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State of Tech 23 | EUROPE

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Digital Technology in Europe

Of the 50 sovereign European states recognised by the United Nations, only 27 are members of the European Union. Ironhack has a presence in 6 countries across geographical Europa: Spain, Portugal, France, Germany, Netherlands and the UK. 

The European Union created, in 2015, the Digital Single Market, which aims to make digital life between European countries much easier. For Europe to become digitally advanced, it needs to remove unnecessary regulatory barriers and transition from separate national markets to one EU-wide regulation. These changes could lead to the significant economic growth of up to €415 billion annually, benefiting job creation, competition, investment, and innovation within the EU.

The EU’s Digital Single Market Strategy is built on three pillars:

  1. Access: better access for consumers and businesses to digital goods and services across Europe. 

  2. Environment: creating the right conditions and a level playing field for digital networks and innovative services to flourish.

  3. Economy & Society: maximising the growth potential of the digital economy.

The goal is to create a European model for data, technology and infrastructure that “strengthen its digital sovereignty and set standards”. 

As part of the Digital Single Market initiative, the EU intends to offer a European Digital Identity to all EU citizens. This will standardise identification, legal documentation, traffic tickets, and other aspects, enabling access, payment, and modification of personal information through a single app. These endeavours are part of the EU’s Digital Decade plan, which aims to transform the digital landscape in the coming years: 

«The digital world should be based on European values – where no one is left behind, everyone enjoys freedom, protection and fairness. Europe’s Digital Decade is where everyone has the skills to use everyday technology. […] Connectivity reaches people living in villages, mountains and remote areas, so everyone can reach online opportunities and participate in the benefits of the digital society.

Key public services and administrative procedures are online for the convenience of citizens and businesses. The Digital Decade is a comprehensive framework that will guide all actions related to digital. The aim of the Digital Decade is to ensure all aspects of technology and innovation work for people”.  

Image Source: European Commision

The EU’s Digital Decade program is focused on achieving four primary objectives. These include developing a digitally competent population and a workforce consisting of highly skilled digital professionals.

The program also aims to establish secure and sustainable digital infrastructures, facilitate digital transformation for businesses, and promote the digitalisation of public services. The EU intends to work towards these goals to ensure that its citizens are equipped to navigate the increasingly digital landscape of the future.

The EU’s Digital Decade program hopes to achieve several main objectives. The program is focused on creating a safe and secure digital world, enabling everyone to participate in digital opportunities, and ensuring that no one is left behind. Additionally, the program aims to provide small businesses and industries with access to data and digital technologies while promoting the convergence of innovative infrastructures to work together.

The EU also seeks to ensure that small and mid-sized enterprises can compete in the digital world on fair terms and that public services are readily available online. Furthermore, the program emphasises research that focuses on developing and measuring the impact of sustainable, energy and resource-efficient innovations. Finally, the EU intends to ensure that all organisations can maintain cybersecurity to protect their digital assets.

The European program aims to achieve the following primary objectives:

  • A safe & secure digital world.
  • Everyone can participate in digital opportunities / no one is left behind.
  • Small businesses and industries have access to data.
  • Start-ups & SMEs (Small and mid-size enterprises) have access to digital tech.
  • Innovative infrastructures converge to work together.
  • SMEs can compete in the digital world on fair terms.
  • Public services are readily available online.
  • Research is focussed on developing and measuring the impact of sustainable, energy and resource-efficient innovations.
  • All organisations can ensure cybersecurity.

Here you can discover the European Digital Targets for 2030 and beyond. 

The European Union’s Digital Decade goals are currently progressing at a slower pace than expected. At the current rate, it is estimated that the goals will not be met until 2040, a decade behind schedule. The EU’s projected economic value by 2030 is €1.3 trillion, which is considerably lower than the potential value of €2.8 trillion if the goals were to be achieved on time. However, if the progress towards the Digital Decade goals can be accelerated, there is a possibility of unlocking up to €1.5 trillion in additional economic value by 2030.

In order to monitor the progress of digitalisation and innovation in each country, the EU employs two separate analyses: the Digital Economy and Society Index (DESI) and the European Innovation Scoreboard. Since 2014, DESI has been tracking member states’ digital progress across four areas: human capital, connectivity, integration of digital technology, and digital public services.

On the other hand, the European Innovation Scoreboard (EIS) provides a comparative assessment of research and innovation performance among EU member states and selected third countries, identifying the relative strengths and weaknesses of their research and innovation systems. These tools allow the EU to better understand each country’s advancements in digitalisation and innovation and to develop strategies for further improvement.

Digital Economy and Society Index

The DESI 2022 results show that while most EU member states are progressing in their digital transformation, there is still low adoption of key digital technologies by businesses and insufficient digital skills among the population. Finland, Denmark, the Netherlands, and Sweden are still the frontrunners, but they also face digital challenges. 

Image Source: European Commission

Human Capital

In 2021, 87% of people aged 16-74 used the internet regularly, but only 54% had basic digital skills. The Netherlands and Finland lead the EU in digital skills, while Romania and Bulgaria lag behind. There is a shortage of ICT specialists in the EU labour market, with 55% of enterprises having difficulty filling vacancies.

