Social Inclusiveness

Innovation policies for social inclusiveness aim to include in innovation activities individuals and groups that are not usually participating in innovation, so as to broaden the group of innovatorsThis toolkit considers the following social groups that often face challenges to participate in research, innovation and entrepreneurship activities:

Read on below to find country-specific information and statistics that could help identify groups that encounter higher obstacles to participate in innovation activities. 

What are the causes of low participation of some groups in innovation activities?

For more details, see section 3.1.1 of the report Making Innovation Benefit All: Policies for Inclusive Innovation.  

What are the main rationales for implementing innovation policies for social inclusiveness?

Reducing discrimination in labour markets

Some inclusive innovation policies address labour market discrimination, which is detrimental to well-being and economic performance. They do so by helping demonstrate the potential of certain social groups and changing the attitudes of employers or investors towards them. They thus create a dynamic whereby: i) recruitment is based on objective, non-discriminatory criteria, thus increasing the chances of recruiting the workers that are best suited for each job; and ii) future investments would be targeted to most efficient activities, regardless of the group undertaking them, thus making those investments more sustainable in the long run.

Discrimination has negative impacts on individuals and economies at large. Individuals suffering discrimination also suffer from lower incomes and poorer health status, stemming from higher psychological distress, lower self-esteem and related mental health problems (Choi et al., 2013; Versey and Curtin, 2016). In turn, firms that discriminate narrow the pool of employees considered in recruitment processes, resulting in lower productivity and profits (Lanning, 2010).

At the aggregate level, discrimination can lead to depressed wages and underemployment for a high share of the discriminated population (Baldwin and Johnson, 1996). That might create a disincentive for these groups to invest in further education and training, as their (average) return on such investments are below that of non-discriminated groups, thus limiting future opportunities for those individuals and aggregate economic growth (Milgrom and Oster, 1987). This is because individuals who are being discriminated against will receive less for the same productivity, qualifications and skills, and would not have the same opportunities in the labour markets due to some identity factor, such as gender, race, age, disability status, or place of residence.

Fostering social mobility and inclusion

Inclusive innovation policies can foster both social mobility and inclusion by integrating disadvantaged groups into more productive activities of the economy, both by: i) enhancing their innovation-related skills; and ii) facilitating their access to opportunities, particularly by addressing specific barriers faced by these groups (e.g. when establishing their own businesses). The successful integration of disadvantaged groups in innovative activities is expected to improve their economic status and general well-being (including in terms of job satisfaction), and increase their chances for upward social mobility. Inter-generational upward social mobility is also expected to have positive effects on economic growth by improving the allocation of talents and abilities in the economy (Galor and Tsiddon, 1997; Causa, Dantan and Johansson, 2009).

Integration of disadvantaged groups into productive activities is also likely to increase their involvement in the social, political and cultural life of society, and to strengthen their sense of belonging to a community. Social cohesion in turn benefits norms and institutional rules leading to less risky co-operation, increased innovation and creativity, and higher participation in civil society. Higher social cohesion can strongly enhance people’s well-being (Eurofound and Bertelsmann Stiftung, 2014) and have positive impacts on the economy (Birdsall, Ross and Sabot, 1995; Easterly, Ritzen and Woolcock, 2006).

In addition, inclusive innovation programmes are ever more relevant as tax and redistributive policies have become less redistributive in many countries: taxes and transfers now lower inequality by about 29% in the sample of 13 OECD countries where long-term data were available, which is less than in the mid-1990s (OECD, 2011). This trend has negatively affected the low-income groups, particularly since the financial crisis. The main reasons for the decline in the redistributive capacity of taxes and transfers are the reduction in benefit generosity, the tightening of eligibility rules, and the failure of transfers to the lowest income group to keep pace with earnings growth (OECD, 2015). In this context, public policies that foster inclusiveness without imposing long-term weight on public budgets, and that increase the chances of effectiveness of public funding become ever more relevant.

Promoting more diverse teams to support inclusion and growth

A number of inclusive innovation policies, by fostering the integration of underrepresented groups in innovation, research and entrepreneurial activities, promote diversity in those activities. This is particularly the case of policies aimed at increasing the participation of women and minority groups in public research activities, such as the Programme to Support Research Activities of Female Researchers in Japan and the Thuthuka programme in South Africa. 

