I had a visceral reaction to this headline, “Education is the next startup Gold Rush, Silicon Valley will be at its heart”:
Already the epicenter of tech innovation and venture capital investment, San Francisco is poised to become heart of a new industry that will be powered by the Internet. And unlike me-too food apps and daily deals websites, education is more than a hot fad. American taxpayers invested more than $536 billion on K-12 education between 2005 and 2006, according to the U.S. Department of Education, with an additional $373 billion in taxes going to fund higher education nationwide. The educational pie is enormous, and anyone who can get his or her hands on even a small slice can expect to reap huge returns.
As an advocate for diversity, the report that venture capitalists hope to “reap huge returns” with taxpayer funds – our money – was a call to action. Indeed, without vigilance there is little chance minority-led startups will share in the huge returns.
The Minority Media and Telecommunications Council’s newly released report, “Minorities and High Tech Employment,” found that in Silicon Valley, African Americans and Hispanics represent 1.5 percent and 4.7 percent respectively of the workforce.
The lack of diversity impacts minority-led startups’ access to capital. A study by CB Insights found that VCs invest in startups led by founders with high tech experience. So it comes as no surprise that black founders received one percent of VC funds.
Three of the top six Silicon Valley companies – Apple, Oracle and Google – refuse to file reports on the demographic makeup of their employees. They claim release of EEO data “would cause ‘commercial harm’ by potentially revealing the company’s business strategy to competitors.”
Hewlett-Packard, Intel and Cisco Systems filed their EEO-1 reports kicking and screaming.
All six companies are major players in the educational technology sector. At ISTE 2011, their business strategies were on display for all to see.
Tellingly, there was a notable lack of diversity among the exhibitors.
Now along come VC-backed education startups. Their “trade secret” business strategy has slipped out from under their iPad Smart Cover.
As ed tech companies feed at the public trough, they will learn there is no free lunch. Advocates and activists will leverage relationships with school superintendents, school boards, community leaders and other stakeholders to ensure compliance with EEO reporting requirements.
In the foreword to the MMTC report, Prof. LaVonda Reed-Huff wrote:
An investigation conducted by the San Jose Mercury News in 2010 revealed significant disparities in the employment of African Americans, Hispanics, and women in ten of the 15 largest firms located in Silicon Valley, the leading high tech region in the country. Similar data indicate that such disparities exist across the national high tech sector. Collecting and analyzing this type of data is essential to calibrating policies aimed at altering these trends, which, if left alone, could become intractable in a sector that thrives on secrecy, relative insularity, and non-transparent business practices. As such, the reluctance of some of the leading Silicon Valley technology companies to release data regarding the composition of their workforces only contributes to existing uncertainty regarding the true extent of minority underrepresentation in the high-tech sector.