Additionally, there is a gender imbalance, with only 19% of ICT specialists and one in three STEM graduates being women. The Path to the Digital Decade proposal aims to increase the number of employed ICT specialists to at least 20 million by 2030, compared to 8.9 million in 2021. Sweden and Finland currently have the highest proportion of ICT specialists in their labour force.

Connectivity

The EU has full broadband coverage, but only 70% of households can access fixed, very high-capacity network (VHCN) connectivity with gigabit speeds. FTTP coverage increased from 43% to 50% in 2021, while DOCSIS 3.1 coverage increased from 28% to 32%. Malta, Luxembourg, Denmark, Spain, Latvia, the Netherlands, and Portugal have the highest fixed VHCN coverage. 5G coverage also increased to 66% of populated areas, but only 56% of the total 5G harmonised spectrum has been assigned, which limits the deployment of advanced applications.

Integration of digital technology 

In 2021, only 55% of small and medium-sized enterprises (SMEs) in the EU have adopted basic digital technologies. Finland and Sweden have the most digitalised SMEs, while Romania and Bulgaria have the lowest rates. By 2030, the Digital Decade target is to have at least 90% of SMEs with a basic level of digital intensity. Although more companies are becoming digitalised, the use of advanced digital technologies such as AI and big data remains low. At least 75% of companies should adopt AI, cloud, and big data technologies by 2030, as per the Path to the Digital Decade proposal. Finland, Denmark, and Sweden are the most digitally transformed countries for businesses.

Digital public services

In 2021, the quality scores for digital public services for citizens and businesses reached 75 out of 100 and 82 out of 100, respectively. Among the Member States, Estonia, Finland, Malta, and the Netherlands have the highest scores, while Romania and Greece have the lowest. The proposed target of the Path to the Digital Decade is to ensure that all key public services for citizens and businesses are fully available online by 2030.

European Innovation Scoreboard

The European Innovation Scoreboard (EIS) assesses the research and innovation performance of EU Member States and selected third countries. Almost all EU Member States have increased their innovation performance since 2015, with the EU increasing by 9.9 percentage points.

Business process innovators, international scientific co-publications, and innovative SMEs collaborating with others were the indicators with the highest improvements. However, the lowest-performing countries are falling further behind.

Member States fall into four performance groups: Innovation Leaders, Strong Innovators, Moderate Innovators, and Emerging Innovators. Belgium, Denmark, Finland, the Netherlands, and Sweden are Innovation Leaders, while Bulgaria, Croatia, Hungary, Latvia, Poland, Romania, and Slovakia are Emerging Innovators.

Image Source: European Commission

Digital Infrastructure

Digital infrastructure in Europe is a critical component of the continent’s digital transformation. It encompasses a range of technologies, including connectivity, 5G, and data, that are essential for businesses and consumers alike.

Europe has made significant progress in expanding its digital infrastructure in recent years, with many countries investing in high-speed broadband networks and rolling out 5G services. However, there are still gaps in coverage and speed, particularly in rural areas. As the demand for digital services continues to grow, ensuring that Europe’s digital infrastructure is robust and reliable will be essential to supporting innovation and economic growth.

Internet access

The achievement of gigabit connectivity throughout Europe by 2030 is vital for ensuring that every business and citizen can participate in society. This goal can be attained using any technology, but it is recommended that the focus is on next-generation, sustainable fixed, mobile, and satellite connectivity. As the decade progresses, households, schools, hospitals, and businesses will all require high-speed data infrastructures for cloud computing, eEducation, eHealth, and high-performance computing, with new digital features and capabilities expected to become available, providing a new perspective to a digitally enabled society.

According to the Dutch VPN company Surfshark and their Digital Quality of Life (DQL) Index, which examines digital quality across countries, seven of the top-ranking nations are located in Europe.

This index looks at 5 indicators:

  1. Internet affordability.
  2. Internet quality.
  3. Electronic infrastructure.
  4. Electronic security.
  5. Electronic government.

Image Source: Surfshark

The European countries with the highest Digital Quality of Life are also highly ranked globally in terms of their Gross Domestic Product (GDP), according to the World Bank.

Although Europe is among the wealthiest continents with the highest level of Digital Quality of Life, as shown in the following graph, a larger GDP does not always correspond to better Digital Quality of Life. This difference is particularly noticeable in southern and eastern Europe.

Image Source: Surfshark

According to data by Digital Europe, in their Mind The Gap report, the majority of experts support the EU target of bringing 100 Mbps connections to all European households by 2025. However, some experts find them insufficient. These experts argue that the current targets are not ambitious enough given the available technology, with several markets already offering multi-gigabit services up to 10 Gbit/s and 25 Gbit/s services emerging, with 50 Gbit/s services expected to be available in the coming years. 

The experts surveyed by Digital Europe agree that the targets should be considered a starting point and not a limit and should not only be used to catch up with the deployment of gigabit networks but rather as a minimum that Europe should strive for in the global technology competition.

