Friday, 12 June 2009

Guest post: International competitiveness and the New Economy - the role of equality and diversity

Eoin Collins: This paper on International Competitiveness and the New Economy: the Role of Diversity and Equality has been prepared by GLEN as an input into the Economic Strategy for the Dublin City Region being prepared by Dublin City Council. It argues that the importance of diversity and equality in growing the advanced economic sectors critical to Ireland’s economic future means that our equality infrastructure can be viewed as a part of our economic infrastructure and a component of international competitiveness and economic renewal.

A theme consistently highlighted in a broad range of economic development and recovery strategies produced by Government and policy bodies, including the NESC and the ESRI, is that Ireland has moved to a period where competitiveness will be based on the application of knowledge, creativity and a highly skilled, creative and adaptable workforce. To develop the advanced sectors, where skill has become a more central factor of production, a key challenge for policy makers across a whole range of sectors is how to nurture, attract and retain the skills on which these sectors depend.

Supporting diversity and equality, (for example across the grounds of the equality legislation), is an important factor in meeting this challenge. For example, meeting the targets set by government for education at all levels, including lifelong learning, will be diminished if areas of education are considered appropriate for one age group or gender. Equally, creating the educational basis for critical and creative thinking and developing the personal capacity and confidence for life-long learning will be undermined if bullying or harassment on the basis of any diverse quality is tolerated and not addressed.

The economic significance of equality and diversity can be observed across other policy areas also. Many of companies in the advanced sectors of the knowledge economy have strong diversity policies which are considered essential not only for recruitment and retention, but also for creating the conditions under which innovation can thrive. These policies will be undermined if the city or country in which the firms locate is perceived or experienced by diverse workers as hostile or unsafe.

US economist Richard Florida has identified a broader impact of what he describes as ‘tolerance of difference’, namely that tolerance and acceptance of diversity is seen by companies and people as an indicator of an underlying culture and eco-system that is conducive to creativity, a key quality driving new economic sectors. Florida states: “Economic growth in the Creative Economy is driven by 3T’s: Technology, Talent and Tolerance….. But technology and talent have been mainly seen as stocks that accumulate in regions or nations. In reality both technology and talent are flows. The ability to capture these flows requires understanding the third T, tolerance, the openness of a place to new ideas and new people. Places increase their ability to capture these flows by being open to the widest range of people across categories of ethnicity, race, national origin, age, social class and sexual orientation.”

Viewing equality and diversity in social justice terms and as key components of our economic infrastructure is a kind of policy shift, or at least a change in thinking, that has happened in other policy areas. As Professor Frances Ruane, Director of the ESRI, has noted in relation to education:

“The notion that human capital is our key economic factor is now being acknowledged widely. I was on some government committees in the mid 1990s and expenditure on education was still being seen at that time as social expenditure. It was only when the skills shortages came to light some years later that people began to link education to growth and that led to its economic importance being appreciated”.

Eoin Collins is Director of Policy Change with GLEN.


Nat O'Connor said...

I agree with the argument that tolerance can be good for the economy, and the paper provides lots of good examples of this. But I think the argument could have been extended to give more emphasis to what being ‘tolerant’ means in concrete terms.

Obviously, Dublin’s highly visible and well attended Gay Pride Festival is a positive sign for lesbian and gay people that Dublin is an OK place to visit, to do business and to live in. But I think that employers need to be asked to do some very practical things, in order to show whether they are sincere about diversity.

For example, the GLEN paper does mention “recognition of same-sex partners for the purpose of health insurance, pensions and other workplace benefits”. But what other practical steps could be taken?

It would also be useful to know how Dublin rates in this respect. Do many employers extend employee spousal benefits to same-sex partners? How many employers refuse to do so? And what should Dublin City Council be asked to do or to encourage, in the context of its economic development strategy for the city?

SlĂ­ Eile said...

The role of diversity as a potential productive factor is worth considering. Richard Florida's thesis that diversity is good for innovation is good for economic performance has resonance. A little acknowledged fact is the way that relatively poor countries in the 19th Century such as Switzerland benefited not only from a significant immigration of highly skilled human capital but from the way that ethnic and linguistic diversity, among other factors, fostered creativity and development.
The role of various 'intangibles' such as diversity, cultural identity, social cohesion, tolerance and civic engagement is difficult to measure but pervasive and intuitively appealing.