Female-Led AI Startups in UK Receive Mere 2% of Funding

Female-founded companies have accounted for just 2% of artificial intelligence (AI) startup deals over the past decade, according to a report by the Alan Turing Institute, The Guardian reports.

Results from the government-backed body demonstrate an “urgent issue” of gender imbalance in AI investment, with female-founded companies securing a mere £1.3m deal on average – a figure that can be poignantly compared with the average £8.6m raised by all-male founder teams.

The AI Market: Rich in All But Gender Equality

AI has become an inescapable part of every individual’s landscape. In the past year alone, investment in AI software has skyrocketed with no signs of slowing down anytime soon.

A report by Goldman Sachs predicts that AI investment will approach $200bn globally by 2025, while Bloomberg has also published findings that generative AI could become a $1.3tn market by 2032.

The AI market is a multibillion-dollar, likely to be a multitrillion-dollar market, globally, and its increasing integration into our daily lives signifies a shift in the technological sector. Alas, it has proved notably less effective in signalling a new era of gender-balanced tech initiatives and investment.

Dr. Erin Young, a research fellow at the Alan Turing Institute, puts forward thoughts on why this needs to change: “The recent explosion in interest and investment in AI, especially generative AI, means that there is an urgent need for women and minorities to have equal access in the tech and venture space,

Venture capital firms impact the business models of the startups in which they invest, and VCs tend to invest in companies that reflect their own networks and value systems, in turn shaping the technologies developed. Encouraging inclusion in the VC space can help promote responsible AI design, tackle AI biases and foster innovation.”

Indeed, as alluded to by Dr. Young, bias over a founder’s gender may be a significant stifle to innovation within the broader AI sector. Reports from the Alan Turing Institute, and those similar to it, are critical to bringing VC’s attention to this point and ensuring that, now male-skewed investment has been clearly demonstrated, change can be implemented.

The Future of AI: What Needs to Change?

Currently, there are gender diversity gaps across the investment space and uneven rates of progress for ethnic and racial groups across firms.

Recent biases from AI products have been seen in passport checkers working less efficiently with darker skin to assigning digital assistants such as Apple’s Siri and Amazon’s Alexa with a female voice.  In 2019, a UN agency found that the latter in particular had helped to entrench harmful gender biases. The two companies have since offered alternatives.

But besides bringing attention to the aforementioned investment disparity and harmful gender biases, what can tangibly be done to close this gender gap in tech?

The Alan Turing Institute report went on to suggest that improving recruitment, monitoring investment practices and diversifying the ecosystem could all help to improve gender balance.

Perhaps the AI sector should also take a leaf from what’s happening in other areas of tech innovation, where there have been some distinct bright spots for the role of women in tech.

Steps to Get Women into Tech

With the AI sector still lagging behind in matters of gender balance, examples of women having an increased presence in other areas of tech burn even brighter.

Particularly in areas such as coding, there has been a distinct rise in female players.

The coding sector is one that male employees have long dominated. In fact, the global software developer survey in 2022 found that a whopping 91.88% of all software developers are male.

With such a statistic, it is hardly surprising that many women have simply never envisioned themselves with a job in tech – the sentiment is still a fairly new and unexplored one.

However, an increasing number of women have begun to buck the stereotypical trend and kickstart a new career path in coding – a trend that partly owes its thanks to the forward-thinking schemes cropping up globally to get more women into tech-focused jobs.

Code First Girls, for example, offers a free eight-week online coding course that can help women realise their potential in tech. The female-founded company provides free coding courses for women and subsequently helps them to be recruited by connecting companies with their newly trained female developers.

By encouraging women to think about jobs in STEM and giving them the opportunity to switch to employment in these fields, more women may be motivated to get jobs in fields such as coding.

Chief Executive of Code First Girls, Anna Brailsford, believes that “These are candidates who may have never considered a STEM career before, convinced it was a career just for men, or that they didn’t have the right skills. But they come with a wealth of experience to change things in technology for the better.”

Indeed, this long-awaited change would be beneficial not just to women, but to all the sectors in STEM. Last year, the UK technology sector had a talent shortage which threatened to “stifle growth” of the industry with more than two million job vacancies in the tech sector – more than any other labour area.

Former education minister Michelle Donelan also remarked that “Employers both large and small are crying out for more people to be trained in digital skills, reinforcing that it is more important now than ever to tap open the pool of talent women offer to tech.”

Such remarks shed light on how undeniably beneficial closing the gender gap in tech could be. At a time when the global tech industry is suffering from downsizing and economic struggle, and the demand for tech development has never been higher, working towards a gender balance is more important now than ever for the survival of the sector.