Data infrastructure

Statista’s data indicates that the value of the data economy in the 27 EU countries and the United Kingdom was estimated to be over 440 billion euros in 2020. The data economy encompasses the overall impact of the data market on the economy, which includes generating, collecting, storing, processing and exploiting data using digital technologies. The value of the Data Economy is only expected to grow as it becomes a focus for the European Union. 

Data Centers play a crucial role in the overall Data Economy, as they are essential to maintain the infrastructure that supports it.  According to Statista, the US has almost 4.5 times more Data Centers (2,701) than any other country, with Germany (487) and the UK (456) following closely behind. The top 15 also include the Netherlands and France.

Once again, this highlights Europe’s strong position globally, emphasising the significance of the digital economy in the continent.

Image Source: Statista

The Data Centers Market, which includes all hardware-related expenses incurred when establishing and maintaining an IT infrastructure, continues to grow globally at a fast pace. Cloud services have evolved into a strategic factor for tenants, developers, and investors interested in new markets. Major cloud service providers now offer assurance for future scalability and validation of market fundamentals, making them a key determinant for investment decisions.

The past year has seen a surge of interest in secondary markets like Madrid, Milan, Zurich, Berlin, Warsaw, Oslo, and Barcelona. Meanwhile, official regulations have shed light on the political challenges in Amsterdam, Frankfurt, and Dublin, with efforts to reduce pressure on local resources and promote sustainable development. Both large and small markets offer opportunities for savvy investors as the region’s development activity remains on an upward trend.

5G Networks

As the mobile market continues to expand, 5G technology has become increasingly crucial to facilitate the latest innovations in digital technology, such as the metaverse. Currently, 86% of Europeans are mobile subscribers, with 79% using mobile internet. These figures are expected to rise by 2025.

Image Source: GSMA

Furthermore, it is projected that 85% of all internet connections in Europe will be made through smartphones by 2025. The countries leading in smartphone penetration in 2021 are Germany, the UK, and France, followed by Spain and Italy, as illustrated in the chart below.

Image Source: GSMA

Despite significant efforts to develop infrastructure and provide 5G networks to its population, Europe has lagged behind other countries in adopting this technology. While the majority of European countries have deployed commercial 5G services, and nearly two-thirds of operators in the region have launched 5G networks, Europe still lags behind global leaders such as Japan, South Korea, and the US in terms of adoption. By 2025, it is predicted that there will be 311 million 5G connections across Europe, representing a 44% adoption rate.

Image Source: GSMA

The European 5G Observatory provides quarterly reports on the progress of the 5G network in Europe. These reports allow us to gain a more comprehensive understanding of the ongoing efforts, processes, and advancements being made by European countries and the European Union as a whole.

Impact of Covid on the Digital Economy

The Covid-19 pandemic has accelerated the digital transformation in Europe as governments, businesses, and individuals have had to adapt to new ways of working, learning, and communicating. The pandemic has highlighted the importance of digital infrastructure, tools, and services in maintaining business continuity, providing remote access to healthcare and education, and enabling social interactions while adhering to social distancing measures.

The crisis has fueled the conversation around digitalisation, with increased investments and initiatives to strengthen digital infrastructure, upskill the workforce, and promote digital innovation across sectors.

Image Source: Atomico 

Based on the results of EIBIS’s report on digitalisation, 46% of businesses within the European Union took measures to enhance their digital capabilities during the first stage of the pandemic. Nonetheless, the data highlights noticeable variations among different firm sizes, industries, and nations.

In particular, in Western and Northern Europe, almost half of the firms (48%) adopted digital measures, compared to 43% in Southern Europe and 37% in Central and Eastern Europe. Business and public response to fast digitalisation and their ability to adapt rapidly to new consumer needs are factors that determine a country’s digitalisation performance, according to EIBIS. 

Image Source: European Investment Bank

During the pandemic, digitalisation hasn’t just been adopted by governments and companies: consumers have also shifted towards online channels, leading to a corresponding response from companies and industries. The findings from a McKinsey survey affirm the rapid transition towards engaging with customers via digital means, surpassing the rates of adoption recorded in previous surveys. 

Since the outbreak of the pandemic, there has been a significant shift towards digital products and services among consumers in Europe. With restrictions on physical movement and the closure of many businesses, consumers turned to online channels for everything from shopping and entertainment to communication and education. This shift has been particularly evident in areas such as e-commerce, online streaming, and teleconferencing, which have seen a surge in demand.

In addition, the pandemic has accelerated the adoption of digital payment methods, as consumers have sought to minimize physical contact and reduce the risk of infection. Now, years after the first wave of Covid-19 changed the tech landscape in a question of weeks, it’s safe to say the pandemic has served as a catalyst for the digital transformation of many aspects of consumer behaviour in Europe.

Image Source: McKinsey & Company

According to data from the European Parliament, the EU experienced a significant digital adoption increase during the first wave of the Covid-19 pandemic, as it went from 81% to 95%. The digital sector faced negative impacts during the first wave of the pandemic, with the disruption of supply chains slowing down production in several countries.

