How Big Exactly Is Tech’s Diversity Problem? No One Really Knows

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It’s easy to see that tech has a diversity problem, but the statistics on how many women and minorities actually work in the industry are far from reliable. We need better data, says the manager of Code for All.

By Jessica Stillman (Editor, Women 2.0)

You’ve probably heard that just 3% of VC-backed teams are all female. Perhaps you’ve been told that only 1-in-14 tech industry workers in Silicon Valley is black or latino. These statistics paint a pretty grim picture of the industry’s diversity problem, but where do they even come from?

Geeks love hard data so it may surprise you to learn that many commonly cited data points about women and minorities in tech actually rest on some very shaky statistical foundations.That’s the message of a recent post by Catherine Bracy who runs Code for All, Code for America’s international program, on NPR’s all tech considered. She writes:

These data, especially the data about founder race and gender, aren’t very good.

The figures about funding come from a revealing and important report by CB Insights that was published in 2010, but the firm hasn’t updated the report since. The methodology it uses for deriving founder race and gender is based on an algorithm that uses census data to predict whether a name belongs to a man or a woman, an African-American or an Asian person. This works pretty well determining gender, but you can imagine how difficult it is to determine whether someone is black based on a last name.

Pete Warden, a developer/entrepreneur and friend of mine, was curious whether we could update the data using the CrunchBase API (CrunchBase is a site that aggregates information about startups and their funders). He used an algorithm similar to the one used by CB Insights that checks against the census data and found that 7 percent of Silicon Valley founders receiving funding in 2012 were African-American. Except when he spot-checked the top 10 likeliest funders to be black based on their names, none of them were.

And the numbers on women can be wonky too, Bracy reports. Only 3% of VC money goes to female teams in Silicon Valley but 31% of investment dollars in Massachusetts flow to women. Is there something weird in the water in Boston, genuine progress in the startup scene there, or is there a mistake in the number crunching? “We can’t answer these questions without investing in better data collection and analysis,” Bracy concludes before calling for better numbers. Check out the complete post for more details.

How can we get a more accurate picture of tech’s diversity problem?

Jessica Stillman is an editor at Women 2.0 and a freelance writer with interests in unconventional career paths, generational differences, and the future of work. She writes a daily column for Inc.com and has blogged for CBS MoneyWatch, GigaOM and Brazen Careerist, among others. Follow her on Twitter at @entrylevelrebel.