Yahoo Finance LinkedIn co-founder Reid Hoffman on diversity in Silicon Valley: 'It's top of mind, change is coming'
Silicon Valley is hard at work to improve an otherwise dismal historical performance on diversity, says very well-connected LinkedIn co-founder and Greylock Partners partner Reid Hoffman.
"I would say the primary good news is when I talk with nearly everybody in Silicon Valley, everybody, it's a top of mind issue. Everyone is working on it. Everyone is creating a dashboard with numbers and working toward it the same way that you work towards things business," Hoffman told Yahoo Finance Live. Hoffman is fresh off the announcement of two SPAC deals — one for transportation upstart Joby and another for digital home insurance player Hippo.
Hoffman said real change is coming to Silicon Valley's employee composition, it will just take some time for today's diversity work to shine through.
"I think we are already beginning to see some of it [the work on diversity]. I think you will see more and more each year... like these things have a little bit of a curve. The curve kind of starts slow and starts picking up. So I don't think it is immediately next year or the year after, but hopefully when you get to three years and five years, you say this problem is starting to even out and there is the impact and opportunity is reflected by the actual talent," Hoffman explained.
To be sure, there could only be one direction for Silicon Valley on diversity — up — as the numbers continue to be quite lackluster.
More than 80% of executives are white male across all large Silicon Valley firms, according to a recent research paper out of University of Massachusetts Amherst. Black men are a mere 3% of executives at 16 firms studied by the University.
"In large tech firms Asian men and women are concentrated in technical positions, but are less well represented in manager and executive positions. White women, in contrast, when compared to Asian men and women, are more common in managerial jobs," said the paper's authors Donald Tomaskovic-Devey and JooHee Han.
But Silicon Valley isn't alone in its diversity woes — corporate America more broadly also continues to not get the job done.
According to new findings from Bank of America strategist Haim Israel, there were no Black senior executives in any of the FTSE 100 companies. Women are gathering assets 1.5 times faster than men, BofA notes, but there are more men called "Dave" in the U.K.'s financial industry than women managing funds. Meanwhile, there are now only three Black chief executives in the Fortune 500.
BofA says racial inequality could cost the U.S. economy $1 trillion-$1.5 trillion in lost consumption and investment over the next decade if efforts aren't improved.
"D&I must go hand in hand. While public and corporate understanding of the importance of diversity has improved in recent years, we believe Inclusion hasn't and needs to be more widely promoted. COVID (flexible work from home arrangements, childcare support), Gen Z (hashtag activism, "clicktivists") and ESG assets (US$20 trillion over next 20 years) are just some of the catalysts that could change this," Israel's team contends.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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