Dalberg and Intel released a new report that shows improving ethnic and gender diversity in the U.S. technology workforce represents a massive economic opportunity, one that could create $470 – $570Bn in new value for the tech industry, and could add 1.2 – 1.6% to national GDP.
Growth on this scale would have major implications for both the labor and consumer markets, supporting job creation and better products. And yet, the tech industry is not drawing upon the full pool of available talent. While it is no secret that women and racial/ethnic minorities are underrepresented at tech companies—by 19 percentage points for women compared to their presence in the US labor force; by 16 – 18 percentage points for Hispanics, African Americans, and Native Americans—it may come as a surprise to learn how little these figures have changed in the last 15 years.
For technical roles, female representation falls to 12 percent—far short of the proportion of women working in many other occupations traditionally viewed as male-dominated (to name a handful: oil drilling, metal forging, and investment management). Tech leaders recognize this gap and are investing to shrink it, yet racial/ethnic minority representation has only improved by 1 – 2 percentage points over fifteen years, and female representation has fallen by one percentage point. This report offers first-of-its-kind analysis of the economic impact of improving diversity in the tech sector, based on diversity data from nearly 170 companies.
These findings indicate clear correlations – though not necessarily causation – between more diverse tech company workforces and higher revenues, profits, and market value. The data show that every incremental percentage point in African American and Hispanic representation is linked with a three-percentage-point increase in revenues, meaning that the sector could generate an additional $300 – $370Bn each year if the racial/ethnic diversity of tech companies’ workforces reflected that of the talent pool. Similarly, closing the gap in female leadership representation could boost enterprise value by $320 – $390Bn across the sector. This analysis is only now possible because a number of tech companies—including such leading firms as Apple, Yahoo, and Facebook among others—have committed to publicly releasing diversity data.