Change from within: How the CTA could bring diversity to the tech industry

CES 2018 Show Floor

With a sea of white, male faces as homogeneous as Wonder Bread, tech has an inclusivity problem – a fact as plain-vanilla clear as the skin inside all of those cushy Allbirds shoes. The best solution may come not from the promises of politicians or lofty dreams of tech CEOs but from the Consumer Technology Association (CTA), the industry trade group behind CES, the annual gadgets and gizmos festival that takes over Las Vegas each January.

“For innovation to reach its fullest potential, different voices and perspectives must have an opportunity to come together in our workforce,” said Tiffany Moore, senior vice president of political and industry affairs for the trade group. “CTA is committed to finding solutions through education, investment, membership, and leading by example.”

With a sea of white, male faces as homogeneous as Wonder Bread, tech has an inclusivity problem

To push for change, the CTA unveiled a variety of well-thought-out new initiatives and policies at a luncheon event in New York City on July 16, which may have been buried by the news that the big gadget show will now feature a few sex toys. The show itself will introduce an “Innovation for All” track, featuring sessions with senior diversity officials on the business case for diversity. A team from the CTA will also curate a diversity roundtable and reception at the show, and the group made official a partnership with The Female Quotient, which will host an FQ Lounge to serve as “the unplugged space for panel conversations to advance equality.”

Leading the news were details on a new $10 million fund built in partnership with venture capital firms that invest in women, people of color, and other underrepresented entrepreneurs. The CTA announced the first two VC firms it will invest in: Harlem Capital Partners and SoGal Ventures.

Women represent 30% of the tech workers in America, Moore noted, and people of color – particularly African Americans – represent just 7%, while Hispanics represent 8%.

“That is unacceptable,” Moore said bluntly. “We are committed to reflecting the tech workforce that we would like to see.”

Funding for the next generation

The CTA is a nonprofit organization, but like universities, the group has money to invest, though it declined Digital Trends requests to clarify precisely how much money it invested in each firm. Still, it’s hardly chump change, according to the two funds receiving the resources.

“These are very significant for funds of our size,” explained Elizabeth Galbut, Founding Partner of SoGal Ventures. “It’s really hard to raise money as a first-time fund, especially as women and people of color. So it’s a sizeable, meaningful investment.” SoGal is the first female-led millennial venture capital firm, and it targets early-stage investment in female led businesses in the U.S. and Asia. Harlem Capital Partners is a minority-owned early-stage venture capital firm that targets diverse entrepreneurs as well. It’s mission: To invest in 1,000 diverse founders over the next 20 years.

What led these entrepreneurs to launch funds with such targeted missions?

“We were seeing people of color were not raising as much as they wanted. So if they wanted to raise a million dollars, they were only raising $300,000. There weren’t enough people writing big enough checks,” explained Henri Pierre-Jacques, managing partner at Harlem Capital Partners. “And it was taking them months to do it.”

Galbut says she and co-founder Pocket Sun launched SoGal in response to the lack of diversity among the guest lecturing staff at USC. Sun was attending school there, and  couldn’t believe what she saw.

“She’s a woman, she’s an LGBTQ advocate, she’s an immigrant … there’s nobody any of her professors brought in that looked like her.”

“None of her professors brought in any women to speak, either on the entrepreneurship side or on the venture capital side. She’s a woman, she’s an LGBTQ advocate, she’s an immigrant … there’s nobody any of her professors brought in that looked like her,” Galbut said.

“And you can’t be what you can’t see, right?”

The CTA will act in an informal advisory role to the funds, which will be free to invest as they see fit.

New policies, for new faces

A McKinsey & Company study noted that diverse companies produce higher returns – 34% higher, to be specific. It’s a simple stat, but it’s also a simple fact. So why hasn’t the tech industry embraced it?

The CTA intends to push the tech industry forward by focusing on four areas: First, there’s an effort to create a diverse entrepreneurial ecosystem, to ensure that money isn’t simply shunted to more people who precisely resemble the existing tech industry. Without a pathway to change, there will be no change, in other words.

Second, the group plans to focus on STEM education, to ensure that there is a pipeline that broadly represents the society we live in, with particular emphasis on young kids (and girls) of color. In the not too distant future, all jobs will be tech jobs; everyone should be trained equally to be part of the workforce of tomorrow. The group announced a partnership with the Boys and Girls Club of Greater Washington in April to help local students better understand the career opportunities the tech field offers.

But change needs to occur within the existing tech landscape as well. To that end, the CTA pledged to work with its 2,000 member companies to highlight best practices for diversity and inclusivity.

“One of the things that I do appreciate about the tech industry is that we may not do it well, but we will show our work,” Moore said. “And I think that’s something specific to the tech industry that’s helping to improve the conversation. After all, if Google and Microsoft and Apple didn’t publish annual reports spelling out how diverse their workforces were, we would have far less insight into the scope of the issue.

Finally, the company pledged to put its money where its mouth is, announcing the $10 million fund in January at CES 2019 and revealing the first two funds on July 16. Beyond that, the group pledged to act responsibly in order to set the best example: The CTA won’t participate in all-male panels, for example, and it tries to inject diversity where it can, suggesting experts to round out those panels. And don’t forget the partnership with the Boys and Girls Club.

As for setting a good example, look no further than the CTA itself, a group that stands in stark contrast to the tech industry it represents. Of the seven members of the executive team, four are female, for example, and the group is majority female overall, noted Jean Foster, vice president of marketing and communications for the CTA.

“We are committed to fostering greater diversity and inclusion in the tech sector — we believe it’s just a good thing for innovation. We need different voices and different perspectives to drive innovation,” Foster said.

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