Why diversity is essential for innovation, and ultimately survival, is shown in this wide-ranging article on How Culture Drove Human Evolution:
You start out with two genetically well-intermixed peoples. Tasmania’s actually connected to mainland Australia so it’s just a peninsula. Then about 10,000 years ago, the environment changes, it gets warmer and the Bass Strait floods, so this cuts off Tasmania from the rest of Australia, and it’s at that point that they begin to have this technological downturn. You can show that this is the kind of thing you’d expect if societies are like brains in the sense that they store information as a group and that when someone learns, they’re learning from the most successful member, and that information is being passed from different communities, and the larger the population, the more different minds you have working on the problem.
If your number of minds working on the problem gets small enough, you can actually begin to lose information. There’s a steady state level of information that depends on the size of your population and the interconnectedness. It also depends on the innovativeness of your individuals, but that has a relatively small effect compared to the effect of being well interconnected and having a large population.
It’s not about innovative individuals so much as the ability of the network (society, organization, company) to stay connected to its collective knowledge. This is an important factor to consider in knowledge-intensive organizations. How quickly would your lose collective knowledge if people do not share their knowledge? Are your knowledge networks large enough to ensure that collective knowledge does not get lost? Is your organization more like an isolated island or part of a connected and diverse continent?