The term “inclusion” has, by now, been added to the everyday language of the tech and innovation experts who actively pursue the goal of creating a diverse European startup landscape. But for many, it still remains a buzzword that does not have a solid best practice scenario.
In this article, we are going to demystify inclusion, provide you with the most important statistics that speak to the positive impact of inclusion on businesses, and finally, make a case for inclusion as the not-so-secret ingredient that can make the future of tech and innovation ecosystem something to look forward to.
What does inclusion mean?
Inclusion, in most forms, refers to going beyond representative hiring practices, and into how individuals are: empowered, involved, and able to have their needs met. More simply put, “inclusion in the workplace is about ensuring that everyone feels valued and respected as an individual”.
This is where for many the easy part ends and confusion starts.
Inclusion is nuanced and relative, influenced by a multitude of factors. The best way to approach the topic of inclusion is to make peace with the fact that it will always be a process that relies on dialogue and evolves alongside your new and existing employees.
For example, these 20 different types of inclusions have been identified through the lenses of extrinsic and intrinsic needs, thus considering a person’s unique wants and conditions to truly feel recognised. It is safe to say that with every new perspective being added to the team, your strategy of creating an inclusive company will be revisited.
The experience of inclusion comes from delicately balancing needs for a sense of belonging in the workplace (forming and maintaining a strong sense of acceptance by and a connection and stable relationships with others) and individuation (being seen and understood as an individual).
The type of inclusion your employees want to see to feel valued and happy at work will also be different based on your industry. This translates to different barriers to participation.
For example, it is a well-known fact that Silicon Valley’s tech scene is dominated by white men, who make up the majority of the workforce and leadership positions. (Source: Is Silicon Valley Tech Diversity Possible Now?, Center for Employment Equity, University of Massachusetts).
Source: Share of Employees at Silicon Valley’s Largest Technology Companies, by Race & Ethnicity by Silicon Valley Institute for Regional Studies, 2021. The analysis includes the 20 largest technology companies.
However, a less-known fact is that compared to white and Asian students, Black and Hispanic/Latino learners have far less access to computer science degrees or after-school programs. White and Asian learners, for example, are 1.3 – 2 times more likely to go to a school where there is a robotics club offered. (Source: Written Testimony of Kweilin Ellingrud Partner, McKinsey & Company and co-author of Power of Parity work on the gender gap). Low-income students and students of colour are 12x less likely to have access to Computer Science courses in their high schools (Source: the Leaky Tech Pipeline). This has an inadvertent effect on recruiters, notably from the “big five” of Apple, Microsoft and Google Facebook and Amazon or adjacent and spinout tech companies, looking at specific educational backgrounds, aligning assessment questions with prominent tech programs, and becoming biased towards graduates from universities and schools on the resumes of their existing employees. Thus, affinity bias becomes ingrained in the culture of Silicon Valley, and the perception of a “pipeline problem” persists.
Perhaps the most surprising pattern involves so-called legacy students, those who attend the same college that their parents did. At the elite colleges that the researchers studied, legacy students had stronger academic qualifications on average than nonlegacy students. Similarly, graduates of private high schools had stronger academic records on average than graduates of public high schools or Catholic schools. These stellar academic backgrounds predict later success. Highly qualified affluent students tend to excel in college and afterward.
Source: 10 types of unconscious hiring bias causing unfair screening infographic by Equalture
But a truly diverse and inclusive environment should look beyond racial and ethnic backgrounds, according to Anthony D. Mays, and also include other forms of diversity – including belief systems – to be inclusive to the whole of individuals, and not just those aspects that individuals are born with.
” A wide range of backgrounds would encourage “companies to push their products in a direction that’s going to appeal to more people, because the people working at the companies are themselves more representative of the broader population.”
The fabled “culture fit” introduced in the tech ecosystem and propagated as one of the elements propelling innovation all around the world is responsible for exclusionary hiring practices. Why? Because the implication of cultural fit is that the new hire needs to seamlessly integrate into the existing company structure – not challenge it.
“Hiring for cultural fit tends to favour the status quo in the company, whether that relates to race, gender, age, socioeconomic level or even lacrosse abilities. That makes it harder for anyone who doesn’t ‘fit the mould’ to get into sectors where they are currently under-represented.”