Diversity, both inherent (e.g. race, gender) and acquired (e.g. experience, educational and cultural background), is increasingly considered an asset for firms and research teams. For instance, Freeman and Huang (2015) found that papers written by diverse groups of researchers received more citations and had higher impact than those written by people from the same ethnic group. Diversity may also help boost firms’ innovativeness (Talke, Salomo and Kock, 2011) and may lead to more sales and profits (Herring, 2009; Talke, Salomo and Kock, 2011; Dezsö and Ross, 2012; Credit Suisse, 2012). While there are differences in findings regarding the impacts of different dimensions of diversity, it is generally considered that diversity can lead to more creative thinking and problem solving than would be the case in homogeneous teams.

 
Indicators on Social Inclusiveness

The following indicators may help you identify whether the inclusion of low-income groups or women are social challenges in a given country.

Indicators on income inequality

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Indicators on poverty

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Indicators on gender

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References

Baldwin, M.L. and W.G. Johnson (1996), The employment effects of wage discrimination against black men”, Vol. 49, No. 2, pp. 302-16, http://search.ebscohost.com/login.aspx?direct=true&db=bth&an=9602192668&scope=site.

Birdsall, N., D. Ross and R. Sabot (1995), “Inequality and growth reconsidered: Lessons from East Asia”, The World Bank Economic Review, Vol. 9, No. 3, pp. 477-508.

Causa, O., S. Dantan, and A. Johansson (2009), “Intergenerational social mobility in European OECD countries”, OECD Economics Department Working Papers, No. 709, OECD Publishing, Paris http://dx.doi.org/10.1787/223043801483.

Choi, K-H. et al. (2013), “Experiences of discrimination and their impact on the mental health among African American, Asian and Pacific Islander, and Latino men who have sex with men”, American Journal of Public Health, Vol. 103, No. 5, pp. 868-74, http://dx.doi.org/10. 2105/AJPH.2012.301052.

Credit Suisse (2012), “Gender diversity and corporate performance”, https://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=88EC32A9-83E8-EB92-9D5A40FF69E66808 (accessed 19 January 2017).

Dezsö, C.L. & Ross, D.G. (2012). Does Female Representation in Top Management Improve Firm Performance? A Panel Data Investigation. Strategic Management Journal, 33(9), 1072-1089.

Easterly, W., J. Ritzen and M. Woolcock (2006), “Social cohesion, institutions and growth”, Economics & Politics, Vol. 18, No. 2, pp. 103-20.

Eurofound and the Bertelsmann Stiftung (2014), Social cohesion and well-being in the EU, www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef1472en.pdf (accessed 19 January 2017).

Freeman, R.B. and W. Huang (2015), “Collaborating with people like me: Ethnic co-authorship within the US”, Journal of Labor Economics, Vol. 33(3), No. S1, pp. S289-S318.

Galor, O. and D. Tsiddon (1997), “Technological progress, mobility, and economic growth”, American Economic Review, Vol. 87, No. 3, pp. 363-82.

Herring, C. (2009), “Does diversity pay? Race, gender, and the business case for diversity, American Sociological Review, Vol. 74, No. 2, April, pp. 208-24.

Lanning, J.A. (2010), “Productivity, discrimination, and lost profits during baseball’s integration”, The Journal of Economic History, Vol. 70, No. 4, p. 964, http://search.ebscohost.com/login.aspx?direct=true&db=edsjsr&an=edsjsr.40984785&scope=site.

Milgrom, P. and S. Oster (1987), “Job discrimination, market force, and the invisibility hypothesis”, Quarterly Journal of Economics, Vol. 102, No. 3, pp. 453-76,http://search.ebscohost.com/login.aspx?direct=true&db=bth&an=4624027&scope=site.

OECD (2011), Divided We Stand: Why Inequality Keeps Rising, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264119536-en.

OECD (2015), All on Board: Making Inclusive Growth Happen, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264235120-en.

Talke, K., S. Salomo and A. Kock (2011), “Top management team diversity and strategic innovation orientation: The relationship and consequences for innovativeness and performance”, Journal of Product Innovation Management, Vol. 28, pp. 819-32, http://dx.doi.org/10.1111/j.1540-5885.2011.00851.x. 

Versey, H.S. and N. Curtin (2016), “The differential impact of discrimination on health among Black and White women”, Social Science Research, Vol. 57, pp. 99-115, http://dx.doi.org/10.1016/j.ssresearch.2015.12.012.