How to ensure tech economies are as diverse as their regions? Focus on early talent and local funding

Social justice-minded tech stakeholders often wax poetic on the importance of diversity, equity and inclusion in the majority-white industry. But if intentional steps aren’t being taken to ensure a local tech economy’s constituents look like those in the region where it’s based, then it’s not serving that region’s needs, and that feel-good language is just lip service.

But what are the gaps and solutions to building more equitable ecosystems, from technologists to entrepreneurs? And how can stakeholders shift mindsets to prioritize the work it takes to get there?

Focus on early talent

It wouldn’t be possible to change the way the tech ecosystem looks if there isn’t a workforce to support it with adequate tech education. Ecosystem leaders need to think about where the next generation of tech workers is coming from, and how to train them.

Tony Green, chief scientific officer at Philly’s Ben Franklin Technology Partners, believed there are two approaches: Start with education and create opportunities for people to learn new skills. During a Builders Conference panel at Philly Tech Week 2023 presented by Comcast, he pointed to two Greater Philadelphia programs, youth nonprofit Coded by Kids and coding bootcamp Zip Code Wilmington, as examples of where this work is happening now.

He also cited the importance of looking at company management teams, because investors invest in the team just as much, if not more, than they invest in the technology.

“Where are we getting this next generation of management teams? How are we going to build that? A lot of people think you can import it by bringing in more venture money,” he said. “We’re gonna have to build this organically. Each region is going to have to develop programs and opportunities to build that next generation of management.” 

(L to R) Moderator Sameer Rao with panelists Jeff Bodle, Denita Henderson, Tony Green and Mike Ravenscroft. (Photo by Sarah Huffman)

Denita Henderson, managing director of the University of Pennsylvania-associated Pennovation Works, said the earlier you expose young people to science and technology, the easier it is for them to understand it. The goal is that eventually, people who had early exposure and now seek to start their own companies will be trying to connect with funders or other important people in the tech ecosystem, and it won’t be as hard to communicate with them because they learned it early on.

“How do we get people into a room where maybe others look like them, can talk to them about how to get over the hurdle to really reach the other communities?” she said. “If we start earlier, I think we can start to close the gap long term. Just availing a diverse set of leaders to emerging leaders will help create better connectivity.”

Jeff Bodle, a startup lawyer and partner at Morgan Lewis, noted that it’s important to embrace and support local visionary entrepreneurs. Investment from outside a given region is important, but support from within the region is essential to keeping talent here.

Return on investment can be more than just financial

For those looking to start their own companies, Henderson said funding opportunities matter, especially for Black and brown communities who may not have the network to get their first investments from family or friends. More pre-seed and early-stage funding opportunities would help inclusivity.

Mike Ravenscroft, managing director of the Maryland Momentum Fund, said there needs to altogether be a better way to fund early-stage companies. There is a swath of underserved founders who don’t find a fit with existing methods of seeking funding through grant money or venture capital, for example.

“I think we need investors, and maybe it’s just more state dollars, that are going in and investing but expecting like a 1x or a 2x [return]” he said, “and that’s fine as long as it’s being funded in perpetuity. You can grow and enable a lot of businesses to flourish that way.”

Henderson added that return on investment doesn’t have to just be financial, though — it could be job growth or reducing societal issues, such as education gaps or crime.

“Economic return as the measure more so than just financial return. And there are many ways to measure what those outcomes look like,” she said. “At Penn, we used to have a moniker that said ‘Inclusion, innovation and impact.’ Those are the things we’re measuring. What’s the impact of what we’re doing?”