Why are Black and Latino people still kept out of the tech industry?
People march on the Golden Gate Bridge in San Francisco as part of a protest on June 6 against the death of George Floyd on Memorial Day. (Jeff Chiu / Associated Press)
Tech seemed to be turning a corner.
For years, the industry giants had resisted demands for data on the diversity of its workforce, which made it difficult to determine exactly how much whiter and more masculine Silicon Valley was than the general population. However, Google's decision in 2014 to publish the breakdown by race and gender of the workforce seemed to signal a fundamental change.
The numbers showed an industry dominated by white and Asian men. Of the almost 50,000 employees at Google in 2014, 83% were men, 60% white and 30% Asian. Only 2.9% were Latinos and 1.9% black. A year later, when other major Silicon Valley companies began to publish their own diversity figures, Google announced that it would provide $ 150 million to increase diversity in the company.
In recent years, Google has more than doubled its workforce, but made minimal progress toward a more representative one. The numbers are similar across the industry.
This lack of diversity - as of May, Google reported that 5.9% of its employees and contractors are Latinos and 3.7% Black - extends to the ranks of top executives, entrepreneurs who started businesses, and venture capitalists working in Startups invest.
The industry, which is proud of agility, has failed to drive diversity in the workplace. The net result is an entire economic sector - the sector that has created the greatest wealth in California over the past 10 years, shaped billionaires and redesigned the San Francisco Bay Area in its own image - that is functionally inaccessible to black and black Latino people .
Technology leaders have often referred to a "pipeline problem" to explain the lack of recruitment and promotion of black people. In 2016, 12% of graduates with a degree in science, technology, engineering, or math were black, according to the National Center for Education Statistics. Even the senior class of computer science majors in Stanford, the elite training ground in Silicon Valley, is more diverse than the companies right next to the campus.
Regardless of whether you set goals based on the national population or STEM graduates, only a few technology companies come close, said Freada Kapor Klein, founding partner of the venture capital company Kapor Capital, which has been committed to an increasing diversity of technology for decades.
"There are many hard and fast numbers you can use to set the goal posts," said Kapor Klein. "But [tech companies] aren't even in the parking lot - they're so far from the field that they need binoculars to see them."
According to Kapor Klein's assessment, the problem does not lie in education, but in access and support. A number of black tech professionals agree that the industry's trust in personal relationships to provide access and opportunities is partly to blame, leading to a network effect that speaks against the inclusion of Black and Latino.
The origin of the technical ecosystem - venture capital funds - is typical of the problem.
Kanyi Maqubela, managing partner of Kindred Ventures, said that the industry's trust in personal relationships maintains a gate-keeping system that is almost designed to keep investors like him out.
Black investors make up less than 1% of venture capitalists. And it is a small world at first. In 2018, according to an information poll, only 713 individual investors in large venture capital funds with assets under management of more than $ 250 million had the authority to do business, sit on the board, and issue checks to invest in companies. Of this group, 11 were Latino and seven Black.
Some leading companies like Sequoia, Benchmark, Greylock and Kleiner Perkins have no black partners at all.
The large pools of money that limited partnerships invest in venture capital funds will only trust new venture capitalists if they are more established investors with whom they have worked in the past - and more established black investors are few and far between.
When a black VC tried to get a new fund from these limited partners, Maqubela said: "They take all the demographic patterns they know and only apply them to you."
"I was lucky enough to have attracted or recruited a number of mentors who decided to coach me and vouch for me, almost all white men," said Maqubela. "When I went out to find a fund, over a dozen people spoke and made calls on my behalf to indicate that I was in the club."
This barrier makes it difficult for black VCs to establish a solid track record of investing large sums of money and generating large returns on their LPs. BLCK VC, a group founded in 2018 as a support and organizational network, has a stated mission to increase the number of Black VCs from 200 to 400 by 2024 in an industry with nearly 4,000 active investors nationwide.
"I spoke to a black VC who could circle me intellectually in terms of finance and products, but you didn't know you needed strong references to get LPs credibly," said Maqubela. "It's evidence of the structural nature of how venture capital is broken."
