Diversity: Continuous Compounding Benefits

Diversity: Continuous Compounding Benefits


Diversity's benefits today can lead to powerful cumulative effects over time.



In his book, The Difference, Scott Page advises that we should not expect diversity (cognitive or identity diversity) to result in out-sized leaps in improved performance (he points out that not even the computer or the car translated into significant increases in performance).

But he highlights how even a small 2-5% increase in productivity in a company can translate into big long-term impacts, compounded over time. So even if diversity were to translate into only a modest increase in performance today, the potential improvement can lead to a much more powerful cumulative effect over time. He uses the Rule of 72 as an analogy, pointing out, for example, that if diversity were to improve productivity 4% every year, a company's annual productivity would double in less than 20 years. (Cited from Page's analysis on pages 319-320 of The Difference.)




Page, Scott, The Difference: How The Power of Diversity Creates Better Groups, Firms, Schools, and Societies, Princeton University Press, Princeton and Oxford, 2007.