The manufacturing sector experienced a fall in demand for hardware due to decreased demand caused by industry shutdowns, and as a result, there was lower demand for digital manufacturing and service products. Despite these setbacks, there was a significant increase in demand for digital infrastructure due to the need for telework. During 2020, the number of people employed in the industry increased by 0.9% compared to the previous year, and the value-added increased by 1.8%. 

The Covid-19 pandemic has had a negative impact on innovation performance indicators such as innovation expenditures, innovative sales, and venture capital expenditures, with all showing a decline in 2020.

Additionally, GDP fell in 2020 compared to 2019 for 22 Member States, which also negatively affected indicators that include GDP in the denominator. Although Covid-19 negatively impacted exports, exports of medium- and high-tech products and knowledge-intensive services were less affected than total exports, resulting in an overall positive effect on their export shares. However, it is still uncertain how much of an impact the pandemic will have on innovation in the long run.

Europe Startup Ecosystem Overview

Europe has a powerful startup ecosystem, with many cities establishing themselves as key players in the global startup landscape. Europe’s startup scene is diverse and attracts talent, investors, and entrepreneurs from all over the world. 

The European startup ecosystem is also supported by a range of government initiatives and policies aimed at fostering innovation and entrepreneurship, making it an attractive destination for startups looking to launch and grow their businesses.

As of 2019, European startups and scaleups provided employment to 2 million individuals and have generated €223 billion in venture capital-supported exits since 2013. The era of big tech triumphs arising solely from well-known locations is over: unicorns, companies valued at over $1 billion, have emerged from 21 different European countries, and the next unicorn could arise from anywhere.

The European tech industry witnessed a significant milestone in 2021, as total investments surpassed a noteworthy $100 billion for the first time ever. The effects of the Covid-19 pandemic on tech-based solutions sparked an upward spiral of growth that didn’t carry onto 2022. As of December 2022, European startups raised a total of $94 billion, which is still significantly higher than any previous year before 2021.

However, the funding figure was primarily boosted by large rounds at later stages earlier in the year, but it drastically declined throughout Q3 and Q4. 

2022, a year for staying strong

The Atomico State of European tech 2022 report describes Europe’s startup scene as resilient. The years have characterized the market with a slower pace and the shift towards prioritizing growth efficiency, moving away from a grow-at-all-costs mindset. 

As the economic downturn causes uncertainty in global markets, venture capital investors are becoming more cautious and selective. They are looking for companies with growth potential and balance efficiency, sustainability, and profitability. European’s Fintech and Energy sector led the scene in growth and funding, according to Dealroom. 

Image Source: Sifted

Founder sentiment towards the fundraising environment has drastically changed over the course of 2022, with 82% of respondents in the Atomico survey stating that raising venture capital has become more challenging. This shift in sentiment is the largest change recorded in the past five years of surveying the ecosystem, indicating the reality of the new market environment. 

Despite the challenges, internal and external, to the startup scene, the general feeling is optimistic. According to the Atomico survey, 77% of all respondents remain optimistic or have become more optimistic about the future compared to 12 months ago.

Surprisingly, only 23% of respondents reported decreased optimism compared to last year, possibly due to their ability to distinguish between short-to-mid-term financial downturn impacts and the long-term prospects of the European tech industry. This industry’s future ultimately depends on the strength of the entrepreneurial ecosystem and the driving force of technological innovation.

Image Source: Atomico

Startups, looking ahead

 Although there has been a decrease in investment activity, investors continue to search for prospects in the European tech industry. The pandemic has expedited the adoption of technology, but there is still considerable potential for growth in Europe.

As an illustration of this, many European businesses still do not have a website, or if they do, they are not leveraging cloud technology to expand their operations. According to Atomico statistics, one-third of retail companies in Europe lack a website, and nearly 60% of businesses with at least 10 employees are not utilizing cloud services.

Image Source: Atomico

Companies are shifting their focus from solely growing quickly to reducing costs and achieving profitability. The market is demonstrating its ability to adapt to challenges and is better equipped than ever to navigate uncertainty. Private mergers and acquisitions have seen a rise, and this trend is projected to persist.

The tech industry has emerged from the pandemic stronger and more efficiently, thanks to the rapid adoption of digital technologies. However, the effects of the pandemic were strong: from hiring freezes to layoffs to adapting business models. According to data from European Startups, as the surge of investment experienced during 2021 wears off, it becomes decisive for the future of the tech landscape in Europe to foster great collaboration between the public and private sectors.

The retention and acquisition of talent remain top challenges for founders as they reflect on the past year and plan for the future. Interestingly, managing remote teams has become as challenging as hiring, if not more so.

As they look to the future, founders remain focused on growth, which includes rapid hiring and retention of current talent. This determination and forward-looking mindset is a promising indication of their expectations for 2023 as they actively seek out the right people to help them charge forward.

Image Source: State of European Tech 22

European startups also face a significant challenge: bettering their diversity. The data on VC funding for underrepresented groups in the European tech ecosystem is concerning. According to Atomico’s State of European Tech report, founding teams composed entirely of minority ethnic entrepreneurs receive a mere 0.7% of total funding into European unicorns, while only 1.4% of European unicorns are established by founders from that demographic.

