TITLE:
Investigating the Effect of Diversity on Innovation Performance: An Empirical Research on the Relationship between Career, Education, and Age Diversity of Start-Up Founders and Business Growth
AUTHORS:
Daisuke Kanama, Shin Ito, Sakura Muranaka, Toshiya Watanabe
KEYWORDS:
Innovation Performance, Start-Up, Founder, Diversity
JOURNAL NAME:
Journal of Human Resource and Sustainability Studies,
Vol.12 No.4,
December
4,
2024
ABSTRACT: Diversity among members in innovation activities is widely recognized as an important initiative. However, previous studies on innovation and diversity present conflicting findings regarding the impact of diversity on innovation performance. To examine the effect of diversity on innovation performance, we focused on the diversity of start-up founders and innovation outcomes. A questionnaire survey was conducted with start-ups in Japan. Questionnaires were distributed to 483 start-ups in 2023, and 136 valid responses were obtained. The analysis was conducted using data from 126 firms, after excluding cases with missing values for relevant variables. This analysis yielded three key findings. First, a larger number of start-up founding members have a positive impact on business growth. The results indicate that start-ups with multiple founders tend to advance to higher funding rounds than those founded by a single individual. Second, higher education diversity among start-up founding members positively influences the progress of funding rounds. The central figure within the spectrum of diverse educational backgrounds is the holder of a master’s degree and the presence of such individuals significantly alters the growth trajectory of start-ups. Third, higher job career diversity positively affects the progress of funding rounds. The professional background of the founders before starting the business greatly impacts the social capital brought into the start-up.