In particular, tech and innovation firms will often look for younger employees to match the company’s energy. However, they are losing an opportunity to increase their competitiveness as age diversity in high-tech firms with a relatively young workforce increases firm innovation.
“Based on data on 2,900 founders of new ventures in Germany in 2008–2017, we found that for every ten more years of age increases a founder’s likelihood to introduce a market novelty by up to 30 percent. Thus, those late-career entrepreneurs who are highly innovation-oriented and managerially experienced are more than three times more likely to introduce market novelties than the sample average.”
As a result, companies with homogenous cultures tend to demonstrate less flexibility and resilience in the face of unexpected situations. For example, as it happened with COVID.
The State of Inclusion in Europe
But where is Europe currently when it comes to inclusion efforts?
As a whole, Europe recognizes the importance of fostering an inclusive environment in both the public and private sectors. By doubling its share of women employees, this industry has the potential to boost its GDP by a jaw-dropping range of 260 to 600 billion euros by 2027. That’s not all – adding 1.6 to 3.9 million more women to the workforce would also bridge the talent gap. And here’s an interesting fact: studies have detailed that more gender-diverse organizations outperform their peers by up to 25%, and that diverse and inclusive organizations are more resilient in turbulent times.
However, while inclusion goes far beyond representation, as we already touched upon, it is still worth noting that in Europe, the lack of diverse representation is still a big problem. For example, in Germany, only 20.3% of startup founders are women, and the founders who are most likely to get funding are those that attend the most exclusive universities. While women held just 22% of tech roles across Europe, 41% of women in tech were affected by layoffs that occurred from October 2022 until February 2023. Even when the tech and innovation industry calls for more women, women in STEM face prejudice on the basis of perceived skills. In one of the largest studies to date on gender bias, researchers compared acceptance rates of contributions from men versus women in an open-source software community. The results show that women’s contributions tend to be accepted more often than men’s. However, women’s acceptance rates are higher only when they are not identifiable as women. The results suggest that although women on GitHub may be more competent overall, bias against them exists nonetheless.
This shows us that there is a long way to go to reach representation, let alone inclusion.
“Diversity is about representation or the make-up of an entity. Inclusion is about how well the contributions, presence and perspectives of different groups of people are valued and integrated into an environment.”
When it comes to strategy towards broadening opportunities for talent, currently, 3 out of 4 organizations in Europe attribute budgeting toward diversity, equity and inclusion efforts, but over ⅓ of companies have no strategy in place for how they will utilize this budget to make a more inclusive workspace.
The Cost of Exclusion
When we talk about the advantages of inclusion, it is paramount that we also highlight the cost of exclusion.
The world we live in today recognizes the importance of inclusion and the damaging effects of exclusion. It’s not just about fairness; there’s a real cost involved when certain groups are left out of the workforce. Let’s take a look at some eye-opening numbers.
“Business leaders and designers increasingly recognize that their customers occupy a common spectrum of abilities and aptitudes across various areas rather than existing in two separate camps.”
Craig Moss, Research Manager for Scope, the disability equality charity in England and Wales
The International Labour Organization (ILO) revealed in their 2022 report that excluding people with disabilities from employment leads to economic losses ranging from 3 to 7 percent of the global gross domestic product (GDP). That’s a significant chunk of money that could be contributing to the overall prosperity of nations. According to Scope, the disability equality charity in England and Wales, the UK transport businesses lose £42 million per month ignoring the needs of disabled people.
Source: Update 2023: Data about The Purple Pound infographic by the Purple Goat Agency
Gender discrimination is another area where exclusion carries a hefty price tag. Research from the OECD estimates that current levels of gender discrimination cost up to a staggering US$12 trillion, or 16 percent of the world’s income (Ferrant and Kolev 2016). Imagine the economic growth that could be unlocked if we dismantled these barriers and created a level playing field for all genders.
Also parents, and primarily women, who assume the role of caregivers for children, will face the pay penalty for taking time off work during parental leave. According to a report from the Royal Bank of Canada, women are paid less than they would otherwise have been for up to five years after giving birth. A study by the Equality and Human Rights Commission found that 77% of working mothers surveyed in the UK had potentially discriminatory or negative experiences. Men tend to increase their work hours and receive a bonus when they have children, a phenomenon known as the “fatherhood wage premium.”
