The money is all green, anyway

This retracted article is proof that there is a diversity crisis in Silicon Valley.

Forbes has removed a contributor piece titled "There Is No Diversity Crisis in Silicon Valley" after being hit with a barrage of criticism from readers, including many leading the tech industry's movement to hire more women, Hispanics and African-Americans. The article, authored by journalist Brian S. Hall, argued that the healthy revenue streams and stock prices of companies like Apple, Google and Facebook were proof that the tech industry is doing well and has no reason to go out of its way to include more women or underrepresented minorities.

There is no crisis at all in Silicon Valley. Silicon Valley is doing absolutely gangbusters! Hall wrote, according to a cached version of the post. This is not a crisis. Silicon Valley is swimming in money and in success.

It's interesting, in a pathological sort of way. If you define Silicon Valley as the successful companies and rich people living in an area on the south side of San Francisco, then yes, the rich people are rich. If you include all the people who live there, though, then the story gets more complicated, and there are all these people there and around the country who are not rich. But Brian S. Hall simply defined them out of the story. Convenient!

One could also argue that stock prices are a peculiar and narrow index of success. Maybe it's just me, but I've never regarded the size of my bank account as a measure of success -- if I did, I'd be very depressed right now, and I'd never have chosen to go into biology and academe. If Brian S. Hall used a different metric -- say, whether they made the world a better place, or how happy the lowest level employees were -- he might have gotten a completely different answer.

Another measure might be the ethical standards of a company. I hesitate to mention that one, because over and over it seems that the most unethical, exploitive, harmful companies thrive (see Nike, Uber). I suppose you could argue that virtue is a totally inappropriate concept to apply to Silicon Valley.

But another problem is typical of American economics: it's entirely short-sighted. Silicon Valley is making money hand over fist right now, but will it be doing so in ten years, fifty years, a century? I know, the moneyed class doesn't care. When the Morris Renaissance arrives in a couple of decades, and Silicon Valley crumbles while the upper Midwest becomes the new hotbed of innovation and profit-making, they'll just flap their black wings and rise from the rubble of California and fly avariciously to descend on the riches of Minnesota. There will still be people left behind in the wreckage.

But they don't count in the Brian S. Hall scheme of things.

I will just point out, though, that institutions that do think ahead are concerned. The US is undergoing a demographic shift, and while you may think that your company can do just dandy if you only hire white guys who graduated from Stanford right now, that's not always going to be true. That's a shrinking pool of talent, and if you're only tapping the best people from a tiny subset of the workforce, you're going to be left behind by the competitor who taps the best people from the entire workforce. I don't follow major American companies, but the American scientific community is already gearing up for the changes coming: NIH, NSF, and HHMI all care very much that we expand our diversity now, because it takes 25-30 years to raise up a scientist. You can't notice declining scientific output and then start hiring women and minority scientists, unless you have a time machine, because the time to put initiatives in place to encourage more education and enthusiasm for the discipline was decades before.

But you can't build the time machine, because the black woman physicist who would have invented it never got the opportunity to go to Stanford, and all the white men in physics were inspired by Brian S. Hall and are making research decisions based on stock options.

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that the healthy revenue streams and stock prices of companies like Apple, Google and Facebook

Since Forbes is a business magazine, one might expect people who write for it, whatever their views on diversity and similar topics, to be familiar with the concept of survivor bias. How are the revenue streams and stock prices of Commodore, Yahoo, and MySpace? For every company that made it big in tech, there were a dozen or more that didn't. People I know who have played the venture capital game tell me that successful venture capitalists are successful because only 90% of the companies they invest in go belly up.

Maybe the talent the unsuccessful companies needed was at UC Berkeley or even San Jose State rather than Stanford, and was hungry because they didn't have the nearly automatic ticket to success that a Stanford degree gets you. At least it couldn't have hurt these companies to look there.

By Eric Lund (not verified) on 07 Oct 2015 #permalink

"and there are all these people there and around the country who are not rich."

By definition, not everyone in the country can be rich. If you want to talk rich/poor, you really shouldn't be talking about the US. To signal your superior compassion, try the bottom billion next time. Unless your real concern is the wealth of American families, which is disgusting when you think about it.