Our Content Editor, Gabriel Barnes, speaks to Russ Shaw CBE, Founder of Tech London Advocates and Global Tech Advocates. They discuss the impact of the coronavirus crisis on the UK technology industry, and how government and businesses should be striving for inclusion and diversity in this sector in the months and years to come.
Gabriel Barnes: As the founder of Global Tech Advocates, how have you seen the Covid-19 pandemic affecting the UK tech sector? What challenges has it faced?
Russ Shaw CBE –The resilience of the UK tech industry in the face of a global health crisis that has impacted companies in a range of sectors, all around the world, has been plain to see. Whether the uptick in remote working or the push for innovation in health-tech to support the NHS, many digital companies have seen increased demand, or been agile enough to adapt.
However, the sector has of course experienced a plethora of challenges, particularly the early-stage companies that are less well resourced. In fact, a survey from Tech London Advocates last year showed that more than half of tech start-ups recognised that survival was the priority for the next three months.
Many tech companies have experienced a sudden drop off in demand from customers cutting budgets. We’ve also heard a number of accounts from businesses looking to continue their scaling journey, which have seen VC investors withdraw from conversations. In particular, at the seed level, many businesses have found it hard to engage with funders during the pandemic on their first round of funding. All this has reversed growth plans around hiring or R&D and put pressure on government to support a sector it will need to champion in a post-Brexit environment.
Gabriel Barnes: Are there reasons to feel hopeful?
Russ Shaw CBE – I think so. Investment levels and optimism have remained relatively strong, with UK tech entrepreneurs as optimistic as ever. The Government is looking ahead to secure the future of the industry, announcing a new visa scheme and new funding initiatives in response to the challenges.
Gabriel Barnes: How has the last year influenced inclusion and diversity in the tech industry?
Russ Shaw CBE – The government’s initiatives to support tech firms during the pandemic have been very welcome, whether through investment support or maintaining the workforce through the furlough scheme. However, this necessary short-termism may have exacerbated the sector’s existing diversity and inclusion issues. Although the British Business Bank understands the need to track the demographic and socio-economic split of those receiving capital, the Future Fund was arguably weighted towards beneficiaries not representative of our diverse tech sector.
After all, diverse founders tend more often to seek funding through alternative means, such as angel investors and family offices. Therefore, the focus of the fund on start-ups with existing venture capital support created barriers to funding for under-represented founders without the necessary relationships in place.
In the private sector, however, we’ve seen the emergence and growth of a number of organisations focused on improving diversity in the tech sector. The rise of UKBlackTech, Black Female Coders, along with Tech London Advocates working groups like TLA Women in Tech, TLA Black Women in Tech, and TLA Tech for disAbility are examples of the astonishing proactive response to this issue. Given the potential impact the pandemic might have had on diversity progress in tech, organisations like these have ensured that we do not move backwards and continue to hold tech businesses accountable.
Gabriel Barnes: Whose responsibility is it to ensure progress with inclusion and diversity as we move on from this period of uncertainty? What can businesses and government do?
Russ Shaw CBE – The tech sector has for so long been crippled by the diversity crisis, something unthinkable given the proven impact of better diversity on the innovation economy. Risking the progress that has been made because of the pandemic is not an option. Better still, the UK needs to go much further on diversity and inclusion if it wants to maintain its status as a premier digital nation, and the onus is on everyone to ensure this happens.
It will take a hugely collaborative effort to ensure the legacy of the pandemic is not to entrench existing inequalities in the distribution of VC investment. For government, there is an opportunity to build out new initiatives to support under-represented founders. Through Innovate UK, more funding can be provided for research by diverse entrepreneurs through the creation of targets. The allocation of specific budgets based on realistic representation of how many diverse founders are in the UK would be an even better step.
Equally, the private sector has a role to provide government with the knowledge they need to ensure we are leaving no one behind. But beyond influencing Westminster, the tech sector has a broader responsibility to improve diversity in a sector where inequality is in danger of being accentuated. VC firms should look for ways to diversify their portfolios and companies looking to embark on post-pandemic hiring sprees must recruit talent from a range of backgrounds.