Additionally, the report reveals that women-only founding teams received just 1% of VC funding in Europe in 2022, down from 3% in 2018. Funds with women-only general partners raised only 1% of capital, and women represent only 15% of general partners in Europe.

Gender Gap in the European tech ecosystem

The European tech industry is facing significant challenges when it comes to gender diversity. Despite the efforts of many organizations to promote gender equality in the workplace, women continue to be underrepresented in the tech sector. The lack of diversity in the industry not only limits opportunities for women but also leads to a lack of diverse perspectives and creativity, hindering innovation. 

The Regional Gender Equality Monitor, created by the European Commission, utilizes two indices – the Female Achievement Index (FemAI) and the Female Disadvantage Index (FemDI) – to assess gender equality across regions. These indices analyze 33 indicators across seven domains, including Work & Money, Knowledge, Time, Power, Health, Safety, Security & Trust, and Quality of Life.

Image Source: Cohesion Data

Currently, the indices indicate the following trends, as pointed out by the key findings which are still being worked on:

  • On average, women in more developed regions are able to achieve more and are at less of a disadvantage, while most women in less developed regions face big challenges.

  • Within countries, women in capital regions tend to achieve more and are at less of a disadvantage.

  • In general, regions with a lower female achievement index have a lower gross domestic product per capita, while regions with a higher level of female achievement have a higher level of human development.

  • Finally, the quality of government is higher in regions where women achieve more.

There are huge differences in gender equality between different European countries. 

While some European countries have made significant strides in promoting gender equality, others continue to lag behind, according to The Gender Equality Monitor. For example, in countries such as Finland, Denmark and Sweden, gender equality is relatively strong, with women occupying a high percentage of leadership positions and having a smaller gender pay gap.

In other countries such as the Czech Republic, Slovakia, and Romania, gender equality is less well-developed, with women facing bigger barriers to entering the workforce and experimenting a bigger pay gap. 

In countries with strong gender equality, women tend to have better access to education, healthcare, and other social services. This can lead to higher rates of economic growth, greater political stability, and a more equitable distribution of resources.

Image Source: Cohesion Data

The countries ranking highest in the Female Achievement Index are Finland, Denmark, Sweden, Austria, and Luxembourg. These countries have made significant progress in all seven domains studied and demonstrate greater gender equality. 

Image Source: Global Europe

On the other hand, the top five countries in the Female Disadvantage Index, which reflects the extent of structural disadvantages faced by women, are Finland, Sweden, Denmark, France, and Spain. These countries offer women better opportunities for education, work, access to power positions, health, safety, and quality of life.

The 2021 Women in Digital Scoreboard by the Commission shows that there is still a gender gap in specialist digital skills, with only 19% of ICT specialists and one-third of STEM graduates being female.

The Digital Compass aims to reach convergence between women and men in having 20 million employed ICT specialists in the EU by 2030. However, there is a smaller gap for internet and internet user skills, with 85% of females using the internet regularly compared to 87% of males. Women in Finland, Sweden, Denmark, Estonia and the Netherlands are the most digital while Romania, Bulgaria, Poland, Hungary and Italy have the lowest female participation in the digital economy and society.

According to Web Summit, women continue to face discrimination in the workplace. The survey revealed that nearly two-thirds (67%) of women feel that they are paid less than their male colleagues in the last 12 months, a significant increase from 2019, when 46.4% felt they were paid fairly. Additionally, half of the women (49.5%) surveyed reported experiencing sexism in the workplace.

Gender Equality is a crucial objective in the UN’s Sustainable Development Agenda to achieve by 2030. However, despite the efforts, progress has been slow, and gender parity may not be achieved for another 286 years. The Gender Snapshot Report 2022 highlights the global status quo of gender equality and exposes the types of violence that continue to hold women back.

Image Source: UN Women

Table of Contents

Digital Technology in Europe

Digital Economy and Society Index

European Innovation Scoreboard

Digital Infrastructure

Internet access

Data infrastructure

5G Networks

Impact of Covid on the Digital Economy

Europe Startup Ecosystem Overview

2022, a year for staying strong

Startups, looking ahead

Gender Gap in the European tech ecosystem

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THE AMERICAS

Tech Gender Gap in The Americas tech ecosystem

A study by the Inter-American Development Bank (IDB) reveals that women’s participation in digital transformation in Latin America and the Caribbean is limited by a lack of digital skills and competencies, with access to financing being one of the main barriers for female entrepreneurs in digital fields. 

The study recommends specific public policies to reduce the gender gap in digital business transformations and highlights the need to change the culture through awareness campaigns and equitable early education in STEM, foster a culture of self-empowerment and ongoing training in digital technologies, and legal reforms to distribute family responsibilities more evenly among capable adults. 

The IDB study also recommends companies develop gender equality policies, consider implementing flexible or hybrid work mechanisms, create mentoring programs, and adopt upskilling and reskilling measures for women in digital fields.

