Economic Case

In the previous two versions of this report, released in 2018 and 2020, we laid out the economic case for LGBTQ+ inclusive cities. We showed that these cities tend to be more innovative, attract high-skilled workers, and have a higher quality of life.

Inclusion and economic competitiveness are mutually reinforcing.

Data provided in this report provides further strength to this economic case. Using updated datasets, we provide a new set of correlations that shows an even deeper relationship between LGBTQ+ inclusion and economic competitiveness in cities. It is important to remember that correlation does not equal causation.

The relationship between inclusion and competitiveness is complex, and isolating causal effects is challenging. It could be the case that the economic policies that make cities more economically competitive also cause them to be more open and inclusive. The most likely explanation is that inclusion and economic competitiveness are mutually reinforcing. Cities which are open for business signal that they are welcoming places for talented individuals and encourage the free flow of ideas which spurs innovation.xx

This enhances their competitiveness, which leads to more open-mindedness, creating a virtuous cycle.

LGBTQ+ inclusion, GDP, and moving up the value chain

Data in this report shows that LGBTQ+ inclusion is correlated with overall levels of economic development in cities. The chart below shows the strong positive correlation (0.65) between a city’s LGBTQ+ inclusion score and the log of its GDP per capita. This relationship is further strengthened when cities in countries that rely on extractives are removed from the sample, 2 which raises the correlation to 0.78. This suggests that LGBTQ+ inclusion is an important strategy for cities that need to develop diversified economies.

Cities with higher GDP per capita also tend to derive more economic value from high value added industries, such as finance. It identifies three categories of cities; market towns, production centers and creative and financial hubs.

Market towns

which have high levels of retail and tourism business

Production centers

which tend to be manufacturing hubs

Creative and financial hubs

which have high levels of financial services and creative industries

Economic resilience is linked to LGBTQ+ inclusion 

  • What does this tell us? First, it empirically supports the UN-Habitat’s claim that inclusion of a city’s most vulnerable citizens is important for building resilience, an important lesson for policymakers around the world. Second, it suggests that business leaders can look at a city’s LGBTQ+ inclusion record to provide clues of how likely that city is to bounce back from economic shocks. And last, it can help job seekers understand which locations may have better economic prospects post-pandemic.

  • Description text goes here

  • Description text goes here