A 2023 American study of 95,435 physicians found that marriage and children were associated with a greater earnings penalty for female physicians primarily because of fewer hours worked. Addressing the barriers that lead to women working fewer hours could contribute to a reduction in the male-female earnings gap while helping to expand the effective physician workforce.
“In a talent market where resignations are outpacing layoffs, flexibility is a key (and cost-effective) competitive advantage–and not just for recruiting and retaining women. A recent study found that fathers spent more hours with their families during the pandemic, and would like to keep it that way. When given the option to work remotely, nine in ten workers–of all genders—take advantage of it. In addition, 21 percent of job hunters leave for more flexibility, proving that punitive cultures don’t discourage employees from using these policies; they just push them out the door.”
Reshma Saujani, the founder of Moms First and Girls Who Code
All that being said, imagine what could happen if companies designed work environments to allow for flexibility in working hours to make childcare possible; created accessible spaces, or simply offered fully remote work for people with mobility issues. And suddenly, the talent pool is much bigger than initially thought. Inclusion is not about revolutionary and drastic changes – rather, it’s about giving everyone a chance to contribute their skills and talents to your company while navigating their unique life situations.
But the cost of exclusion extends way beyond the monetary dimension.
Inclusive Innovation and Technology
The topic of inclusion has often been raised in terms of tech and innovation solutions, specifically how many innovations were inadvertently exclusionary and continue to serve a standard user archetype. For example, white men or able-bodied users.
With recent research being what we turn to in order to understand where we are at regarding inclusion in today’s world, it is often overlooked that research itself is inherently exclusionary, primarily conducted by white men, studying white men. Much of this is due to the praise and valuation of quantitative research above qualitative, which means excluding the voices of those who might not otherwise be heard. Bringing power back into qualitative research and realizing that insights can be found without needing to always compare results to other groups is a key factor in driving forward more inclusive research and a more inclusive society.
“Gender, race, and age biases persist in clinical trials for life-saving vaccines and drugs. Although the FDA’s 2020 Drug Trials Snapshots report shows that women made up >50% of drug trial participants, overall—among both women and men—only 8% of all trial participants were Black or African American, 11% were Hispanic, and 30% were over the age of 65. Pregnant people were excluded from COVID vaccine trials, leading to vaccine hesitancy among this population—even though global studies showed that they face significantly higher mortality rates from COVID-19.”
The incredible AI boom and the resulting AI rat race see companies accelerating the testing period to release competitive AI-based tools. However, the haste in staying ahead of the curve might lead to innovations that aggravate exclusion instead of creating more accessibility.
“Risks such as algorithmic discrimination, lack of transparency and unreliable performance are increasingly the causes of AI failures. Critically, the start-up’s culture — the values, people and processes that govern its use of data and AI — is arguably the best indicator of its long-term value as an acquisition. Clarity on these criteria is needed for both acquirers and startups, from the beginning of their conversations.”
The Georgia Institute of Technology studied state-of-the-art object-detection models, like those used by self-driving cars, and their capability to detect people from different demographic groups. The result? Detection was five percentage points less accurate, on average, for the dark-skinned group. That disparity persisted even when researchers controlled for variables like the time of day in images or the occasionally obstructed view of pedestrians. AI tools for optimising hiring processes will perpetuate bias if the data used to train an algorithm is largely information about white men.
“ We design for what we know & create solutions for people that are familiar to us. Currently, the European transport sector counts around 80% male workers. It’s no surprise that users of new innovations in mobility are mainly men for example ~80% in sharing services. By including all people’s needs, we create products for all & not only the creators. Human-centered approaches create safer but also more profitable products, unlocking untapped potential and attracting new target groups.”
Claudia Falkinger, Why data needs to be more human-centred, TEDxSarajevo
It is no secret that in the health department, men and women will have different needs throughout their lives. However, it’s women who will often be misdiagnosed or not diagnosed on time to prevent serious health issues. According to a large study by researchers at the University of Copenhagen, on average, women received cancer diagnoses 2.5 years after men. They received diagnoses for metabolic diseases like diabetes 4.5 years later. Male bias in the field of medicine is credited as the reason for not only misdiagnosing women but going as far as excluding women from large health studies.
