According to data from PitchBook,a private investment database, $85 billion was invested in startups in 2017, but only 2% of those venture capital funds were invested in companies founded or run by women. Conversely, all-male teams received nearly 80% of the venture capital funds invested.
However, a June 2018 report by management consulting firm Boston Consulting Group reveals that women aren’t the only ones negatively impacted because of the gender disparity in venture capital funding. Investors are also losing out.
Researchers conducted a five-year review of investment and revenue data at 258 companies founded by men and 92 companies founded by women. According to the report, startups founded and co founded by women actually performed better over time, generating 10% more in cumulative revenue. The analysis also indicates women are a better financial investment. For every dollar of funding, women-led startups generated 78 cents, while male-founded startups generated just 31 cents.
Increasing gender parity is the right thing to do, but it also makes good financial sense.
For example, in Australia, the rise in female employment since 1974 has boosted economic activity in the country by 22%.
Additionally, a 2018 study by management consulting group Mckinsey & Company found that companies in the top quartile for gender diversity on their executive teams were 21% more likely to experience above-average profitability.
While progress is being made to address gender parity, the ways in which people work and the jobs they do is rapidly changing. Ensuring equity in the workplace means targeting those innovative and growing fields where women have traditionally been left out. Here are three areas where women are falling behind their male counterparts.
In December, the World Economic Forum produced it’s annual report looking at gender parity around the globe. The Global Gender Gap Report 2018 examined 149 countries, looking at their progress towards gender parity in the areas of economic participation, opportunity, educational attainment, health and survival, and political empowerment.
This year, the World Economic Forum report also paid specific attention to the skills gender gap in artificial intelligence, a burgeoning industry that is rapidly creating job opportunities. According to the report, women make up just 22% of all professionals in artificial intelligence. At 72%, the gender gap in this field is much higher than the global average of 32%.
Additionally, the report indicates the AI gender gap is even greater in specific industries, including the entertainment industry where women account for only 13.3% of AI professionals, and the manufacturing industry where only 18.5% of the AI workers are women.
According to the report, the gaps in AI reflect both the broader gender gaps within science, technology, engineering and mathematics (STEM) studies as well as gender gaps in the acquisition of emerging skills.
In 2018, enterprise software development company HackerEarth produced a report looking at female representation in tech leadership. According to the report, even though women developers are well-versed in in-demand languages, they struggle to find their way to leadership roles.
The survey included 1,000 female software developers, system administrators, quality assurance developers, product designers, engineering managers and executives. Eighty-six percent of the respondents said they have a formal degree in computer science. Seventy-one percent of respondents identified as individual contributors and only 2% held senior leadership roles in tech companies.
These disparities often contribute to high turnover among women developers, something that is proven to be bad for business. According to the report, only 20 percent of the developers stay on for four or more years. More than 55 percent said they were actively seeking a new role.
More and more, consumers are turning to online streaming services to fulfill their entertainment needs. And like the other burgeoning industries in this article, online video platforms also struggle with gender disparities. This included both the behind the scenes developers who work at the platforms and the creators who post on the platforms.
At the end of 2018, Forbes produced a list of the highest paid YouTube stars of the year and all ten of the YouTubers were men. Last year there was only one woman on the list. And behind the scenes, women make up only 30% of the employees at YouTube, putting the company behind other streaming services like SoundCloud, Spotify and Pandora.
Additionally video streaming services like Netflix have come under fire for not addressing gender pay disparities between actors in the videos they produce. Last year, Netflix was criticized when people found out the star of their show The Crown, Claire Foy, made less than her male co-star.
The kinds of gender disparities found across multiple industries is nothing new. But in order to find success in the current global economy, burgeoning industries must find ways to increase gender parity.
Photo by Søren Astrup Jørgensen on Unsplash.