Silicon Valley is the leading hub for high-tech innovation and development in the United States, while remaining highly competitive among the world’s most revered high-tech economic centers. Venture capital investment is still going strong for Silicon Valley, creating mega opportunities for budding entrepreneurs looking to make their mark in an industry that is experiencing astronomical growth.
According to the MoneyTree Report by PricewaterhouseCoopers LLP and the National Venture Capital Association, venture capitalists invested $29.4 billionin 3,995 high-tech deals in 2013 alone. $7.1 billion was used specifically for Internet investment – marking the highest level of investment of this kind since 2001.
This all looks good on the surface, but when we dig a little deeper, it appears Silicon Valley has a little secret. Their records on diversity are not necessarily keeping pace with the economic growth this industry is experiencing, and it’s certainly not reflective of this country’s increasingly diverse population.
When CNN Money attempted to probe 20 U.S. tech companies to retain workforce diversity data – government reports for only five companies were offered. The companies included Cisco, Dell, eBay, Ingram Micro, and Intel. After reviewing the analytics of the report and making a few assessments, the numbers show that a greater emphasis needs to be placed on improving diversity within these companies. Out of a total of 123,772 employees reported across all five companies, just 7.6 percent were Hispanic and 5.2 percent were African American.
Still, all of the news out of the tech and communications sectors isn’t bleak. DiversityInc. just released its2014 Top 50 Companies for Diversity report. Dell, Verizon, AT&T, Comcast and IBM made the list, thus displaying their commitment to diversity efforts on a number of different levels, from supply chain to employee engagement, recruiting and training. This is the 14th consecutive year that Verizon has been honored on the Diversity Inc. list, and Verizon is one of only two companies to have been ranked No. 1 twice. These companies have and continue to contribute significantly to the high-tech sector and, interestingly enough, are using what should be the byproduct of Silicon Valley to grow their business models – diverse suppliers and digital entrepreneurs.
Verizon has especially risen to the challenge and it provides an instructive case study of how a corporation can achieve diversity at every aspect of its business. Last year, a reported 19.2 percent of Verizon’s U.S. based employees were African American – a percentage that far surpasses the 10.8 percent of African Americans that makeup the overall U.S. labor force. Hispanic Americans make up nearly 11 percent of Verizon’s workforce. And of Verizon’s 11-member Board of Directors, four are women and four are people of color.
Working with diverse businesses is also an important component of a company’s overall commitment to diversity. Just last year, in a three-way transaction valued at $287 million among minority-owned private equity firm Grain Management, Verizon Wireless, and AT&T, the largest minority spectrum deal in U.S. history was struck. To lay the foundation for this transaction, Verizon Wireless put together an unprecedented process to conduct an intensive search to identify minority and women entrepreneurs to participate in this deal. By working with the Minority Media and Telecommunications Council (MMTC), National Urban League (NUL), and the National Council of La Raza (NCLR), Verizon succeeded in identifying Grain Management to participate in the deal.
“Verizon Wireless is to be commended for conducting an open and inclusive spectrum sale process that specifically targeted a diverse group of potential bidders, including women and minority-owned businesses,” stated MMTC President and CEO David Honig. Verizon has also recently entered into another spectrum deal involving Grain Management and Cincinnati Bell, and that transaction is pending approval before the FCC. “The unprecedented sale process Verizon conducted to include a diverse firm in its B block spectrum deal, in addition to the inclusion of minority firms in three separate bond underwriting transactions earlier this year, demonstrates Verizon’s continued commitment to diversity and inclusion,” added Honig.
Last year, MMTC awarded Verizon its Corporate Diversity Leadership Award, which recognized “Verizon’s efforts in promoting diversity and inclusion within the telecom sector and at all levels of the company.”
In 2013, Verizon purchased $6.3 billion in goods and services with diverse suppliers, an increase of more than $1 billion compared to 2012. Last year, AT&T spent 15 percent of its total spend with minority business enterprises. Clearly both companies, which heavily invest in the wireline and wireless broadband networks that enable many of the innovative Internet companies we all know and use – from Google and Facebook to Apple and Microsoft, embrace the fact that diverse suppliers offer innovative and value-added products and services essential to win in today’s highly competitive market.
NUL President and CEO Marc Morial has worked with Verizon over the years and has partnered with the company on various supplier diversity initiatives. Morial explains that “Verizon has a long standing record of diversity and inclusion which is evidenced by their diverse board as well as the many diversity awards over the years. The NUL has partnered with Verizon to build on their record by helping them to identify talented minority owned business partners. It is my hope that other companies will follow their lead.”
LULAC National Executive Director Brent Wilkes has also favorably cited Verizon’s commitment to diversity: “As the U.S. Latino population continues to experience rapid growth, we are presented with an amazing opportunity to diversify the country’s telecommunications sector in a meaningful way. As one of the first companies to publicly support the Gang of Eight Immigration Reform legislation, Verizon took a bold step forward to recognize the innovation and ingenuity of a diverse population.”
Verizon and others are proving to do exactly what Silicon Valley should be doing – identifying and leveraging diverse talent.
Silicon Valley stands to learn a thing or two from America’s leading telecommunications providers. Competing in an increasingly diverse market requires ingenuity and unmatched talent and creativity. Fostering a diverse and inclusive work culture and partnering with talented diverse firms is the best way to build a business that understands ever-changing consumer trends and the communities any company must serve to remain competitive in an increasingly diverse global marketplace.
This is how companies effectively compete in the 21st Century. Companies like Verizon and AT&T are walking the walk – the jury, however, is still out on Silicon Valley.