Silicon Valley Discriminates Against Women, Even If They’re Better

Silicon Valley entrepreneur Vivek Wadhwa discovers that the famed “meritocracy” of Silicon Valley is a myth and that women are systematically discriminated against there, despite the fact that they’re more productive, on average, than their male counterparts. He has a plan to change the Valley.

Paul Solman: Silicon Valley entrepreneur Vivek Wadhwa is a widely heard voice on the value of immigration for the U.S. economy. We first featured him a year ago in “Man v. Machine,” a story on the automation of work and did so again on this page last fall on the threat posed by a programmable robot named Baxter.

An immigrant himself (from India), Wadhwa used to think Silicon Valley was a a paragon of open access: talent like his would inevitably prevail. But he has been writing and speaking lately about the Valley’s “myth of meritocracy.” All, he realized, was not as it seemed, and he followed up his dawning disillusionment with research, which he will publish soon. But his findings seemed so noteworthy, I asked if he would share them with us at the NewsHour. And so he has.

Vivek Wadhwa: Visit any company in the Valley, and you’ll see that it resembles the United Nations. At the Google cafeteria, they always serve Indian, Chinese and Mexican food; hamburgers and hot dogs are nowhere to be found. Indeed, my research team documented that 52 percent of startups in Silicon Valley during the recent tech boom were founded by immigrants — like me. So I used to call Silicon Valley the world’s greatest meritocracy.

This was before I moved to the Valley and my wife pointed out something strange: that practically all of the people at Silicon Valley’s big networking events were male. They were mostly white, Indian, or Chinese. Women, blacks and Hispanics were nowhere to be found. When I analyzed company founder data from the Kauffman Foundation, I was shocked to learn that only 3 percent of the tech firms were founded by women. When I looked at the executive teams of the Valley’s top tech firms, with a couple of notable exceptions, I couldn’t find any women technology heads. Even the management team of Apple didn’t have a single woman in it. And I learned that virtually all of Silicon Valley’s venture-capital firms are male dominated — the few women whom you find there are in either marketing or human resources. Indeed, of the 89 venture capitalists on the 2009 TheFunded list of top venture capitalists, only one was a woman.

So I was wrong; this is no meritocracy.

Since then, I have researched this topic in greater depth. When I analyzed data from my own studies on entrepreneurship, I was surprised to learn that there is virtually no difference in motivation between men and women entrepreneurs. Women start companies for the same reasons as men: because they want to build wealth and capitalize on business ideas, like the startup-company culture and are tired of working for others. Women entrepreneurs are as highly educated as their male counterparts, have the same early interest in starting their own business and learn the same valuable lessons from their work experience and from prior successes and failures.

This raised the question: Are women less competent as entrepreneurs than men? Are they not cut out for the rough-and-tumble world of entrepreneurship? The answer turned out to be none of this. An analysis performed by the Kauffman Foundation showed that women are more capital-efficient than men. Babson College’s Global Entrepreneurship Monitor found that women-led high-tech startups have lower failure rates than those led by men. Other research has shown that venture-backed companies run by women have annual revenues 12 percent higher than those by men and organizations that are the most inclusive of women in top management positions achieve a 35 percent higher return on equity and 34 percent higher total return to shareholders.

Could the education of women be the problem? Not according to data from the National Science Foundation. Girls now match boys in mathematical achievement. In the U.S., 140 women enroll in higher education for every 100 men who do. Women earn more than 50 percent of all bachelor’s and master’s degrees, and nearly 50 percent of all doctorates. Women participation in business and MBA programs has grown more than five-fold since the 1970s, and the increase in the number of engineering degrees granted to women is almost tenfold.

This shows that there isn’t a fundamental problem, and that things are moving in the right direction. I have also interviewed about 300 women in tech over the past three years, and my research team at Stanford University recently completed a survey of more than 500 women founders. We are still analyzing the complex findings (and will likely publish a paper in the summer). At a glance, though, the new research shows a distinct change in attitudes over time. Women are becoming more confident and assertive, and they are helping each other. Men are also beginning to mentor and coach women.

That’s not all. Many technologies are now advancing exponentially. We all know how computing is advancing — our computers get more powerful every year as prices drop. The same is happening in fields such as robotics, artificial intelligence, 3D printing, nanomaterials, medicine, and synthetic biology. This is making it possible for small teams to do what was once possible only for governments and large corporations to do: solve big problems. Starting exponential companies requires relatively small amounts of money, and entrepreneurs with cross-disciplinary knowledge and skills have the advantage. This plays to the strengths of women: they are in the catbird seat for the new era of innovation.

To encourage, inspire and educate women to become engineers, scientists and entrepreneurs — and help solve humanity’s grand challenges, I am myself taking advantage of an exponential technology: crowdsourcing. I plan to harness the genius of the crowd to produce a book about women at the frontier of technology. Along with journalist and author Farai Chediya and my lead researcher Neesha Bapat, we are planning to ask hundreds — possibly thousands — of women to co-author this book with us. We will presell the book on a crowdfunding site such as Indiegogo and donate all of the profits to fund the tuition of women through the Graduate Studies Program at Singularity University and to support women-led startups coming out of this program. This is a 10-week program designed for leaders who want to build innovative solutions to global grand challenges.

So Silicon Valley may not have been the perfect meritocracy, but there is hope that it will soon be, and that our women may save the world.

Vivek Wadhwa is Vice President of Research and Innovation at Singularity University, a fellow at Stanford Law School, and Director of Research at Duke University. He is also the author of an Economist Book of the Year for 2012–Immigrant Exodus. You can follow him on Twitter: @wadhwa.

This entry is cross-posted on the Rundown — NewsHour’s blog of news and insight.