Linking LGBT inclusion and national innovative capacity

This paper investigates the relationship between the social inclusion of lesbian, gay, bisexual and transgender (LGBT) people, and technological innovation. It empirically establishes that LGBT inclusion helps foster human capital skills, thus strengthening national innovative capacity. Exploiting cross-country data, this research provides suggestive evidence that social tolerance towards homosexuality is positively correlated with the economic complexity index, a novel measure of cross-country differences in innovative capabilities. Individual-level analyses, based on data from the World Values Survey, reveal that surveyed respondents who self-report tolerance towards homosexual acts tend to have positive attitudes towards technological innovation, ceteris paribus. This lends credence to the international evidence. Further analyses indicate that the link between LGBT inclusion and innovation is partially mediated through the accumulation of human capital. The main findings suggest that the social exclusion of LGBT people, at least to some extent, impedes long-run economic development by hindering innovative activities.