Diversity breeds innovation, says Charles Leadbeater
Consider these greats of UK industry. Triumph, the classic car company, which made cars with names like Stag and Spitfire, was founded by Siegfried Bettman, born in Nuremburg in 1862. GEC was founded by two Bavarians. Jacob Schweppes started making his fizzy tonics at a factory in Drury Lane in 1792. Belfast is synonymous with the Harland and Wolff shipyard which was founded by Germans. Thousands of UK weddings are kitted out by Moss Bros, founded by immigrant Isaac Moses and his brother. Britain's creative and cultural industries are a roll call of immigrant talent. Madame Tussauds, one of London's greatest tourist attractions was started by a refugee from the French revolution. Granada was created by Sydney Bernstein, in memory of a holiday in Spain and ITV was shaped by the Wingradsky brothers from Odessa, better known as Leslie and Lew Grade. Even Audrey Hepburn, the epitome of English chic, was Dutch.
Immigration has become the most visceral political issue of our times. Yet it plays a critical role in creating an environment for creativity and innovation in Britain. It provides skills that matter, particularly in science and technology, as the US shows: more than half of the high tech firms founded in Silicon Valley since the 1990s had at least one immigrant founder. The diasporas that immigrant communities create bring global flows of knowledge, ideas and money: Silicon Valley is organically connected to innovation hotspots around the world through immigrant networks.
Diversity feeds innovation because innovation stems from the combination of different ideas. Cirque du Soleil, the Belgian-Canadian circus troupe plays to millions of people each year with a mixture of rock opera and circus. There is nothing new in either rock opera or circus but when they are combined it creates a new form of entertainment.
When a population, a company or a city acquires more diverse ways of seeing problems, identifying opportunities and devising solutions, as a result it can become more innovative. A group of experts who think in the same way may be no better at devising a solution than just one of them. They can often find themselves stuck, unable to think laterally. A group that thinks in diverse ways, in contrast, will address a problem from many angles and so are less likely to get stuck.
A living example of this diversity at work is the City of London, which has been refreshed by waves of foreign talent over many centuries. Ten per cent of the capital that founded the Bank of England in 1694 came from 123 Huguenot merchants. The accounting firm Deloitte was created by the grandson of a French Count who arrived in Hull after fleeing the French revolution. Even the Queen's bank notes are made with paper from a firm in Hampshire created by Henri Portal, another Huguenot refugee.
Immigrant communities provide innovative niche markets—for food and culture—that can eventually spread to the mainstream and that is one reason immigrants have been vital to market driven, services innovation in areas such as culture, retailing, fashion and entertainment. Ice creams are sold from vans playing gaudy music because ice cream was first distributed by Italian immigrants, using teams of boys playing barrel organs.
But diversity counts for little unless different ideas are brought together to cross-pollinate. Diverse groups can be much more difficult to coordinate than homogenous groups. Miscommunication and misunderstanding is more frequent, especially if not everyone is equally fluent in one language.
Diverse groups are innovative when they have shared goals, values, language, processes or identity. When diverse groups lack this glue they do not just fail to innovate they can descend into conflict, undermining the trust that is required for innovation.
The benefits of diversity also take time to work through. Initially, homogenous groups often perform better, especially when more routine tasks and challenges are involved.
None of the immigrant entrepreneurs mentioned in this article would have got through the points-based immigration system currently being introduced by the government. Rather than rely on immigration controls to stem the flow we would do better to focus on how we create the common values and meeting places where ideas can be shared. A diverse society becomes creative at the points where different ideas and cultures mix and mingle. Complete assimilation to a single British identity would undermine precisely what makes immigrants so valuable: their difference. In an economy which will increasingly rely on innovation and creativity we need to make the most of our differences, not eradicate them.
Charles Leadbeater's The Difference Dividend is published by the National Endownment for Science Technology and the Arts where he is a visiting fellow. His new book We Think: mass innovation, not mass production is published by Profile.
Posted 28 March 2008 : Director.co.uk