October 12, 2019

The Case for Inclusion and Diversity in the Tech Sector

This article starts out talking about STEM (science, technology, engineering and mathematics) knowledge and morphs into a discussion of diversity generally.  The authors seem to miss that what happens in STEM jobs largely contradicts what they say about diversity.

Predictably, they say that diversity in top management is a very good thing and makes more money for the firm concerned.

But as they say about hi-tech, there are very few females there and yet hi-tech flourishes.  We are supposed to believe that it would flourish even more with more female managers.

Whether that is true depends on two things:  The diversity effect being significant and STEM fields being much like any other field.  Both assumptions are very questionable.  STEM expertise -- and IT expertise in particular -- requires very high levels of IQ and such levels are mostly found among males.  So STEM is different from the start.

The evidence for benefit from diversity that the writers below quote is the much belaboured report from Kinsey & Co which first came out in 2007 and was reissued in 2015. I have read the passages in that report that detail their analyses.

We can dismiss the female effect straight off.  They found that having females aboard went with a 5% improvement in performance in the UK but only a 1% improvement in the USA.  So unsexy boards are not worth bothering with in the USA but have some point in the UK.

What is different about the UK and how can that difference explain what McKinsey found? This being Britain, it almost certainly has to do with social class.  In Britain, people who went to the expensive private schools are at the top of every heap.  Britain is run by "old boy" networks.  It seems likely, however, that in searching for able female managers, that network had to be broken down to some extent.  It was only by looking outside traditional talent pools that many able females could be found.  So in Britain it was opening up to "lesser" social classes that drew in more management talent rather than opening up to women.

So the evidence in favor of female diversity is just not there.

What about ethnic diversity? Here the report is very misleading, possibly deliberately so.  They fail to discriminate between ethnicities. From reading them we would very readily conclude that whether a firm had 3 Asian or 3 blacks on its board would not matter.  But given the vast record of black educational failure we would have to conclude that the contribution of blacks to a hi-tech firm's results would be very small.  We would have to suspect that it is only in token roles that blacks are there at all.

But, when it comes to brilliant Chinese or exceptional communicators like Indians, one can readily believe that they would make a useful difference on almost any management team.  And it would in fact mostly have been an Asian presence that made a firm "diverse" in McKinsey's study. So a more precise summary of the evidence -- that having Asians in your team was beneficial -- would have been a much more helpful guide.  As they stand, the actual conclusions are politically correct rubbish


“The uncomfortable truth is that the technology industry today is not a place in which everyone, of any gender, race, disability, religion, sexuality, and socioeconomic background can thrive and succeed,” said Francesca Warner, CEO of Diversity VC, in Diversity & Inclusion in Tech’s report. In November 2018, a Guardian headline pointed to a “worrying” lack of diversity in Britain’s tech sector. Only 15% of the tech workforce are from BAME (Black, Asian and Minority Ethnic) backgrounds, while gender diversity lies at 19%—compared to 49% for all other jobs (Diversity in Tech, 2019). Meanwhile, the proportion of men and women appointed as tech directors has remained almost the same since 2000—only 22% of tech directors were women in 2018 (Tech Nation).

And this isn’t just a problem in the U.K. The European tech community as a whole is dominated by men. Research by Atomico notes that out of the 175 large start-ups they surveyed, only one had a female chief technology officer. Even roles like chief marketing officer and chief financial officer that are often held by women, were held by men 80% of the time. The report stated that the industry was failing to make any meaningful progress, and that there had only been a single percentage point increase in the level of female participation at European tech community events in the last two years.

Check Warner from Diversity VC wrote in Atomico’s report: “Europe is not necessarily tangibly better or worse than other tech hubs. However, given that Europe has such a diverse range of geographies and people this should be a key strength.”

While looking at how funding is allocated, the gender imbalance is striking. All-male founding teams received 93% of the capital invested in 2018, compared to just 5% received by all-female founding teams. The report notes that these figures have shown little to no improvement in the last five years.

Restoring gender balance to the tech sector

Today, technology is dominated by men. But this wasn’t always the case. In fact, the world’s first programmer, Ada Lovelace, was a woman. In the 1940s, Lovelace turned a complex formula into simple calculations that could be fed into a mechanical computer. She was also the first person to realize that a general purpose computer could do anything, given the right data and instructions.

So how did we get here? And can we rebalance the gender gap in the tech sector? Tech Talent Charter—an initiative that drives organizations to deliver greater diversity in the U.K. tech workforce, is aiming to do just that. The CEO Debbie Forster said, “If everything is going to be digital and this huge disruption is coming in terms of artificial intelligence and machine learning, it is essential that the minds creating these technologies are minds that represent the whole population.”

The Charter has signatories ranging from tech giants like Microsoft, Salesforce and Cisco, to banks and organizations including Lloyds Bank, the BBC, Cancer Research UK, Domino’s Pizza, and a number of SMEs and start-ups.

“All of the statistics show that companies with more diverse teams are more profitable, more sustainable, and more able to survive disruption,” said Forster. “Companies are waking up and realizing that it’s not just a good thing to do, it’s not even just a smart thing to do, it’s essential.”

“The uncomfortable truth is that the technology industry today is not a place in which everyone, of any gender, race, disability, religion, sexuality, and socioeconomic background can thrive and succeed.”

According to McKinsey & Company, companies in the top-quartile for gender diversity on executive teams were 21% more likely to outperform on profitability. And it’s not just gender. The same research showed that companies with high ethnic and cultural diversity on executive teams were 33% more likely to have industry-leading profitability. “I’m not bothered to chase every company to join us because the market is going to reward those who do,” said Forster. “Diversity is bottom line profitability.”

More HERE






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