Impacts of workplace cultural differences on innovation and economic growth in Europe

Cultural differences and innovativeness are multi-faceted social phenomenon with innumerable manifestations. Majority of studies have indicated the positive impact of culture. There are some research findings which concluded that culture has a negative impact mainly due to language barriers of diverse cultural workforce which led to low level of communication, in turn led to low level of innovation. Hence the impact of culture on innovation and economic development is debated. Innovation takes place as an art of exercises routed into cultural view points and attitudes. With European Union struggling economies and financial crises, social integration and human capital mobility are key solutions to create innovation and innovative solutions. This study is, therefore aimed at examining the impacts of workplace cultural differences (in a form of human capital mobility) on innovation and economic growth in Europe. Accordingly, Germany, France, Belgium, and Luxembourg were purposively selected based on the higher number of diversified workforce available in companies located in these countries, in order words human capital mobility. Hence, data was collected using a questionnaire random sample of 392 employees (98 from each country) were selected. Consequently, though small portion of the respondents mentioned the negative impact of cultural diversity, the majority of the respondents and the results of the in-depth interview implied that cultural diversity brings people together and enables them to be creative and enhance their innovative performance. Mobility of skilled human capital is an attribute of culturally diverse workforce in a certain company which enable them to share knowledge and skills which in turn improve their innovative capacity. Therefore, this study concluded that cultural diversity has a significant positive impact on innovation and hence on the economic growth. But the barriers that may be seen at workplace due to cultural differences should be properly managed and prior training sessions to newly employed personnel and a platform where all the employees can get an opportunity to introduce themselves and ease their communication should be arranged.