Women investors and founders in early-stage tech are underrepresented in Latin America, as they are global. Latin America’s lack of diverse representation among decision-makers has ramifications for entrepreneurs, as startups with global women co-founders captured only about 12% of VC funding in 2019. 

To recover from the pandemic and build stronger, more inclusive economies, Latin America should focus on increasing women’s labour participation. 

It’s predicted that Latin America could increase GDP by 14% over the next five years by better-incorporating women into the workforce. Some measures are already underway, such as the Women Empowerment Principles and Gender Impact Investment. However, challenges remain, including limited credit history and the gender wage gap. While the number of tech companies with women in executive positions is increasing, more needs to be done to advance women’s inclusion.

The Gender Equality Observatory for Latin America and the Caribbean shares different indicators of gender equality for the region.  

Let’s look at some of these indicators: 

1. People without incomes of their own

This indicator is the ratio of the total female/male population aged 15 and above with no incomes of their own and who are not studying, compared to the total female or male population aged 15 and above who do not study exclusively. This ratio is expressed in percentages and is further broken down by age and area of residence.

The analysis of this indicator reveals that women’s economic autonomy is still limited in many countries in the region. While the participation of women in the labour force has increased over the years, in 2019, almost one-third of women in the region did not have their own income and were dependent on others, usually men.

This lack of economic autonomy means that women have limited decision-making power in household money administration issues and are more vulnerable to economic shocks and dependent on others for their basic needs.

This highlights the need for policies and programs that promote women’s economic empowerment, such as improving access to education and training, increasing women’s participation in the labour market, promoting entrepreneurship and financial inclusion, and addressing gender-based discrimination and stereotypes. 

By increasing women’s economic autonomy, not only can their own well-being be improved, but also that of their families and communities, contributing to more inclusive and sustainable development in the region.

Image Source: United Nations

 

 2. Child marriage

The child marriage indicator measures the proportion of women aged 20-24 who were married or in a stable union before turning 18. Child marriage is considered a violation of human rights and puts children, particularly girls, at risk of harm and limits their development. 

This harmful practice is associated with negative outcomes such as early childbearing, lower participation in the labour force as adults, lower education levels achieved, and a greater risk of experiencing gender-based violence.

The child marriage indicator is part of Sustainable Development Goal (SDG) 5, which aims to achieve gender equality and empower all women and girls by eliminating harmful practices such as child, early, and forced marriage and female genital mutilation. 

The analysis of the indicator reveals that in the region, one in five women is affected by child marriage, with the highest prevalence in Suriname, Nicaragua, Honduras, Belize, the Dominican Republic, and Guyana. However, there are some countries with lower percentages of child marriage, such as Costa Rica, Argentina, Peru, and Jamaica.

Image Source: United Nations

 

3. Teenage maternity

The indicator measures the percentage of young women aged 15 to 19 who have given birth to at least one child at the time of the census. This indicator is used to assess the prevalence of teenage pregnancy, which is considered a persistent problem in the region. 

Although the overall fertility rate in the region is declining, the rate of teenage maternity remains high and is one of the highest in the world, with Latin American and Caribbean countries having a teenage maternity rate of over 12%.

This rate is mainly composed of adolescents with lower incomes and lower levels of education, indicating that the problem disproportionately affects disadvantaged groups. 

Teenage pregnancy can have serious consequences for the health and well-being of young women, as well as for their social and economic opportunities, as they may face barriers to education, employment, and full participation in society.

Image Source: United Nations

 

4. Women’s deaths at the hands of their intimate partner or former partner

This indicator tells us the number and rate of women who are killed by their intimate partner or former partner. The data includes the absolute number and rate per 100,000 women aged 15 and over. This issue is a serious violation of women’s rights and a major public health concern in Latin America and the Caribbean. 

The Dominican Republic, Uruguay, and Honduras are the countries with the highest rates of women’s deaths at the hands of their intimate partner or former partner, with rates equal to or greater than 1.0 per 100,000 women. 

Guyana, Antigua and Barbuda, and Grenada have the highest rates of women’s deaths at the hands of their intimate partner or former partner in the Caribbean, while Jamaica has recorded the highest absolute number of victims. It is important to address this issue to ensure the safety and well-being of women in the region.

Image Source: United Nations

Women in the United States earn an average of 82% of what men earn, and the gender pay gap has remained relatively stable over the past 20 years. The wage gap is smaller for workers aged 25 to 34, where women earn 92 cents for every dollar earned by a man in the same age group. 

Women are overrepresented in lower-paying jobs relative to their share of the workforce, but their increasing presence in higher-paying jobs traditionally dominated by men has contributed to narrowing the gap. 

The reasons for the gender wage gap include women being treated differently by employers, women making different choices about how to balance work and family, and working in jobs that pay less. Working mothers are more likely to feel pressure to focus on responsibilities at home than working fathers.

Mothers are less likely to be in the labour force than women without children and, when employed, work fewer hours per week on average. Conversely, fathers are more likely to work longer hours and receive a “fatherhood wage premium,” which increases the gender pay gap. The pay gap also varies widely by race and ethnicity.

