A new report by the Center for American Entrepreneurship (CAE), shows that women continue to be significantly underrepresented among leading venture-capital firms and venture-backed startups.
According to the study, only “16% of the nearly $83 billion invested in U.S. venture-backed startups went to companies with at least one female founder, and just 2.5% went to startups with all-female founders.” The report points out that these numbers are significantly lower than the shares of women in the adult population (51%), in the labor force (47%), overall business ownership (36%) and employment in the high-tech industries overall (30%).
On a brighter note, data also shows that the women-founded shares of companies receiving the first round of venture capital have increased from 7% in 2005 to 21% by 2017. “While there is still much room for improvement, there is a clear trend towards a more gender-inclusive founder base of venture-backed companies since at least 2005,” said the study.
Lack of gender equality in business, generally is not only a social issue but an economic one as well. According to UN Women, economically empowering women, boosts productivity and increases economic diversification. For example, facts and figures presented by UN women say that raising the female employment rates in OECD countries to match that of Sweden, could boost GDP by over $6 trillion.
It is well known that technology is a male-dominated field. Most of the biggest names in tech are men and women remain mostly absent in computing and tech innovation. Data presented by the National Center for Women in Information Technology, points out that in 2017, only 26% of the computing workforce were women and less than 10% were women of color.
The gender gap in terms of both venture-capital financing and participation in the tech workforce is a tremendous waste of potential. While we insist on putting barriers to women’s involvement in innovative fields, we are at the same time, hindering their creative and economic contributions. Bringing more women into tech requires a conscientious effort and policymakers should use this data as a trigger for policies that promote greater inclusivity, both in tech and in other fields.
By Giovanna Bellotti Azevedo