Penn State keynote: Diversity leads to growth. Algorithm blindness hurts innovation. Small businesses need digital help. PA can learn from Startup Chile.
It was an honor to keynote with a presentation on Why Diversity Enriches Innovation in the Penn State Innovation Economy Town Hall. The virtual innovation town hall was co-sponsored by Penn State Berks, Grow PA, the Greater Reading Chamber Alliance, and The Chamber of Commerce for Greater Philadelphia.
Companies that embrace inherent and acquired diversity are 45% likelier to report growth in market share according to an HBR study of 1,800 professionals. Let’s face it, innovation is about new ways of looking at things, new ideas, new processes.
Many of these studies just confirm what we know intuitively, more diverse companies with more diverse management have broader perspectives, more visibility into problems and innovate better. The end result speaks for itself, more products and services and job creation as a result. Here are some ways that diversity can supercharge your innovation efforts.
In 2009, a video went viral where an African American was standing in front of a camera that had a tracking algorithm that wasn’t working because it couldn’t track the color of his skin. Eleven years later, Colin Madland shares on Twitter the screenshot of his African American colleague with his head cropped by the Zoom virtual set algorithm. How is this possible? It’s obvious that a diverse enough group of people didn’t test these features before they were released into the mainstream. Would these problems apply only to tracking algorithms or are there any other algorithms that we should worry about? Data Scientist Cathy O’Neil has coined the phrase, “Algorithms are opinions embedded into code” and the algorithms making decisions today are not necessarily objective, scientific and they can’t be kept in check if diverse people are not represented in the development and testing phases.
Despite the best efforts of Design that Matters to develop an award-winning, life changing neonatal incubator made out of car parts, the product was not adopted, nor distributed commercially to countries that could have taken advantage of it. The reason? The mentality of build it and they will come that works in many cases but in this case, it simply didn’t. The company was able to learn from this mistake and partner with a medical device manufacturer in Vietnam to create the Firefly, a successful and effective machine to treat newborn jaundice. This time, instead of pushing the idea, they researched what was needed and were able to create a life-changing product that’s actually being used to save lives. The lesson here is that no matter the good intentions, they need to be paired with the local know-how and it needs to adapt to practical use scenarios.
Many small and minority-owned businesses have been affected by the pandemic and haven’t been able to transition to a digital model. Some of those that have tried, don’t have the expertise in house to tackle these challenges successfully. I shared the example of the local fish market where online ordering only led to a pick-up in store option, which is what many clients are trying to avoid in the first place.
The digital gap of small and minority-owned businesses is significant and companies such as Google and Facebook are positioning themselves to take advantage of these small businesses. I also mentioned that the advertising systems for Facebook and Google are so complex that it’s very easy for small businesses to spend and waste money, that they don’t have, in failed attempts to promote their businesses. Educational institutions should step up and do a better job in filling in this gap and act as a neutral third party to educate these small businesses to thrive in the digital economy.
Pennsylvania as a state has been struggling with attracting talent and promoting business creation. In a recent Kauffman Indicators of Entrepreneurship ranking for the rate of new entrepreneurs by state, Pennsylvania ranked #46 out of 50 states.
Chile was in a similar situation in 2010 in the middle of the global financial crisis, where the government recognized they needed to transition from a commodity-driven economy to a knowledge economy. Startup incubators are not new and there are many working in Pennsylvania such as the Ben Franklin Technology Partners and the Grow PA initiatives. The lessons learned from Startup Chile are still valid, especially in the international nature of their cohorts, how they provided equity-free seed funding for these companies and how they have created successful follow-up programs to continue to be a part of these startup’s successes.
In the end, innovation and diversity go hand in hand and it was an honor to present to such a prestigious institution and receptive audience.