The gender pay gap has closed more among workers without a four-year college degree than among those who do have a bachelor’s degree or more education. Women have increased their share of employment in higher-paying occupations, such as managerial, business and finance, legal, and computer, science and engineering (STEM) occupations. 

However, women are still underrepresented in managerial and STEM occupations. Looking across racial and ethnic groups, a wide gulf separates the earnings of Black and Hispanic women from the earnings of White men.

Image Source: US Census Bureau

USA

Gender gap. How big is the gender gap in the digital tech industry, and how is it affecting the sector?

Diversity, equity and inclusion (DEI) is a concern in the US tech industry. Based on data from the U.S. Equal Employment Opportunity Commission (EEOC), compared to the total US workforce, the tech industry employs a smaller proportion of Black Americans (7.4% versus an average of 14,4%), Latinx Americans (8% versus 13.9%) and women (26% versus 49%).

Image Source: CompTIA Cyberstates 2022

The importance of an organisation’s reputation regarding DEI is gaining weight year-over-year due to a rise in social awareness. However critical social awareness may be to transform the industry, inclusion and diversity are also intelligent business choices: data proves that diverse companies are more likely to outperform their competitors financially.

Despite companies and governments making an effort to reduce the diversity gap, there’s still a long way to go, and there are many hurdles to overcome. According to The State of Diversity in Tech Report by Dice, perception of a lack of leadership opportunities and salary and benefit inequities are the most common causes of discrimination. In Dice’s report, 48% of participants in the study claim they feel that they are not fairly compensated compared to others in the same occupation with their same skill set. 

Focusing on gender as a factor of discrimination, women carry out only 26% of tech occupations, compared with 49% of women representing the total US workforce. This fact gives a general glimpse of the Gender Gap existing in the tech industry, where women are highly underrepresented. 

The Gender Gap influences a women’s tech career in an intersectional way. First, it’s essential to look at the number of women who choose a STEM (science, technology, engineering and mathematics) degree. Based on data from the Integrated Postsecondary Education Data System (IPEDS), women represented 45% of STEM majors in 2020. However, only 22% earned degrees in engineering and 20% in computer science. In the US, women’s limited access to STEM degrees is not a new phenomenon: a report titled “Why so few?” examines data from over two decades to understand the factors that can explain why women are systematically tracked away from science and math throughout their education. 

According to the American Association of University Women AAUW, study after study finds out that women have the ability and high test scores in STEM subjects, but even so, women are pushed away from these fields. They explain the underrepresentation is mainly because of structural and cultural barriers. Let’s take a closer look at the entry barriers women face in STEM:

  • There is a lack of female role models. Historically STEM fields have been male-dominated, which has created a taboo for women working as scientists and technologists. It’s like they don’t exist in the collective mental framework. The consequence of this lack of role models is that girls don’t have people like them to admire, which causes a lack of motivation and inspiration to pursue a career in STEM. Letting schoolgirls know they have a future in this industry is an important step forward. 

  • Stereotypes and sexism push girls away from STEM. Without any scientific basis, there’s an idea of women being less intelligent than men, primarily related to STEM subjects. This misconception significantly impacts girls’ self-image and determines their career aspirations through more “feminine” degrees.  A study by Wiley, reveals that 44% of the female respondents between 18 and 28 years were never given any information or resources to help them learn about tech career opportunities, compared with the 33% of males. 
  • STEM environment is hostile for women. Women who consider taking STEM subjects at school or having a related degree suffer from isolation and microaggressions, such as underestimating their opinions only for being a woman. These situations act as additional stressors that end up with many women dropping out of these lines because they feel they don’t fit in. 

Because of these obstacles, girls are less likely than boys to consider a career in technology. One of our Key Opinion Leaders, Ember., told us about their experience growing up in a male-dominated environment:

Soundbite:

“my first computer class was AP Computer Science in Senior High School and already by then it was very male-dominated. My school was like very good and I definitely tried to get more girls and non-binary people into tech but Even by high school, it was seen as a boys thing. And honestly, I think that attitude actually probably starts elementary school, girls are not expected to be the ones hacking around or in Robotics club or even, you know, messing with more of the hardware stuff and that just continues all throughout. And by the time you’ve graduated, the number of women who’ve stuck it out and you have really like dealt with the microaggressions, dealt with the fact that sometimes You’re the only non guy in the class and the guys don’t know how to react to that. So they’re going to be creepy and of course, you know, 18, 19, 20 year old dudes who maybe don’t have social skills and Really don’t know how to deal with the fact that there’s a member of this foreign species in the class. But yeah. IT people and so it I think it’s just pipeline problem” .

Nevertheless, all kinds of organisations have launched action plans to empower women through STEM degrees and are reaping up their labour. Based on data from the National Science Foundation, more women than ever are earning STEM degrees and catching up to men.

Also, as more Gen Z women enter college and the workforce, we will see an increase in the percentage of females earning  STEM degrees and being interested in tech careers, as Gen Z is one of the first generations considered “digitally native”. 

