How did contact with other cultures during the renaissance period affect the identity of european groups?

During the Renaissance the cities of Italy were (especially in the north) were the largest in Europe, their culture the most urban. The other major states of Europe (such as Spain, France and England) were still much more agricultural in nature and their cities were much smaller. The one exception perhaps is the single city of Constantinople (Istanbul) which by the 15th century was on its last leg and was conquered by the Turks in 1453. Furthermore, in comparison to the Islamic cities such as Grenada, Baghdad and Alexandria even the largest European cities of Italy were much smaller than the those of the Islamic Empire(s). 

However, the renaissance is a very important period in European history because it is the point at which the Europeans and western civilization began to set themselves itself on a new trajectory that would find them progressing both culturally and technologically at a much faster pace than any other people on the globe. 

Why did this movement start in Italy? Although it is still debatable, many historians believe Italy was well positioned for this type of development. Additionally as cultural heirs to the Roman empire they were surrounded with ancient Roman and Greek culture, which in many ways was superior to the cultures that had followed afterwards starting with the Dark Ages. Therefore this re-discovery of ancient cultural and of ancient text (mostly preserved in Arabic and re-translated into Latin or Greek) gave the Italians an advantage by gaining the wisdom of these great and ancient peoples who had united almost all of Europe. But the drive to learn and teach about the ancients and to discuss and develop their culture started in the cities, those centers for trade and scholasticism which were no doubt the prime drivers behind the Renaissance. 

Hope that helps.