These 5 charts reveal the gender and diversity gaps start-ups must bridge

startups

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Kate Whiting, Senior Writer, Formative Content


  • Diverse workplaces are well-poised for innovative problem solving.
  • Many diversity gaps exist in tech start-ups, stifling opportunity.
  • Fewer than 1% of Europe’s tech founders identified as Black/African/Caribbean last year.
  • Only 43% of companies have at least one female C-suite executive.

Diverse companies enjoy a range of advantages thanks to a wide-ranging pool of talent and ideas. For instance, such companies are often more innovative and successful. According to the Boston Consulting Group, diverse firms report almost 20% higher innovation revenues, or proceeds from recently-launched products and services.

 

Diverse firms also more likely to retain staff, to spot risks, and to be more profitable, according to the World Economic Forum’s Diversity, Equity and Inclusion 4.0 toolkit.

Despite these advantages, diversity gaps still exist, especially in the tech startup ecosystem. These gaps manifest in a variety of ways, from venture capital funding, to board composition, and even to the implementation of programmes to boost company diversity.

These five charts provide a snapshot of the challenges tech startups face in 2020 – and the many opportunities for change and growth.

1. There’s a lack of diversity among founders – and it leads to stubborn patterns

Diversity among founders is a challenge in many parts of the world. Around 77% of US founders are white or caucasian, according to a 2019 Crunchbase survey. Across Europe, the share is as high as 84% according to Atomico’s State of European Tech 2019 report. In that report, fewer than 1% of Europe’s tech founders self-identified as Black/African/Caribbean.

Since diversity plagues funders as well, stubborn patterns can emerge and even cross borders. Most funders hail from North America and very little capital is invested in emerging markets. In many parts of Africa, foreigners – not locals – snag the biggest funding deals. In fact, according to one 2017 study, only 10% of all funding in the east African region went to local founders.

tech diversity start ups white black brown coloured ethnicity gender man woman board c suite business enterprise founder ceo
More founders identified as white than any other ethnicity.
Image: atomico

2. Male-founded start-ups draw the greatest share of deals and dollars

2019 closed with only 3% of seed, venture and corporate dollar investments going to female-only founded start-ups – down 5% from the previous year, according to the annual Crunchbase Diversity Report.

That said, there are some signs of change. At the end of 2019, that same Crunchbase report found that 20% of start-ups raising their first round of funding had a female leader – double the number a decade earlier.

tech diversity start ups white black brown coloured ethnicity gender man woman board c suite business enterprise founder ceo
More VC goes toward male founded start ups.
Image: Crunchbase

3. Few start-ups are actively trying to boost diversity

Only a quarter of start-ups (26%) are actively trying to increase diversity within their leadership teams, according to Silicon Valley Bank.

For its 2020 Global Startup Outlook report, it asked start-ups in Canada, the United States and the United Kingdom about the programmes in place to increase diversity.

Less than half (43%) said they had company-wide promotion and hiring goals, while fewer than one-in-five had these goals for executive positions (the C-suite).

tech diversity start ups white black brown coloured ethnicity gender man woman board c suite business enterprise founder ceo
The majority of recipients said their company didn’t have any programs in place to increase diversity.
Image: SVB

4. Lack of diverse representation in C-suite

For the first time this year, Silicon Valley Bank asked start-ups in the US, UK and Canada about the ethnic and racial minorities in their C-suites and on their board.

In both cases, less than half of the companies had at least one member of their leadership teams who was ethnically or racially diverse.

tech diversity start ups white black brown coloured ethnicity gender man woman board c suite business enterprise founder ceo
Racial diversity among c-suite and board members.
Image: SVB

5. The gender gap in leadership persists

There is slow, but positive progress towards gender parity in leadership positions, as the World Economic Forum’s Global Gender Gap Report 2020 found. But only 55% of adult women are in the labour market, compared to 78% of men.

What’s the World Economic Forum doing about diversity, equity and inclusion?

The COVID-19 pandemic and recent social and political unrest have created a profound sense of urgency for companies to actively work to tackle racial injustice and inequality. In response, the Forum’s Platform for Shaping the Future of the New Economy and Society has established a high-level community of Chief Diversity and Inclusion Officers. The community will develop a vision, strategies and tools to proactively embed equity into the post-pandemic recovery and shape long-term inclusive change in our economies and societies.

As businesses emerge from the COVID-19 crisis, they have a unique opportunity to ensure that equity, inclusion and justice define the “new normal” and tackle exclusion, bias and discrimination related to race, gender, ability, sexual orientation and all other forms of human diversity. It is increasingly clear that new workplace technologies and practices can be leveraged to significantly improve diversity, equity and inclusion outcomes.

The World Economic Forum has developed a Diversity, Equity and Inclusion Toolkit, to outline the practical opportunities that this new technology represents for diversity, equity and inclusion efforts, while describing the challenges that come with it.