“Untreated menopause is taking a toll not only on women but also on the U.S. healthcare system, according to a recent study commissioned by Gennev, a leading virtual menopause clinic provider. The study found that medical and prescription costs for women aged 45 to 54 experiencing menopause are 47 percent higher on average compared to women in the same age group without menopause.”
In the world of healthtech startups, it’s surprising to know that only 9% of them are founded by women. Even when we look at the partners within healthtech companies, women make up just 11%. The healthcare industry as a whole shows a similar pattern. Despite women representing over 70% of the healthcare workforce worldwide, their presence in leadership roles is limited. Shockingly, only three out of every ten C-level positions in healthcare are held by women, and a mere 13% of CEOs are women.
Devastatingly, the lack of inclusion of women in healthtech has resulted in products that are not adept at diagnosing and treating women. Women are often misdiagnosed with psychological symptoms when experiencing chronic pain. And in the case of heart attacks, women are 50 percent more likely than men to be misdiagnosed following a heart attack, and therefore and more likely than men to die from heart attacks. The system is outdated, and even still considers women’s health to be a niche market, despite half of the world’s population being women
Inclusion in Action – Women in Healthtech
That’s where the FemTech revolution comes in. FemTech companies are making breakthroughs in improving care delivery, enabling self-care, improving diagnoses, and addressing stigmatized areas such as menstrual health, sexual health, pelvic care, and menopause. Not only that but the current market size of FemTech is estimated to be between $500 million and $1 billion, with opportunities for double-digit revenue growth.
Looking at representation and inclusion, FemTech is a great example. Female representation is strong in FemTech, with over 70% of analyzed FemTech companies having at least one female founder. FemTech has the potential to disrupt healthcare by providing more convenient and consumer-centric care, empowering women to take charge of their health, and addressing unmet needs. The best part is the success of FemTech contributes to continued innovation and better health outcomes for women and society as a whole. Creating inclusive technologies really balances the business and the human cases. McKinsey interviewed Annie Jean-Baptiste, the head of product inclusion and equity. shares her thoughts on incorporating diversity, equity, and inclusion (DEI) into the product development process. Why incorporate Product Inclusion and Equity? To broaden the pool of perspectives that go into product design and development. The ultimate goal is to ensure that products are created with the needs of underrepresented users in mind.
The Inclusive Consumer
Today’s consumers also value purchasing from companies that have inclusive practices. for example, this recent McKinsey study found that 45% of consumers in the US are what can be referred to as “inclusive consumers”. This means they are looking to purchase from Black-owned brands and actively seek purchases from them.
Another important statistic, brought to you by a comprehensive Kantar’s Global MONITOR 2021 study, is that globally, 59% of consumers tell us that it is important to them to buy from companies that actively promote diversity and inclusion: in their businesses, in society, and the marketplace. The same study discusses the need for inclusive portrayal of people in advertising, which helps customers connect with brands and discover products. Yet, only 6% of ads show people aged 65+; 15% of the world’s population have some form of disability, yet they feature in only 1% of ads; 5% of the world’s population identify as LGBTQIA+, but only 1% of ads overtly show gay/lesbian characters (Source: Beyond brand activism: Three routes to inclusive advertising, KANTAR). Another study on The power of inclusion and diversity in advertising by KANTAR confirmed that the most progressive representations in advertising perform significantly better than the least progressive on all of the drivers of long-term brand growth and positively contribute to short-term sales goals.
We saw that often, women were over-targeted in categories like laundry and household products and under-targeted in other areas like automotive. We saw that ads featuring only women, or featuring both genders equally tended to under-perform. And we saw that portrayals are rarely aspirational or authoritative for either gender.
Why is this important? There is great power in the choices that these inclusive consumers are making, ultimately shaping the future of retail if they can have access to these companies’ products and feel connected to the founders’ stories.
The beauty industry in particular faces pressure from consumers to offer more inclusive products from black-owned companies. The Fiften Percent Pledge offers retailers the option to match the 15% population of black individuals in the US to give 15% of shelf space toward black-owned companies.
