Because of the attributes of definition of culture, the results of studies on the impact of culture has been two-folded. Majority of studies have indicated the positive impact culture although there are some research findings who concluded culture has a negative impact due to mainly language barriers which led to low level communication which in turn led employees to low level innovation. Hence the impact of culture on innovation and economic development could not be agreed on. This study is, therefore, mainly aimed at examining the impacts of workplace cultural difference and human capital mobility on innovation, and the impact of innovation on economic growth in Europe. Accordingly, Germany, France, Belgium, and Luxembourg were selected purposively selected based on higher number diversified workforce available in companies located in these countries. Hence, data was collected using a questionnaire random sample of 392 employees (98 from each country) were selected and an in-depth interview was taken place with managers and other relevant bodies. Consequently, though small portion of the respondents mentioned the negative impact of cultural diversity, the majority of the respondents and the results of in-depth interview implied that cultural diversity brings people together and enables them to be creative and enhance their innovative performance. Mobility of skilled human capital is an attribute to culturally diverse workforce in a certain company which enable them share knowledge and skills which in turn help their innovative capacity. Therefore, this study concluded that cultural diversity has a significant positive impact on innovation and hence on the economic growth. But the barriers that may be seen at workplace due to cultural difference should properly managed and prior training sessions to newly employed ones and a platform where all the employees can get an opportunity to introduce themselves and ease their communication should be arranged.
Keywords: Culture, Innovation, Mobility, Economic growth