Cultural Diversity as a Driver of Innovation: Insights from Mannheim

Written by Semirask in culture change, innovation

On 22 May, we hosted a Leadership Visit at the Mannheim City Archive – the Marchivum. We invited our guests to the impressive, fully digitalized and multimedia exhibition “Typisch Mannheim!”, accompanied by a guided tour with historian Dr. Christian Groh, head of exhibitions.

One of the central theses of the exhibition: Mannheim thrived economically whenever the city opened itself up to the world.

(c) Soraya-Kandan – Marchivum

This idea sparked our guiding question: What can companies learn from the cultural transformations of Mannheim for their own journeys of cultural change and innovation?

Urban Diversity and Business Success – A Historical Perspective

Looking into the city’s past reveals a strong link between diversity and economic growth. As early as 1652, Elector Karl Ludwig invited people from all backgrounds and religions to settle and build in Mannheim – an initiative even dubbed the “Mannheim Experiment.” It was a success: foreign builders were instrumental in rebuilding the city after the Thirty Years’ War.

(a) Soraya-Kandan – Marchivum

Mannheim has long been a cradle of invention. From Carl Benz’s first automobile to the invention of the Daimler-Otto engine, the city has shaped industrial history. It was here that Heinrich Lanz developed the Lanz Bulldog, a tractor that revolutionized agriculture far beyond German borders. Even the bicycle with pedal drive, created by KarlDrais, has its roots in Mannheim. These milestones are not just museum pieces — they embody a spirit of bold experimentation and practical innovation that still pulses through the region today.

Today, amid an economic downturn and ongoing skills shortage, opening up to international talent is more relevant than ever. Studies have long shown that cultural diversity can be a driver of innovation. One such study, Cultural Diversity, Innovation, and Entrepreneurship: Firm-level Evidence from London (Nathan & Lee, 2013), states:

“We found evidence of a small but significant diversity bonus across innovation, market orientation, and entrepreneurship. First, the diversity of the management team has a small but robust link to the development and implementation of major new products. Migrant-run firms are more likely to introduce major process innovations.”

Diversity Needs Culture Shaping

In 2019, Mannheim hosted the Urban Thinkers Campus (https://www.mannheim.de/sites/default/files/2021-04/2021-04-23_Brosch%C3%BCre-UTC-2019-final_21x21.pdf), once again demonstrating its strength as an economic hub. During our visit, we discussed various factors influencing talent attraction — from inclusive urban societies to thriving research and business clusters.

But location alone is not enough. Employers also need to develop their own organizations to become more future-ready.

Introducing our Culture Change Pioneers Program and hearing from two graduates of our first cohort, it became clear how crucial it is to shape organizational culture in ways that transform difference into creativity, and creativity into tangible outcomes and benefits for customers or citizens. Only then can cultural diversity drive innovation and contribute to a competitive advantage.

What does your company do to turn cultural diversity into innovation?

Share your thoughts with us – or join one of our next Leadership Visits!