50 euron seteli roikkuu ilmapalloon kiinnitettynä taivaalla.

Blog: Tech industry does not put women at the top of the income ladder

Blog post

Many of the top earners in 2022 work in the tech industry. But why do only the men in tech seem to make it to the top of the income ladder?

Every November, income and tax data are the hot topics of the day. Many of the top earners in 2022 work in the tech industry: the list includes both games and more traditional industry (link in Finnish). There are much more men on the list than women: for example, of the top 1,000 earners, only 150 are women (link in Swedish). Looking at the list of the highest earners, one has to ask (yet again), why do only the men in tech seem to make it to the top of the income ladder?

There are at least three reasons for this.

1. Women continue to be underrepresented in tech. The majority of the people studying and working in tech are still men. Although the share of women among new university students in technology, for instance, rose to a new record, 32 per cent in 2022 (link in Finnish), more than two thirds were still men. The share of women in ICT, a particularly lucrative industry, was 29 per cent. 

So why don't women pursue studies or careers in technology as often as men? Research suggests many explanations for this. Based on my doctoral thesis, the main reasons can be found in the stereotypical ideas of the “natural” superiority of men and boys in mathematics and technology and in a culture that favours men in tech studies and workplaces. Together, these factors diminish women’s confidence in their abilities and cause them to have less interest in studying and working in the industry.

High income is often the result of corporate acquisitions.

2. Women start fewer tech companies than men. High income is often the result of corporate acquisitions. Women with a degree in technology start companies less often than men. For example, according to data collected by TEK (link in Finnish), in 2022 women made up 18 per cent of all entrepreneurs, full-time and part-time entrepreneurs included. 

You may also reach the top of the ladder if you manage a large company. But women are underrepresented in this group as well; of the companies listed on Nasdaq Helsinki, only a few have female managers. It is interesting that education in technology seems to give men the skills they need to work as CEOs, but for women, this is not the case. Even the (few) women in the management teams of tech companies often work in supporting positions, in HR or communications, for example. No matter how much companies want to believe that qualifications are all that matter in career progression, the truth is that merit sticks to men.

3. Female-founded companies receive less funding. A woman pursuing a career in technology who decides to start a company is therefore quite a rarity. And when this woman wants to secure funding for her company, she faces yet another set of obstacles. In Europe, for instance, female-founded startups received just 1 per cent – that’s right, one per cent! – of overall venture capital in 2022. Capital investors have realized that a problem exists, but there is still plenty of work to do.

Given all this, it is no surprise that working as an employee or an entrepreneur in technology does not put women on the highest-earners list in the same way as men. Sometimes it feels like equality is still a long way off.