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LGBTQ-Friendly Policies Bolster Corporate Innovation, New Study Shows
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Companies that have policies designed to ensure their workplaces are LGBTQ-friendly are more likely to be innovative that those who don't according to a new study that draws on almost a decade and a half of data.
The research, done by academics at Finland's Aalto University and the University of Vaasa, is based on data from the Corporate Equality Index—a benchmarking tool on corporate policies, practices, and benefits pertinent to lesbian, gay, bisexual, transgender, and queer employees—as well as figures from the U.S. Patent and Trademark Office and other public sources.
It established that for every standard deviation increase in a company's CEI, the number of patents increased by 20 percent. The academics also found that LGBTQ-friendly firms demonstrated an almost 25 percent increase in the number of patent citations, which is broadly considered an indication of how other companies value the innovativeness of a particular patent.
Other studies in the past have determined a link between profitability and workplace diversity more generally. This, however, is the first to specifically examine sexuality and gender-inclusivity as it relates to innovation.
'Our results demonstrate that firms with progressive LGBTQ policies produce more patents, have more patent citations, and have higher innovation quality as measured by patent originality, generality, and internationality,' commented Jukka Sihvonen, from Aalto University School of Business.
'Innovation is the fuel that drives both growth and profitability. Companies need innovation,' he added. 'The magnitudes of impact linked to LGBTQ-friendliness are big — and that means that the economic significance is too.'
These latest findings are particularly timely considering the widespread rollback of corporate diversity, equity and inclusion initiatives in response to the Trump administration's executive orders.
In January, almost immediately after taking office, President Donald Trump issued a slew of orders targeting DEI programs both in the public and private sector. In response, many companies across the U.S. and beyond, announced that they were rolling back such initiatives or pausing programs.
References to diversity, equity and inclusion in Fortune 100 company reports have also dropped. According to an analysis by Gravity Research, they declined by 72% between 2024 and 2025.
But surveys of corporate leaders show that a sizable contingent of managers still see the value of DEI initiatives. One example: A national survey—conducted by Catalyst, a consultancy focused on creating inclusive workspaces, in conjunction with the NYU School of Law's Meltzer Center for Diversity, Inclusion, and Belonging—recently found that 83% of C-suite leaders and 88% of legal leaders said that they believe maintaining or expanding DEI is essential to mitigating legal risk.
That survey also showed that 77% of the executives believe DEI initiatives are positively correlated with improved financial performance, and 81% think that a focus on DEI was likely to bolster customer loyalty.
The new research out of Finland used analytical methods to control for bias, and found that the link between inclusivity and innovation existed regardless of the political context.
'The results get marginally stronger when most conservative states are excluded, but the difference is really minor, and the findings remain largely the same when the most liberal states are left out,' explained Sami Vähämaa from the University of Vaasa, who also led the research.
And Veda Fatmy, a co-author from the University of Vaasa, noted that although the research drew on data collected between 2003 and 2017, extrapolating beyond that time frame suggests that the positive trend might actually be getting stronger over time.
