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SYSTEM FAILURE: Black Technopreneurs Finding Deck Stacked Against Them

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SYSTEM FAILURE: Black Technopreneurs Finding Deck Stacked Against Them

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It doesn’t take a computer science degree to appreciate how quickly technology has evolved over the past few decades. From medical robots and virtual reality to cloud computing and artificial intelligence, technology has transformed modern society in record time. With the commoditization of personal computers and enterprise networks ― not to mention the internet, a mere Millennial having appeared in the form we know today in 1983 ― IT has mushroomed into a booming field, serving millions of new applications, large and small.

 But for everything the technology sector has advanced through those four decades – from commerce to entertainment to health care to communication – opportunities for Blacks in tech and tech startups aren’t one of them. 

A November 2022 article on CIOdive.com illustrates the wide delta between Black tech professionals and their counterparts. The piece cited statistics from a report by The Kapor Center and the NAACP which revealed Blacks made up 13% of the workforce in 2021 yet held just 3.7% of tech roles at large tech companies. This was slightly behind the percentage of Blacks who held executive leadership roles (4%) and a little more than half a percent behind the number of board seats held by Black executives. 

More sobering than that, the report noted how little progress was being made in correcting those numbers. Despite very public promises to improve diversity in its ranks, large tech companies saw the number of Black professionals in technical roles grow by 1% between 2014 and 2021.

 

Given these facts, it is probably no surprise that Black startups have also struggled to advance their enterprises, largely due to a venture capital drought that’s only worsening. CNBC reported in February that VC funding for Black startups, which already commands less than 2% of overall dollars annually, dropped 45% by the end of 2022, almost 10% more than the average. Once again, this decline came not long after banks, corporations and investment firms pledged to prioritize investing in Black-owned startups, claiming to have seen the light of inequity and systemic racism in the wake of George Floyd’s death at the hands of white Minneapolis police officers. Chauncey Holloman Pettis, director of the Arkansas Women’s Business Center at Winrock International, said such platitudes have not translated into meaningful action. 

“The reality in my experiences with my client base is there is a high level of shock that has hit the world since several high-profile incidents and even a desire by some to be allies,” she said. “However, we may set a percentage goal for our spend with minority and women-owned businesses and genuinely mean that goal when we set it. That does not mean that the same level of buy-in is happening when it’s time to go out and sign those businesses, promote those businesses or to be in the circles those businesses are in and invite them into the spaces where the procurement is happening.” 

TechCrunch.com reported the needle continues to move in the wrong direction on this measurement. After a record year in 2021 when Black firms raised $4.3 billion or about 1.3% of the total raised by all companies that year, 2022’s total was half that, about $2.3 billion or 1% of total funding awarded. In Q1 2023, Black tech ventures managed to snag less than 0.7% of the $45 billion awarded that quarter, or $312 million. 

Pettis said unfortunately such scenarios don’t come as much of a surprise anymore, given the higher standard to which Black technopreneurs are held when pursuing capital, be it investors or a loan from the bank. 

“Our female and people of color entrepreneurs have to prove more to financial loan officers that they can do the work that they’re proposing or attempting to get a loan for,” she said. “It’s not necessarily whether the financials check out or that the business plan is well-written. They have to prove more experience and credibility than their white male counterparts. In fact, ‘credibility’ doesn’t even seem like the right word; I would say it’s more like ‘believability.’”

The funding problem and its strangling effect on Black startups becomes even more pronounced when one considers the number of Black business owners, including those in the tech space, recently riding a historic boom. Technically reported between February 2020 and August 2021, Black entrepreneurs soared 40%, easily outpacing other demographic groups over the same time period, only to come crashing to Earth 18 months later impacting firms from Silicon Valley to The Natural State. 

As James Houston II, tech entrepreneur and educator in the Jacksonville School District, said, “In Arkansas, it’s easy to start a business. As far as getting business, that is where the issues lie.” 

Another challenge tech is facing when it comes to diversity is that the industry still hasn’t cracked the code on luring more young people of color to its ranks. Again, this is not for lack of effort; Arkansas made headlines in 2015 by mandating coding education in public schools. In 2021, several school districts across the state reorganized high schools as career academies with curriculums that specifically target career fields, including tech. 

While admirable, such initiatives will take time to pay off and, as Pettis said, by no means signify that technical education is accessible statewide to all. 

“I believe that talent is everywhere, opportunity is not,” Pettis said. “Getting that type of STEM programming in early public education, fairly distributing that programming amongst all public schools, including the redline communities, those efforts haven’t been done quite as well as they could have.

 “Also, the individuals who teach those classes, who can provide look-like leadership, are lacking. I personally know quite a few individuals who have started their own STEM-related businesses because they had fairly ferocious parents who put them in spaces where they could see that. If kids don’t see it growing up, they don’t consider it an option, which is unfortunate to our nation. Anytime a particular group is omitted from creating solutions, that community of thought goes with it.” 

Into this breach have stepped organizations and concerned individuals who are taking it upon themselves to help nurture the next generation of technopreneurs. Houston, for example, organized a program called Type Out which gave students in grades six through 11 an exposure to software development, networking and cybersecurity. The response was tremendous, but the free educational program funding has run out.

 “We created Type Out so that every student in our district or in our county could have access to this set of skills and learn computer science,” he said. “You’re not going to, for the most part, be able to get that at the school. Teaching is not set up that way and getting a computer scientist on staff is fairly difficult.” 

Rick “Yottabyte” Daniels is another technopreneur who has invested time and energy into providing role models and resources to Black founders and those who aspire to be through the tech summit Yottabyte Data Con. The 2023 event attracted 90 current and aspiring tech entrepreneurs.

 “It was a rainbow of Arkansans, people from all different ethnic backgrounds. At a tech conference, that’s beautiful,” he said. “We had people that want to get into it, they’re thinking about getting into it. We had your one-to three-year workers that came. We had founders there. We even had a handful of people who had been in the tech industry for a decade who were subject matter experts.” 

Daniels said the greatest opportunity for the future of Blacks in tech lies in a general strengthening of the relationships between the business community and the educational community in an effort to retain the best and brightest tech talent. 

“What often happens is you go to school and then when you’ve got to find a job you find out the dots haven’t been connected as well as they could be,” he said. “That’s when people decide they have to leave the state to have a career in tech and often they don’t come back.

 “I think we have to do a better job of teaching the tech skills the business community is looking to hire as well as expose students to the opportunities that they have here in Arkansas to be in tech or even to launch their own companies. I think that’s an important first step.”

By Dwain Hebda --

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