Once students finish their degree, it’s time to get their foot in the door of the job market. Here women experience more difficulties being hired for entry-level technical positions. This phenomenon is known as the retention gap. One example of this gap is that only 38% of women who majored in computer science are working in the field, compared to 53% of men – this happens at a similar rate with engineering degrees.

Regarding under-represented minority groups, they represented about 9% of the nation’s top computer science programs, but large tech firms employed only 5%. The lack of employment diversity in the tech industry has often been attributed to a lack of applicant diversity and self-selection of minorities away from STEM fields. However, this argument denies the responsibility of employers to hire and retain talent. 

Image Source: Statista

After getting past the hiring hurdles, women face another challenge in their professional careers: the glass ceiling. This metaphorical invisible barrier hinders women and minorities from advancing in a profession. A fact that reinforces this barrier is that 66% of women state that they see no clear path for advancement or improvement within their tech careers. For many women, it comes to a stage when their careers come to a standstill. The data provided by McKinsey & Company shows that while 48% of women account for entry-level hires, they just account for 40% of first-level managers. This bottleneck continues to increase as it gets higher in the corporate rank, as shown in the image below.

Image Source: Leanin

For Black women and Latinas, this broken rung is even more decisive.

According to Leanin, for every 100 entry-level men who are promoted to manager, just 68 Latinas and 58 Black women are promoted; this number is even lower for Native Hawaiian, Pacific Islander, and Indigenous women. Also, people with disabilities face more barriers to advancement and get less support from their managers. 

This glass ceiling, called the broken rung, connects directly with wage inequalities.

On average, women in the tech industry are offered a salary of 3% less than men for the same job, at the same company, with the same experience. 

Another important piece of data is that women are more likely to leave their companies, according to the McKinsey Report on Women in the Workplace. This study points to an unfavourable environment for women inside companies, summed up by the barriers they already face to achieve being there. 

In this  Wiley report, 68% of participants surveyed claim they have felt uncomfortable at a job due to their gender, ethnicity, socio-economic background or neurodevelopmental condition. Moreover, 50% wanted to leave a tech job because the company culture made them uncomfortable. Because of this, the option of working remotely is essential to women. The possibility of hybrid and remote work has delivered tangible benefits for many women, making work and life balance much more effortless. 

The Women Tech Network predicts that at the current pace of change, it will take 133 years until the gender gap is closed. Companies need to take action and implement programs to improve their DEI policies to build a stronger industry. According to McKinsey & Company, “diversity is especially crucial in these roles to help debias the technologies that make up an ever-present evolving component of modern life”. Counting with employees of different backgrounds, experiences, and ideas helps to breed higher quality products. 

Women entrepreneurs in the US face many challenges of their own, and according to a report by The Silicon Valley Bank, more than half of the country’s startups lack women on their boards. Only 14% of startups have a female CEO, and if the startup founder is a man, it’s less likely to have a woman in the COO role or leading HR marketinentrepreneurseams. Unfortunately, female founders are slightly less likely to rely on VC and more so on friends and family. 

What is this study about?

Ironhack is the second biggest school in the world, with more than 10.000 students. They have 10 campuses and since Covid, have started an online teaching program. They are specialized on digital technologies, and their main focus is to reduce the gap between supply of workforce and the demand of the companies.

From 2023 on, they want to start publishing reports to position themselves as thought leaders in tech areas. They have contacted us to help them build this reports. We’ll start building the State of Tech in 2023 report, to be ready this January. If the relationship goes on, they will need another report on september.

IRONHACK wants to use this report as a source of knowledge to build “hero content” for their communication channels throughout the year.

Thanks to this efforts, they expect to:

  1. Drive brand awareness online.
  2. Establish their brand as thought leader in the tech industry recruitment space.
  3. To show how well they understand the skills gap in the sector.
  4. To gain more lead for the top of the funnel.
  5. To drive more traffic to their website.
  6. To nurture their funnel, resulting in more apps.

Audience of the contents of this report:

  1. B2C: Career changers and recent grads, looking to understand the viability of a career in tech, the long term benefits of getting into tech and what kind of jobs are out there in 2023. They should come away from reading the report feeling motivated to get into tech, with an idea of what job they want and how to get it.

  2. B2B: Hiring managers and recruiters, looking to understand the skills and current pools currently available in the market. They should come away from reading the report feeling more certain of the kinds of profiles they should be looking for.

The study includes: 

  • 9 Reports on the State of Digital Tech 2023, in 9 countries. 
  • 1 Global Report on the State of Digital Tech 2023. 
  • 1 light Gender Report.
  • 1 Global Survey about the State of Digital Tech 2023.
  • 109 Interviews

Interviews: 

  • 9 Ironhack Local Outcome Managers
  • 9 Gender Experts
  • 18 Ironhack Students
  • 18 Key Opinion Leaders (KOL)
  • 27 Chiefs
  • 27 Career Changers

Discover more about this study in the Research Proposal. 

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The Survey

The Survey was intended to be delivered in for this research through LinkedIn Ads, but after designing the campaigns and test-launching it, we noticed bad results in terms of Survey submissions. 

The Survey strategy is being rethought at the moment. 

You can access the ongoing Survey here.