash to rapid change in Denmark, but that there is a clear trend toward greater inclusivity.

Yet while many leaders utilise the power and potential of diversity, more remains to be done to counter exclusionary practices on both sides of the Atlantic that could threaten to undermine recent gains and the underpinnings of civil society and democracy. This requires clarity and direction from heads of government to press forward on inclusion practices and to fight democratic backsliding.

At the same time, non-government actors can also play a role in sharing inclusion and global engagement strategies across the Atlantic. The German Marshall Fund of the United States, for example, facilitates such exchange through its Bilbao Urban Innovation and Leadership Dialogues (BUILD) and its Transatlantic Inclusion Leaders Network. The Maytree Foundation based in Toronto works in both Europe and North America to increase diversity on boards in all sectors of cities through its diversity initiative.

Responding to, and taking advantage of, demographic change has in fact become an imperative for growth. Regions lose ground when they turn their backs on the opportunities of diverse populations. Diversity and inclusion has become a cornerstone of 21st century effective leadership, and new tools — such as gathering and mapping demographic data, and new modes of communication to engage stakeholders, and to network at the global level — are now available. Leaders at all levels have the potential to prepare their constituencies better than ever before to leverage demographic change and increase global engagement — in order to lead rather than be left behind.

Kevin Cottrell is the Director, Megan Doherty is a Transatlantic Fellow, and Lora Berg is a senior fellow of Transatlantic Leadership Initiatives at the German Marshall Fund of the United States. The GMFUS first published this article as part of its Transatlantic Takes series.

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