Despite the well-documented (really obvious) gender gap in the tech sector, we’re not seeing a lot of improvement, and it’s time to take some serious action.
Right now, women (who represent 57 percent of the U.S. labor force) fill just a quarter (26.5 percent) of tech jobs at the top U.S. tech firms, and earn, on average, just 85 percent of what their male counterparts do. The thing is, only 18 percent of women hold leadership positions in these companies. At the top 100 VC firms, a mere 7 percent of managing partners are women.
Could it be because men just do a better job? Well, no. Not according to the research.
Why aren’t women first in line to be funded, given their performance — and especially when you consider that advancing women’s equality could add $12 trillion to the global GDP by 2025?
The Kauffman Foundation, for example, released a study demonstrating that tech companies led by women are more capital-efficient and achieve, on average, a 35 percent higher return on investment (ROI) than firms led by men. Forbes found that women tech entrepreneurs (working from the disadvantage of having received 50 percent less VC funding), are still able to generate 20 percent greater revenue than their male counterparts.
Another study by First Round Capital documented how tech companies with a woman founder performed 63 percent better than those companies with all-male founding teams. Yet only about 7 percent of VC money goes to women-led startups, a number that hasn’t really budged in years.
So, why aren’t women first in line to be funded, given their performance — and especially when you consider that, according to McKinsey, advancing women’s equality could add $12 trillion to the global GDP by 2025?
Why is it that despite the indisputable evidence that equal access for women in the tech sector enhances the value of companies, lots of tech firms in the U.S. still have the feel of fraternities?
This is a really big problem, folks, and it’s one that we have the ability to change. But, we need to do a lot more, and that includes doing real stuff. There’s gotta be concerted action that disrupts the tech sector by producing much greater transparency.
The action needs to start at the level of equal opportunity in education. And in the U.S. we’re talking about a renewed emphasis on STEM — science, technology, engineering and math — education for all genders.
Tech companies must take the lead to publicize what they're doing and how they’re doing in diversifying their workforce.
Once we’ve got equitable education down, we’ve gotta continue that equity all the way through the employment pipeline. Tech companies need to broaden their recruitment process to go after the best and brightest talent — regardless of gender, but with an intentional effort to seek talent in communities that include women and people of color. Human resource departments need to overhaul the application and interview process to make them as gender-blind as humanly possible. And, most importantly, tech companies must take the lead to publicize what they're doing and how they’re doing in diversifying their workforce.
"If we’re going to solve the toughest problems facing our communities nationally and globally, we must foster a culture of greater diversity and level the playing field for talented women in tech," says Allyson Kapin, founder of Women Who Tech and the Women Startup Challenge.
I’ve been working with the Women Startup Challenge team for the past year, which showcases and helps fund women-led startups across the U.S. through pitch competitions (like the one we’re doing at LinkedIn in San Francisco on June 14th) and crowdfunding campaigns. The Challenge has support from industry movers and shakers including Susan Lyne of AOL's BBG Ventures; Joanne Wilson, angel investor; Arlan Hamilton, founder of Backstage Capital; Lisa Stone, entrepreneur and co-founder of BlogHer; Kathryn Finney, founder of DigitalUndivided and Karan Mehandru, general partner at Trinity Ventures.
I’ve learned a lot along the way. For example, it’s very difficult for women entrepreneurs to access capital. Some folks in the Valley say it’s a pipeline problem. I don’t think that’s the case, as more than 1,000 women-led startups have applied to be a part of these startup challenges.
I think it’s more of a networking issue. Investors are busy people, but I figure that if you’ve done well, as Kevin Spacey says, it’s your job to send the elevator back down — meaning you need to be intentional about opening your door and expanding your network to include more diverse startups. Plus, there’s the business advantage I mentioned earlier.
This is about fairness. We need to put our money where our mouths are and support gender equity in tech to really turn this problem around.
Craig Newmark is a self-described nerd, web pioneer, speaker, philanthropist and advocate of technology for the public good. In 1995, he founded Craigslist, which has seen more than five billion ads posted, most of them for free. In 2012, he was inducted into the Internet Hall of Fame. Today, Newmark's primary focus is CraigConnects, which he launched in 2011. Its mission is to promote civic engagement and philanthropy by supporting organizations effectively working for veterans and military families, trustworthy journalism, voting rights, peer-to-peer giving, women in tech, and other areas. He serves on the board of directors or as a volunteer adviser to more than two dozen renowned nonprofit organizations. Reach him @craignewmark.
This article originally appeared on Recode.net.