GSB’s Management Expert Examines Diversity and Economic Growth in Cities

BRISTOL, R.I. – Many consider Boston and Providence to be hubs of diversity. But how about Pawtucket, R.I., or New Bedford, M.A.? When all four made the top 100 listing of America’s most diverse cities in a recent study, RWU’s Professor of Management Susan Bosco was tapped to share her expert insight into topics on living and working in diverse cities, how diversity shapes economic growth and much more in “2016’s Most Diverse Cities in America.”

From among 313 of the largest cities, WalletHub – a personal finance website – ranked each urban locale with an overall score in household, social class, ethno-racial and economic diversity. Read an excerpt below of Bosco’s interview with WalletHub, and then click here to see where the metropolitan areas of Rhode Island, Massachusetts and Connecticut rank against a megalopolis like New York City and Los Angeles.

WalletHub: What are the pros and cons of living and working in a diverse city? 

Susan Bosco: The pros of living in a diverse city are that you have access to people with a variety of backgrounds, perspectives and experiences. This variety enables one to get a glimpse of the behaviors and values that are practiced outside of one's own limited experience. It is not only interesting, but helpful to gain these perspectives as we are all living in a much broader world. In addition, our experiences and knowledge of other societies becomes more complex and reflective of the world. 

On the challenging side, one is now forced to accommodate to the language limitations of others as well as their different behaviors. One may find that the mass transit commute, for example, is delayed as those who are not familiar with these systems try to learn them. 

One is also confronted in a very real way with beliefs that may differ from those we hold. It can be hard to make oneself open to hearing others' opinions without judging too quickly. Human nature is such that we tend to be more comfortable with people we perceive to be like ourselves. So being with people who are different can be stressful just for that reason. 

WH: Is there a relationship between diversity and economic growth in cities? 

SB: If seems that in areas of urban revitalization, small businesses appear, some of which will be successful. When cities are abandoned by their "traditional" populations, these places do decline in economic activity as that majority population is no longer living there and spending their incomes. 

Once these cities are able to welcome and support new populations who feel comfortable in a more heterogeneous environment, they become hubs for new economic activity generated by this different influx of people. 

WH: What can local policy makers do to harness the diversity in their cities to spur innovation? 

SB: Creating enterprise zones with benefits in taxation, for example, have been successful in promoting innovation in many urban areas, particularly smaller ones. There is also a need to support programs that will help innovators to learn the basics of beginning and operating a business in the U.S. It can be very challenging to try to not only start a business, but to try to learn the navigation needed to meet the standards legally and economically. Finally, a review of zoning for such areas may be in order as well. 

WH: Which types of diversity are good or bad for cities? 

SB: I can't really think of a situation which is bad for cities in this regard. As long as there is a mix of people who have some sense of community and social support, it seems like it would be a positive phenomenon in any case.