Populism is Bad for Business

As intolerance takes the stage, from Paris to Washington, countries such as Canada can claim a diversity dividend

April 24, 2017
An unidentified French far-right National Front party demonstrator holds an anti-immigration sign (AP Photo/Antonio Calanni)

Over the past year, we have all witnessed the politics of fear, division, and uncertainty rise to unprecedented prominence, and take root in governments around the world. Donald Trump`s America and various slivers of Europe, provide prime examples of this trend, and it’s a dangerous draw for populations once captivated with a different type of politics that promised inclusion, diversity and pluralism.

With the unsurprising results of the first round of French election confirmed – Marine Le Pen made it through to the final phase of voting – we can expect more nations to turn inwards and shut their doors to immigration and free trade. It should not be overlooked, however, that this offers an opportunity for countries with a commitment to openness: Maximizing the diversity dividend.

Canada has arrived at one of the most opportune moments to make the economic case for how diversity pays dividends, and simply put, it can and should do so. Diversity is part of the Canadian story and research shows workplace diversity is good for business. Diverse hiring expands the talent pool, fosters creativity and innovation, generates new products and services, and opens up markets abroad. Diversity can be Canada’s global advantage, but only if it is fully embraced and leveraged.

Despite the hard evidence that exists in favour of diversity, public attitudes and perceptions are elsewhere, and more affixed on the abhorrent acts of xenophobia and exclusion that unfold daily. The Trump administration’s deportation of DREAMers, building of walls, refusal of refugees and revocation of visas moves everyday Americans further and further away from ever observing the possible advantages of diversity and pluralism.

The European project so successful in breaking down barriers and generating prosperity is now crumbling. European politicians play on fears and regularly dismiss the value of immigrants to society and the economy, in effect missing out on economic opportunities and the diversity dividend. A strong showing for Ms. Le Pen in the first round of the French election undermines the very principles on which the EU was founded.

What this means in not so many words is that Canada should be a model of global connectivity. Canadians trace their origins to more than 200 countries. Nearly half the population of Toronto and Vancouver is born outside of Canada, and nearly a quarter of all Canadians speak another language in addition to English or French. This puts us ahead, but does not mean in any way that Canadians are immune to populist sentiment and rhetoric.

Discrimination against Indigenous peoples, Muslims, immigrants and visible minorities is still very much present in Canada. The challenge then becomes tackling the myths and fears that drive intolerance. One of the best ways to do that is to show that diversity actually contributes to economic prosperity.

Our new research, titled The Diversity Dividend: Canada’s Global Advantage, shows a strong correlation between ethno-cultural diversity and increased productivity and revenue. What this means is that businesses that welcomed diversity showed an increase in the bottom line. The study found that for every 1-per-cent increase in diversity, there is a corresponding 2.4-per-cent increase in revenue across 14 sectors of the Canadian economy. The correlation was strongest in cultural industries (6.2 per cent), transportation (4.1 per cent) and business services, which includes technology (3.6 per cent). If Canada wants to succeed in the high value-added sectors of the future, workplace diversity is a game-changer and offers Canada a global advantage.

In a highly competitive world, talent follows opportunity. As countries become increasingly isolationist, Canada can provide an alternative model and offer an an attractive destination for the world’s top talent. That means tackling barriers to employment, recognizing and valuing international experience, defining and measuring inclusion, and factoring diversity in corporate policies on everything from promotion to procurement. It also means supporting talent hubs and inclusive cities that provide not just jobs but transportation, housing, education, access to recreation and culture to attract and retain highly skilled millennials.

Ultimately, Canadians have a choice about what kind of society they want. While on the surface things may look good compared to Trump’s America – or Europe on the brink of a populist crisis – there is no cause for complacency. Canadians need to tackle discrimination head-on and seize the opportunity to use diversity to drive the economy and link to the world.

And when the demagogues fail to deliver, as they surely will, the time will be ripe for Canada to show how diversity is an opportunity that can benefit everyone.

A version of this article originally appeared in the Globe and Mail.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

About the Authors

CIGI Senior Fellow Bessma Momani has a Ph.D. in political science with a focus on international political economy and is a full professor and associate vice‑president, international at the University of Waterloo.

Jillian Stirk is a former ambassador and spent more than 30 years in the foreign service. She is an associate with the Simon Fraser Centre for Dialogue and a mentor with the Pierre Elliott Trudeau Foundation. She sits on a number of boards and volunteers with several community organizations.