Support 110 years of independent journalism.

  1. Business
18 December 2020

Can the tech sector fix its dangerous lack of diversity?

Commitments, statements of values and training have done little to change the unequal nature of the companies building our economic future.

By Laurie Clarke

Coinbase, a cryptocurrency exchange that enables users to trade digital currencies such as Bitcoin, announced yesterday that it had filed with the SEC to become the first Bitcoin-focused company to list on the stock market. This is big news for technology and business, at a time when Bitcoin is trading at unprecedented (but extremely volatile) prices. But Coinbase is also at the front of another, more concerning, trend in tech – one which raises questions about the kind of future such companies are building.

At a Coinbase all-staff meeting in June to discuss the company’s response to the unlawful killing of George Floyd and the worldwide protests against racism that followed, employees “walked out” (by closing their laptops) when CEO Brian Armstrong refused to say whether the company would publicly state that “black lives matter”. He later did so on his personal Twitter account, but in September he wrote a blog post in which he stated that company would not engage on ”societal issues” or “advocate for any particular causes”. The post was widely interpreted as being aimed at employees involved in the Black Lives Matter movement.

A week later, Armstrong offered any employee who disagreed with the policy what he called “a generous exit package”. Sixty employees – more than five per cent of the company’s workforce – left on the spot.

Tech Monitor: Why AI can’t be ethical without diversity Part of New Statesman Media Group

Then, in November, the New York Times spoke to 15 black former Coinbase employees who left the company or were fired between 2018 and 2019, and claimed that at least 11 of them had made a complaint about racist or discriminatory treatment. The employees claimed they had been stereotyped, excluded, and passed over for promotions in favour of less experienced white employees. Coinbase claimed that only three of the people to whom the NYT spoke had filed complaints during their time at the company.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday - from the New Statesman. The New Statesman's quick and essential guide to the news and politics of the day. Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.

“Most people of color working in tech know that there’s a diversity problem,” said Alysa Butler, a recruiting co-ordinator who had spent six months at the company, “but I’ve never experienced anything like Coinbase”.

Content from our partners
What is the point of inheritance tax?
Businesses must unlock the regional growth agenda
Why we must prioritise treating long-term health conditions

But Coinbase is far from the only tech company struggling to grow and nurture a diverse workforce. In the US, black people hold between 2 and 5.3 per cent of executive positions across the tech industry. In Silicon Valley, the proportion of black people in executive roles is around one per cent; black people make up 13.4 per cent of the US population. The lack of representation and experiences at work lead black people to leave jobs in tech at higher rates than white people.

Tech Monitor: Black representation in tech: what the figures don’t tell us Part of New Statesman Media Group

The endorsement of the Black Lives Matter movement by large tech companies such as Pinterest and Facebook was overshadowed by allegations of racism and dismissal of algorithmic bias from employees.

So how should companies address this systemic issue? In the US, the diversity training industry is booming, with companies spending more than $8bn a year. But there are signs this money is not being allocated in a way that actually creates change.

Nelarine Cornelius, professor of organisation studies at Queen Mary University of London, says diversity training hasn’t changed much in 30 years, and focuses largely on attempts to identify and undermine people’s underlying racial biases. But the usefulness of this is now being questioned. In 2016, a meta-analysis of nearly 500 studies by sociologists Frank Dobbin Alexandra Kalev showed that unconscious bias training is mostly unhelpful, and in some cases can even reinforce pre-existing biases.

Part of the problem, Cornelius says, is that companies are “just focusing on the training, rather than the context in which the training takes place…There’s no such thing as context-independent training.”

Some of the most important insights from Kalev and Dobbin’s study were that the most successful interventions for boosting a diverse workforce were “targeted college recruitment, mentoring programs, self-managed teams, and [diversity] task forces”. The study recommended managers should spend more time with female and minority workers, and promote social accountability. Diversity training itself should be optional, it found, or trainees can become resistant to it.

There is some evidence that having a diversity officer can lead to positive change in an organisation. But there is a danger that if this is the only high-ranking position held by a person of colour in the organisation, it can create an impression of tokenism.

“In the boardroom structure – and I’ve been to many boardroom meetings – the black person there is usually the head of diversity,” says Douglas Hamandishe, chief clinical information officer at health tech company ExtraMed. “That’s a token position. We don’t need that. People should be able to get jobs based upon their ability to perform the task, their passion, their enthusiasm, their drive…Those are the things that count.”

Tech Monitor: Where are the black CIOs in the tech sector? Part of New Statesman Media Group

Antiquated unconscious bias training lacks evidence, but a newly emergent field of diversity training is also attracting criticism. “Anti-racist” workplace training, spearheaded by the likes of Robin DiAngelo, author of the bestselling White Fragility, is grounded in the idea that workplace racism is best solved by instructing white people to interrogate their privilege, innate racial bias and complicity in a white supremacist system.

This ideology has its fair share of detractors. Associate professor of English and comparative literature at Columbia University, John McWhorter, has called DiAngelo’s book a “racist tract”. “Despite the sincere intentions of its author, the book diminishes black people in the name of dignifying us,” McWhorter writes in the Atlantic.

Also in the Atlantic, Saida Grundy, assistant professor of sociology and African American studies at Boston University, writes that “Anti-racism efforts that are watered down by ‘listening’ and ‘learning’ treat justice as though it can be acquired through the awakening of people’s hearts and minds — instead of through a clear-cut democratic process.”

She points out that companies like Amazon “have invited race scholars and writers to ‘help [them] unpack’ such topics as the American justice system and how to be an anti-racist ally”, while at the same time, black employees have accused Amazon of hypocrisy over its work with law enforcement agencies and highlighted the company’s poor treatment of minimum-wage workers and its union-busting efforts.

This last point is one that is almost never mentioned when companies talk about how much they value diversity: membership of a union is shown to be one of the most effective means of strengthening interracial relations in the workplace. A new study in the American Journal of Political Science finds that union membership made white workers more likely to support policies designed to benefit black Americans. Other interventions aimed at lifting the entire workplace, such as increasing minimum wages and pay transparency, have been found to disproportionately advantage workers of colour.

Tech companies, which make their fortunes in the digital economy, are prone to seeing the diversity problem as solvable through knowledge and introspection. But in the real world, concrete actions consistently come out on top.