Entrepreneurship drives the American economy. We are a nation of inventors, makers, and innovators. Even so, we know that so much of our entrepreneurial talent remains untapped.
Consider this: Just three percent of America’s venture capital-backed startups are led by women. Less than one percent are led by African-Americans. And the state of California received more venture capital funding last year than the rest of the country combined.
We need to do more to ensure that all Americans have the opportunity to fully contribute their entrepreneurial talents. Inclusive entrepreneurship is both a matter of fairness and an economic imperative – you don’t win games by leaving more than half the team on the bench, and companies with diverse leadership often outperform those that don’t.
A venture capital firm recently examined a decade’s worth of data from their portfolio of 300 companies and found that startup teams with at least one female founder performed 63 percent better than all-male teams.
And according to a McKinsey study, public companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians. Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.
To capitalize on this opportunity and grow our innovation economy, the President issued a call to action to advance inclusive entrepreneurship and announced dozens of new actions by the Federal government and the private sector to diversify our entrepreneurial talent pipeline, including:
Additionally, Senior Advisor Valerie Jarrett and Chief Technology Officer Megan Smith hosted a roundtable focused on diversity and inclusion with some of the technology leaders and entrepreneurs from White House Demo Day. Yesterday, Secretary of Commerce Penny Pritzker also hosted an “Open for Innovation” event where large companies showcased their technology needs to a room full of startups, exploring opportunities for partnership.
Meanwhile, on Capitol Hill, U.S. Senators Debbie Stabenow and Gary Peters recently introduced legislation that would reauthorize the State Small Business Credit Initiative to support entrepreneurs in regions across the country. And, members of the Congressional Black Caucus are in Silicon Valley this week to emphasize the economic benefits of diversity.
In the months ahead, the White House will continue to engage with stakeholders on new and expanded efforts that will increase the inclusiveness and strength of America’s innovation economy. Working together, we can make sure the United States is the best place on the planet to start and scale a business, no matter where you come from. To get involved, drop us a note at firstname.lastname@example.org.
Jennifer Erickson is Assistant Director of Innovation for Growth at the White House Office of Science and Technology Policy.
Doug Rand is Assistant Director for Entrepreneurship at the White House Office of Science and Technology Policy.