The toolkit explores how technology can help reduce bias from recruitment processes, diversify talent pools and benchmark diversity and inclusion across organisations. The toolkit also cites research that suggests well-managed diverse teams significantly outperform homogenous ones over time, across profitability, innovation, decision-making and employee engagement.

The Diversity, Equity, and Inclusion Toolkit is available here.

And the gender gap persists in the C-suite and on the board among tech start-ups, with 43% of companies having at least one female C-suite exec and 42% having at least one female board member.

tech diversity start ups white black brown coloured ethnicity gender man woman board c suite business enterprise founder ceo
Female representation at c-suite and board level.
Image: SVB

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

No great discovery was made without a bold guess – Isaac Newton

Ocean life faces ‘onslaught of threats’ from human activity, but tools exist to save it

How technology is driving a fourth wave of environmentalism

Sweden is fighting loneliness by housing older and younger generations together

Japan must urgently address long-standing concerns over foreign bribery enforcement

EU@UNGA 74: Working towards a more peaceful, secure and prosperous world

Do men and women really have different leadership styles?

INTERVIEW: Advancing human rights, a ‘never ending process’ says new UN rights chief

How regenerative agroforestry could solve the climate crisis

How has policy affected employment in small businesses in the US?

Young people demand a transparent job market: new campaign launches on international interns day

Brexit: Is there anybody supporting a non-violent separation?

Spring 2019 Standard Eurobarometer: Europeans upbeat about the state of the European Union – best results in 5 years

Mental health in the times of coronavirus

Juncker’s Investment Plan in desperate need for trust and funds from public and private investors

Parliament gives green light to EU-Singapore trade and investment protection deals

COVID-19 will hit the developing world’s cities hardest. Here’s why

Countering illegal hate speech online – EU Code of Conduct ensures swift response

Syrian Refugees in Germany face distinctly different challenges than those in Lebanon

Somalia: UN congratulates Puntland region’s newly-elected President

Reflections on the the biggest refugee crisis since World War II

FROM THE FIELD: Hardy seeds bear fruit to protect Colombia’s environment

UN health agency welcomes Facebook pledge to stop vaccine misinformation from going viral

European Elections: “Web giants” are urging users to vote

Huge areas of the Arctic are on fire – here’s what that means for the planet

Commission presents first reflections on building a strong social Europe for just transitions

Hostilities in Syria’s southwest, mean cuts in vital aid across Jordanian border: Senior UN official

These 4 skills can make the world better after COVID-19

3 leaders on creating a pipeline for female talent in business

Commission deepens criticism on German economic policies

EU deserves the title of the Syrian affair merchandiser

Erdogan’s electoral win on a ‘me or chaos’ dilemma means trouble for everybody

This is what happens when a school swaps french fries for quinoa

Who is to pay for Trump’s trade war against China?

COVID-19: MEPs urge quick action to prevent “huge recession”

Turkey to let EU alone struggle with the migrant crisis while enhancing its economic ties with Russia instead?

Universal Health Coverage in the EU: Are we really leaving no one behind?

Topic: Mental Health in times of pandemic: What can each individual do to lessen the burden?

Antitrust: Aspen proposes 73% price reduction for six off-patent cancer medicines to remove Commission’s excessive pricing concerns

Trump declares emergency and WHO urges speed – latest coronavirus updates

It’s ‘time for concrete action’ says UN chief, welcoming inter-Korean agreement

European Commission launches global coalition for biodiversity

Coronavirus: 23 new research projects to receive €128 million in EU funding

Climate change: won or lost in cities or by cities?

Ending extreme poverty crucial to sustainable future for all: UN chief

How Japan and Singapore are reinventing old age

Simple Technology Saving Lives: Remote Auscultation

A Sting Exclusive: Towards better business opportunities for the EU and its neighbours, Commissioner Hahn live from European Business Summit 2015

UN chief welcomes South Sudan’s Unity government, lauds parties for ‘significant achievement’

Spring 2020 Economic Forecast: A deep and uneven recession, an uncertain recovery

Migration: Commission steps up emergency assistance to Spain and Greece

Nuclear test ban treaty critical to global collective security – UN chief

Protecting Health Workers’ Safety Around the World

Human traffickers in Libya are posing as UN staff, says Refugee Agency

“If the job market doesn’t exist, then even the most brilliant Youth Guarantee cannot ensure a job to these young people”, European Youth Forum Secretary General Giuseppe Porcaro on another Sting Exclusive

A new generation of women leaders is making waves in the Arab world

Do the EU policies on agro-food smell?

EU and China seize momentum to enhance trade agreements in response to Trump’s administration

Businesses succeed internationally

International Women’s Day 2019: more equality, but change is too slow

More Stings?

Advertising

Trackbacks

  1. […] These 5 charts reveal the gender and diversity gaps start-ups must bridge  The European Sting “startups when:1d” – Google News […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s