"Such an approach, at that time, would have meant risk taking," Smith writes. Apparently the very nature of bureaucracy tends to reject risk-taking, Smith explains. Still, in time, many of the suggestions from the 1970s have been implemented in the subsequent years. Why does diversity affect innovation? According to Smith, diversity affects innovation because it affects "technical, organizational and institutional learning and contributes to the knowledge base of the economy" (Smith). Technical diversity suggests that because a variety of products and technologies exist and in turn they represent differing kinds of knowledge. Without that knowledge part of the economy's knowledge base disappears along with technical options. "Diversity generates novelty and affects the learning capability of the economy" (Smith).

An article in the International Journal of Business Strategy (Bouncken, et al., 2008) states that companies wishing to "increase their innovations on international markets" can and do bring in "cross-cultural innovation teams" to facilitate needed innovations. Within those teams the challenges includes the possible negative attitudes some members may have towards cultural diversity....

Culture is more than nationality, the authors explain. Cultural "heterogeneity" has an impact on team performance more than "ethnical (or demographical) diversity" (Bouncken). The authors surveyed 19 cross-cultural innovation teams (each team with at least two different nationalities) in the food and cosmetics industries. The companies that were researched were chosen because they were pursuing "radical innovations" and the point was to survey the cultural diversity within the cross-cultural teams in search of answers as to why they had success or failure in their innovations.
At the conclusion of this scholarly article, the research shows that positive attitudes towards cultural diversity "increase project and innovation performance" (Bouncken).

Works Cited

Bouncken, Ricarda B., Ratzmann, Martin, and Winkler, Viviane a. 2008. Cross-Cultural

Innovation teams: Effects of Four types of Attitudes Towards Diversity. International Journal of Business Strategy 8 (2): 26-37.

Dalton, Catherine M. 2006. The Face of Diversity is More than Skin Deep.

Smith, Janet. 1999. Equality, Innovation and Diversity. European Journal of Education…