R&D manpower diversity and technological performance: Exploring the interaction between demographic and functional diversity

We assess the impact of R&D manpower diversity on firms' technological performance. Relying on team diversity research, we hypothesize that both demographic and functional diversity of the R&D workforce influence technological performance. In addition, we expect that both types of diversity interact with each other. We test our hypothesized relationships using unique survey data on 794 Singapore firms collected by The Agency of Science, Technology and Research. We use variety in educational background and knowledge areas of R&D employees as indicators of functional diversity. Demographic diversity is captured using variety in gender and nationality of R&D employees. The number of patent applications is used as a proxy for technological performance. Our findings point to significant interactions between different sources of R&D workforce diversity. In particular, we identify substitutive relationships between (a) educational and gender diversity, and (b) nationality and knowledge area diversity.