Does Diversity Drive Economic Development?
Creative Class economic development strategies hold that tolerance is the key to prosperity. Tolerant communities attract talented individuals who, in turn, attract high quality jobs and economic growth. But tolerance is a difficult concept to quantify and it is not easily measured by readily available data. Consequently, most studies have used diversity as a surrogate for tolerance – communities with populations that are diverse in terms of race, ethnicity, religion and life style are presumed to be more tolerant. This study examines the relationship between population diversity and economic prosperity in mid-sized (those with populations 50,000 to 500,000) Canadian urban areas. Diversity is found to be positively correlated with the presence of talented individuals. Communities with higher proportions of knowledge workers and other members of the Creative Class are also found to enjoy higher levels of economic health, but not necessarily faster rates of economic growth. Moreover, the direction of causation is not clear; prosperous communities may attract diverse populations, including highly talented individuals. These findings suggest that diversity might better be viewed as a desirable end in itself, rather than as the key to economic growth.
Keywords: Economic Development, Mid-sized Cities, Canadian Metropolitan Areas, Creative Class
Dr. Gary Sands
Professor of Urban Planning, Dept. of Geography and Urban Planning