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New boom, same boardroom: breaking down the tech start-up gender gap

Cite Magazine
Issue 28 - Summer 2016/17

Post mining boom, Australia’s economy is transforming, but a gender gap persists. In the bourgeoning world of tech start-ups, women are massively underrepresented. Why, and how do we solve it? Yvette Tulloch investigates.

image of android phone, laptop and female and hand holding a pen.
Image credit: Pixabay

As the golden years of the mining boom fade fast in Australia’s rearview mirror, Prime Minister Turnbull’s ‘ideas boom’ looms ahead. Digital start-ups and innovative technologies are paving the road forward, supported by the government’s national innovation and science agenda. But as we hurtle past the falling incomes and towards the hope of economic sanctuary, an unwanted passenger is riding shotgun: the gender gap.

For every 20 male tech founders in WA there are just three female founders. If this is the industry the government sees as our next boom, it doesn’t take a genius to see that women won’t benefit equally from it. So what can we do to address this disparity?

The reasons for gender disparity within the tech start-up sector are complex and varied. A lack of female STEM graduates (university graduates of disciplines in science, technology engineering and maths) is often cited as a systemic issue affecting tech start-ups. But the percentage of female tech start-up founders in Perth (14.7 per cent) is well below the national average of female STEM employment (28 percent in 2011), suggesting the barriers faced are more than just a lack of tech expertise.

“The lack of diversity in the Perth start-up sector means that many programs designed to help entrepreneurs seem to be built for the male psyche.”

In 2015, a survey of female tech entrepreneurs in Australia found that in addition to a lack of expertise, a lack of supportive networks and confidence were the top challenges they faced.

Dr Sam Hall is one of the few female founders of tech start-ups in Perth. Her company, Rate My Space, was developed with colleague Dr Vanessa Rauland and provides an online platform that allows employees to provide feedback on their workplaces to highlight issues affecting productivity, health and wellbeing. Hall says that from a young age, women are taught not to take risks or break rules.

“I was taught to be such a ‘good girl’ when I was young, but when it comes to business – especially tech – I have to step into the unknown, I have to take risks,” she says.

Like many other female tech entrepreneurs, Hall doesn’t have a background in tech, hiring a developer to take care of that side of things. “Not having a tech background but working in a tech industry means you are out of your comfort zone 24 hours a day – and you have to be okay with that.”

Yet Hall notes that men in the same position seem to navigate the unknown a little more easily – a fact she puts down to increased confidence.

“I know guys who have started tech companies but don’t necessarily have a tech background, and they seem to be more comfortable taking risks than women,” she reflects. “They tell me, ‘Yeah, I flew to America and just engaged with a few people and it worked’ and I think to myself, there’s no way I’m going to spend $3,000 to fly to America into an unknown – I’m a lot more calculated in my risk-taking.”

Profit wise, companies with at least one female founder performed 63 per cent better than all-male companies. Harvard Business Review.

For women, then, Hall feels it’s important that they are supported and encouraged to take more risks, albeit smart risks. Yet she notes that the start-up network in Perth is predominantly male, which can prove challenging for female tech entrepreneurs needing mentorship and support.

“The lack of diversity in the Perth start-up sector means that many programs designed to help entrepreneurs seem to be built for the male psyche,” says Hall.

“They hold an underlying message that as an entrepreneur you have to work 24/7, you have to sacrifice. As a woman walking into that, you immediately assess all the things in your life – such as family duties or childcare, which although we like to say things are changing, we’re still at the point where it’s the woman’s responsibility to be the primary carer – and think, I can’t commit to that, it’s not possible.”

This lack of diversity also has a ripple effect through the industry.

“I noticed it pulling together the advisory board for Rate My Space. I have all men on there. I don’t actually have any strong female role models in my life that I could invite onto the advisory board. And it really struck me,” says Hall.

“I’d never even noticed before that I’m mainly meeting and engaging with men when networking. You just kind of accept that that’s the norm. And I think it’s up to all the tech companies as they are growing to make sure they are diverse – and that extends to diversity in all elements, as well as gender.”

Research shows that diversity equates to reduced fraudulent behaviour and increased returns on investment. According to the Harvard Business Review, high-performing investments tend to have at least one female founder. In fact, these companies performed 63 per cent better than investments with all-male founding teams. Interestingly, there is speculation that this success may be due to the more calculated risk-taking behaviours of women, versus men who may be more prone to overconfidence.

Gender diversity may also be contributing to more than just profits. In recent years, there has been a growth in socially and environmentally driven tech start-ups, and Hall links it to a growing number of female entrepreneurs.

“In Perth, we’re seeing a lot of growth in social enterprises and environmental companies, particularly those founded by women,” she notes.

But while start-ups with a social or environmental focus are great for society, they’re not as highly remunerated as the traditional profit-driven models. In simple terms, although we may eventually achieve gender parity in tech start-ups, the gender pay gap may continue.

Associate Professor Siobhan Austen, Co-Director of the Women in Social and Economic Research cluster at the Curtin Business School, says that the gendered nature of our society and economy means caring or socially driven roles just aren’t as rewarded as other work.

“The way the economy operates, particular forms of activity seem to be more highly rewarded or promoted and have greater chance of success,” explains Austen. “And it just so happens – or maybe it’s not so coincidentally – the more rewarded activities seem to have a higher proportion of men and the ones that don’t seem to have more women.”

She suggests that this is due to women being socialised into caring types of occupations or roles, which historically have occurred in the home or outside the formal economy and therefore have not been linked to high levels of financial remuneration.

“What is apparent is that when some of those caring activities occur within the formal labour market, those historical attitudes seem to carry over as well,” she notes.

To solve the gender difference, Austen says that one solution often proposed is to encourage women to become more like men. That is, if women want to earn more, they should work in roles or industries that are more likely to have higher remuneration: think finance, mining ­– or for-profit tech start-ups.

But she questions if that’s really the best way forward.

“Do we want women to adopt the more traditionally masculine behaviours, or do we want to find ways that those different aspects of our shared humanity are reflected in the way the economy ultimately operates?” she asks.

“On the one hand, it’s important to talk to young women about why they’re shutting out STEM subjects. Is it because their role models are limited or because they don’t feel it fits within their own image of what it is to be a woman? But I think the other challenge is to change the system that is rewarding one type of industry or business model more than others, when both are equally necessary for the good of society. And this will have a broader effect of allowing anyone, regardless of gender, to think about more diverse ways of doing business.”

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