UK tech’s sad gender equality in five charts

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The UK tech industry has made great strides in improving the representation of women in the workforce, providing better funding opportunities for women and closing the gender pay gap. But despite all the progress in recent years, the data doesn’t lie – and it shows there’s still a long way to go.

Achieving gender parity in tech isn’t just a business advantage. Studies repeatedly show that companies with a better gender balance are more successful. The wider opportunity cost of excluding half the population is also significant. A recent report by Code First Girls and Natwest pointed out that if the UK can achieve gender parity in tech, it could add an additional £2.6 billion to the country’s economy.

International Women’s Day (IWD) is an annual opportunity for the industry to take stock and assess progress – or lack of progress – in advancing gender equality in the traditionally gender-dominated sector. men.

UKTN has compiled five charts to track progress and highlight key areas for improving women’s representation and gender equality in the UK tech industry.

The past year has been tough for startup funding at all levels. In the UK and around the world, the reality of economic headwinds such as soaring inflation and rising interest rates kicked in, causing investment in tech startups to slow in the second half of the year.

Despite this slowdown, companies founded by women continued to get a slightly larger share of equity investments than the year before, but the data is still grim. A report by Beauhurst, published in January, found that just 27% of equity deals in the UK went to startups with at least one of the founders being a woman.

This marks a small but significant increase from the 24% share of startups founded by women in the UK in 2021. The numbers, however, become less impressive when looking at the share of funding from startups with only women. women founders in 2022, which was only 9%. This figure was still, according to the report, a record in the UK over the past decade and was 3% higher than the previous year.

The share of funding from startups founded by women drops even more when looking at the percentage of the total sum invested rather than the number of deals, which in the UK was just 2%.

“Women founders are an integral part of the UK tech ecosystem, but we need more of them to create and build companies that can challenge the status quo and improve the world,” said Yvonne Bajela, partner of LocalGlobe.

“Incredible progress has been made so far and it’s important that we continue to champion and support female founders at every stage of their journey.”

The UK is often seen as Europe’s leading tech sector, frequently securing the highest levels of venture capital funding. It also ranks first for the worst gender pay gap for tech startups. For tech startups, it’s even worse. Data published by pay benchmarking platform Figures and recruitment platform 50inTech shows that women working in the UK tech industry are on average paid 74p for every pound earned by men, or a gender pay gap of 26%.

This figure, which is not adjusted for role and seniority, is worse than the UK gender pay gap across all sectors, which in 2022 stood at 14.9% . However, there are signs that he is heading in the right direction. The UK tech gender pay gap increased by 4p from a year earlier, a change of four percentage points from 30% to 26%. But it is still significantly behind the European average, which shows a difference of 19%.

Women in tech are paid less than men, but they are also less likely to work in the industry. A recent report on diversity in UK technology from Tech Talent Charter (TTC) found that 28% of tech workers are gender minorities (99.99% of respondents identified as women). This represents a slight increase of 1-2% over the previous year. However, that number drops to 22% when considering senior positions in UK technology.

The report pointed out that simply increasing the number of sexual minority applicants will not significantly solve the problem. Instead, he recommends ensuring that the company and industry culture is “the one that keeps them staying”.

“The progress made over the past 10 years to make the workplace more inclusive and fairer is very encouraging. These results, however, highlight the crucial role that organizations must play in promoting social justice,” said Dr Anne-Marie Imafidon MBE, co-founder of the Stemettes social initiative for women in STEM.

“It’s no longer just about attracting employees from diverse backgrounds, but about being actively transformational internally to ensure people stay and are promoted equitably.”

When it comes to later-stage tech companies in the UK, there is also a stark difference in the number of tech unicorns – private companies valued at over $1 billion – with founding teams including women by compared to companies founded by men.

Data released today by the newly created Department of Science, Innovation and Technology (DSIT) shows that of the 144 tech unicorns in the UK, only 9% (13 companies) had women founders. Among these 13 are Darktrace and Starling Bank.

DSIT, led by former DCMS boss Michelle Donelan, said gender inequality in Britain’s tech unicorns has prompted the department to undertake “extensive work to improve diversity in the sector”.

Yoram Wijngaarde, founder of Dealroom, which compiled the data for DSIT, said: “There is still a huge gap to fill as the vast majority of startups and funding continue to go to all-male teams. By focusing on this metric and developing talent in the digital technology sector, we should be able to make a difference. »

When it comes to femtech, the sector that includes startups supporting women’s health and wellbeing, funding has dropped significantly and may reflect a wider issue for women-founded businesses attracting investment in the UK. .

A recent report by industry monitoring firm Tracxn found that funding for femtech startups in the UK fell by 59% last year, from $132m (£111.3m) in 2021 to $54m (£45.5m) in 2022.

The report suggests that this decline is due to the unfortunate reality that startups founded by women struggle to secure funding beyond the early stages of business growth.

This is supported by the diversity of technology data from DSIT, which revealed that nearly 70% of investment deals in female-led startups in 2022 were part of seed rounds.

Additional reporting by Robert Scammell.

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