The Digital Economy Is Profoundly Unequal
Is unbridled innovation good for society? Can we trust the internet? Can we afford not to? These are some of the big picture questions being asked right now at the annual Institute for New Economic Thinking conference in Toronto. It’s a George Soros-sponsored academic shindig that has become a touchstone for the key economic policy conversations in the year ahead. This year, the topic is how to manage the societal fallout from our rapidly expanding digital world. At a time when much of what happens on the internet–from NSA snooping to runaway viruses like the Heartbleed bug to cyber-warfare with China–makes people scared, how do we craft a digital world that feels safer and more secure? And how can we make sure that the benefits of the digital economy–which currently accrue mostly to the top quarter of society–are more equally shared?
I discussed these issues with Quartz editor Kevin Delaney and the Guardian’s Heidi Moore, this week on WNYC’s Monday Talking (listen below). And I’m listening to some of the world’s top thinkers on the topic debate them here in Toronto. One of the things that I’ve found fascinating so far is how unequal the digital economy really is. Yesterday, University of Michigan professor Lisa Cook gave an illuminating (and somewhat depressing) presentation about this. For starters, innovation is making our economy more bifurcated. People who make their living interacting with technology and the digital world make a median salary of $74,000 a year. Those that don’t make $34,000. Women and minorities (with the exception of Asians) lag behind. 70 % of people in the “innovation economy” are non-Hispanic whites. And even for women with technology degrees, there’s a big pay differential. Men in the innovation economy make $80,000 per year and women make $53,000, in part because they tend to be concentrated in areas like life sciences, which pay less than physics or engineering or computer science.
So, what to do? Cook says the good news is that there’s reason to think that more diversity is good for business, and that can help drive change. Her research shows that co-ed patent teams, for example, are much more productive than single sex ones. And while pipeline issues used to be a big problem, women are getting more and more STEM degrees – roughly 40% of them now go to women, up from around 9% in 1970. Now, female entrepreneurs just have to start monetizing those educational gains. Cook says that women are founding less than 5% of new tech start-ups. All I can say is follow the money, sisters!