Essentially, if the needs of consumers are not being met, from an inclusive perspective, with today’s savvy consumers, they will turn elsewhere with their money.
Accessibility
Making technology accessible is vital in bringing greater inclusion through products on the market. With everything from low-vision accessibility to exploring technologies that allow for more inclusive candidate interviews.
Within products, the user experience and user interface are often considered for accessibility to ensure that customers are able to adequately utilize tech products. However, the learning design is often overlooked. In classrooms and learning environments, it is vital to have inclusive typeface and platforms that are accessible to a variety of individuals with different needs. Allowing for greater accessibility enables individuals to find new interests and utilize their skillsets to contribute to further knowledge in various fields. As tech and innovation tend to advance at a fast pace, the ability to continue learning and remain in the know of new work technologies and trends ensures that society reaps the benefits of innovation.
Sonification is a great way that accessibility measures are being utilized to garner greater interest in sciences and enable sight-impaired individuals to be more involved in understanding the universe. Sonification allows for multi-sensory experiences, turning images, and sights that are beyond our visual spectrum, into sounds. It’s a whole new way to explore the universe, capture what is out there, and get more individuals engaged in sciences like astronomy.
When talking about accessibility, some will think that the issue will not affect them. However, we have to break that bubble – accessibility should be on your agenda too because we are a rapidly-aging population. By 2030, 1 in 6 people in the world will be aged 60 years or over, which is already influencing healthcare systems, transport and communications, uptake in new technologies or even migration patterns.
An age-inclusive society is one in which older people remain active and in good health for as long as possible. In Europe, healthy life expectancy has greatly improved, however, there’s an increase in diagnoses of illnesses and disabilities as Europeans get older.
“Age-friendly environments benefit all community members by removing physical and social barriers and fostering inclusiveness. This not only benefits older people. It also improves accessibility, addresses gender inequities, and helps build the resilience of communities for emergencies.”
WHO publication National Programmes for Age-friendly Cities and Communities: a Guide
While lifespans increase, this means that individuals will be working for more years and spending their money for longer. Financial inclusion with the support of consumer protection and policies, alongside financial education, is one way to reduce the pressure on public pensions and facilitate intergenerational equality. As Laura Carstensen, Director of the Stanford Center on Longevity says, “The challenge is converting a world built by and for the young into a world that supports and engages a population that lives 100 years and beyond.”
Investing in Diversity
Only 1% of VC funding went to all-female teams in 2022. And while all demographics faced a huge decline in funding, clearly women-only teams were the hardest hit in these new market conditions. A July 2023 House of Commons Committee (UK) report on the British venture capital industry revealed that the domestic VC market was “highly unrepresentative of the gender and ethnic diversity of the UK.”
For every £1 of equity investment in the UK in 2021, all-female founder teams received 2p, all-male founder teams received 84p, and mixed-gender teams 14p. This is lower than the 4 per cent received by all-female teams in 2020, reflecting yearly volatility.
The British Business Bank (BBB) in House of Commons Treasury Committee Venture Capital Report 2023
It can be easy to think that things are getting better and will continue to do so without action, but it’s clearly not the case.
Why is investing in a more diverse tech ecosystem important? For starters, there is huge value at stake. If Europe’s tech sector were to double its representation of women, it could increase its GDP by somewhere between 260 to 600 billion euros by the year 2027.
Also, no one knows better what underrepresented groups know best what they need then those groups themselves. That’s why it’s important that in research efforts and beyond, we switch from inheritently biased systems, and involve the voices of others in research, technology, and healthcare needs.
The Future of Tech and Innovation
Inclusion is not just a nice-to-have, it’s an economic necessity. We can’t afford to exclude talented individuals and marginalized groups. Exclusion comes with a hefty price tag. It’s time to create a society that thrives on diversity and equality. When we do, we’ll unlock the full potential of our economies and build a brighter, more equitable future for all.
Did we convince you that inclusion is the answer to creating a future that works for all? Then take the next step and join us in Vienna at LEAD TODAY. SHAPE TOMORROW. You will meet fellow innovators, experts, founders, and investors eager to commit to and co-create an inclusive world.
Allie Trok
Communications Manager at Female Founders