This system has resulted in a risk capital landscape that is less diverse than current financial institutions. According to a 2017 Harvard Business School study, six percent of investment bankers and almost 9 percent of financial advisors are black, compared to less than 1 percent for venture capital.
Venture capital problems persist across the industry.
The percentage of black employees in large technology companies remains low: 2.9% at Salesforce, 3.8% at Facebook, 4.4% at Slack, 4.5% at Microsoft and 6% on Twitter. The Lyft and Uber workforce consists of 9% and 9.3%, respectively, blacks, which has a strong impact on the poorly paid operating teams. Apple's workforce is 9% black, but it also includes retail employees. Amazon, which has nearly 800,000 employees worldwide, mainly in low-wage warehousing and logistics jobs, employs a total of 26.5% blacks, but only 8.3% blacks among managers.
The number of blacks in management positions or highly paid technical roles is even lower. For example, at Google only 2.6% of managers and 2.4% of technical staff are black. On Facebook, blacks make up only 3.1% of those in management positions and 1.5% of those in technical roles.
Less than 1% of startups who get risk finance are black. And since there are only a few black investors on their boards, the percentage of top black executives at large technology companies is even lower.
The problem is not the lack of qualified candidates, but the unwillingness of companies to open the door, said Bari Williams, legal director at Human Interest, a financial services startup.
Companies are reluctant to expand the schools from which they recruit to historically black colleges and universities, said Williams, who works for diversity in Silicon Valley. "It always comes down to lowering the bar," she said. Williams, who previously worked at StubHub and Facebook, said she saw how candidates were ignored because they attended an HBCU.
Many technology companies also rely heavily on recommendations from current employees, a system that is not uncommon in business, but can enhance network effects. "Who do you usually refer to? People who look and act and dress and speak and do the same things that you do," Williams said.
Once hired, employees have to overcome further hurdles to success. Leaders "want to look after and care for people who look like them or who remind themselves of themselves," said Williams. "So you have no one to stand up for you."
The result is that even when blacks and latinos enter the door, they often search for the exit soon and sales remain high.
"Tech's approach to diversity in recent years has been like filling the bathtub with an open drain," said Kapor Klein, who co-wrote a study on the subject in 2017. She said companies need to do the hard work of inspecting everything from hiring and investment practices to managing human resources to eradicate practices that alienate and exclude underrepresented groups. "If they're biased, fix them," she said.
Since national protests against George Floyd's murder in police custody sparked an investigation into structural racism across American society, a number of venture capital funds and technology companies have announced initiatives to address the lack of black and Latin American representation.
Japanese technology giant SoftBank, which has made waves in the tech world with its $ 100 billion vision fund in recent years, announced a $ 100 million opportunity fund in early June that will only be available to entrepreneurs from Colors should invest. On the same day, Andreessen Horowitz, a leading venture fund in Silicon Valley with $ 14 billion in assets under management, announced a similar fund that started at $ 2.2 million from the company's partners, but continues to grow with contributions should.
A number of companies have made declarations of solidarity with the protests, although some have so far contradicted the company's business and hiring practices. Microsoft and Apple have committed to focus on hiring and retaining black people. Apple has pledged $ 100 million to support the effort. Many companies have committed to supporting racial nonprofit organizations or black-owned companies. Google has pledged more than $ 175 million, and Facebook and Amazon have donated $ 10 million to nonprofit organizations for racial justice. Facebook also announced that it would commit and commit to $ 100 million this year to support black-owned companies through a mix of grants and free advertising on its platform, including $ 100 million to black-owned suppliers each year to forgive.
Black tech professionals who have seen waves of engagement say they are waiting to see if these commitments lead to concrete changes in attitudes, mentoring, and investments.
Brentt Baltimore, senior associate at Los Angeles Venture Fund Greycroft and a member of BLCK VC, said that he and his colleagues in the group have been swamped with questions from people across the industry in recent weeks asking how to do better can.
Baltimore said that he is happy that more people are talking about the problem, but that "boots on the ground" are really needed: consistent money, time and leadership to bring more black tech professionals and investors to the industry.
Without that, he said, "I don't see much structural change."
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