“The mantra for economic success in any company, city, or country is ‘right person, right job, right time,’” he said.
“Prejudiced economies that reject 10% or more of their population because they are LGBTQ+ are guaranteed to get this wrong. Including the talent that this population represents by creating an inclusive culture will inevitably increase entrepreneurship and innovation by broadening the talent pool.
“Anyone who has crouched in the closet at work knows how exhausting it can be to hide who you really are.”
Researchers ranked 149 cities by LGBTQ+ inclusion – factoring in legal rights, social attitudes and safety – then compared economic performance across the top and bottom quartiles.
Human capital was measured by factors like education levels and talent inflows; innovation by patents and research and development grants; entrepreneurship by business creation rates.
The report found that cities with high LGBTQ+ inclusion score “four times higher on human capital, two times higher on innovation and 2.5 times higher on entrepreneurship than less inclusive cities”.
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Correlation isn’t causation – but the authors stress that the link is “strong and global”: the more inclusive a city, the more it attracts diverse talent, fuels creativity and drives economic growth.
“It is difficult to perform at your best in the workplace if you are spending energy performing the role of ‘straight person,’” said Donovan. “There is less incentive to develop your skills if you believe your sexuality will prevent your skills being recognised.”
The findings are corroborated by a growing body of research showing that equal rights are not just a moral imperative – they’re an economic one.
Workplace discrimination based on sexual orientation costs the UK economy an estimated £2 billion each year. And UK workplaces that are diverse across gender, ethnicity and sexual orientation are 12% more likely to financially outperform their industry average.
According to the World Bank, each additional legal right granted to LGBTQ+ individuals correlates with a $320 increase in per capita GDP.
LGBTQ+ inclusion is both a social good and an economic strategy, said Dominic Arnall, CEO at Open for Business.
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“In 2023, the 1,000 largest cities in the world accounted for 60% of global GDP and over 30% of the world’s population,” he said.
“Research consistently demonstrates that more inclusive cities tend to attract top talent, foster innovation, and build more resilient economies. The correlation between LGBTQ+ inclusion and economic vitality is particularly evident, with more inclusive cities showing higher rates of innovation, stronger human capital development and greater success in attracting international investment.”
But in the UK, “inclusion for the LGBTQ+ community is not where it once was,” he added.
Until 2015, ILGA-Europe – one of the continent’s biggest LGBTQ+ advocacy groups, based in Brussels – consistently described Britain as the most queer-friendly place in Europe. But a failure to ban conversion therapy and a toxic row over rights for trans people have seen the UK fall dramatically, to 16th place.
Support for trans people’s right to change their birth certificate has fallen 23% between 2019 and 2023, from 53% to 30%.
There has also been an 11% year-on-year increase in reported anti-LGBTQ+ hate crimes, particularly anti-trans attacks.
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Conversion therapy remains legal, anti-LGBT+ hate crime is yet to be made an aggravated offense, and young, trans people face significant healthcare challenges.
The new Supreme Court ruling will likely exacerbate such challenges. On 16 April, the Supreme Court ruled that a woman is defined by biological sex under the UK’s Equality Act.
Some have interpreted the ruling to mean that trans women can be excluded from single-sex services for women, such as refuges, hospital wards and sports teams.
Keir Starmer – who has the power to change the ruling through legislation – has declined to do so.
“A woman is an adult female, and the court has made that absolutely clear. I actually welcome the judgment because I think it gives real clarity,” he told broadcasters on Tuesday (22 April). “It allows those that have got to draw up guidance to be really clear about what that guidance should say.”
Trans rights campaigners have slammed the ruling as “deeply dangerous”.
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“I think this will be the kicking-off point for a very enhanced push for overt restrictions on the rights of trans people,” said Victoria McCloud, the UK’s first transgender judge.
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