How Data and Technology Advance Economic Progress for All

In October, Nasdaq held its inaugural Purpose Forum, convening thought leaders, change-makers and innovators to discuss how we can empower individuals to embrace their lives’ purpose, advance their economic growth and reach their full potential. 

In a thoughtful discussion with our partners, we explored how leveraging technology and data can both improve the lives of underserved individuals and create policy that enables women and entrepreneurs of color to thrive in business.

Since the relaunch of The Nasdaq Foundation and our Purpose, we have made it our mission to expand access to capital for underserved populations, helping them share in the wealth the markets create. We have also funded and partnered with more than 25 nonprofit organizations through the Nasdaq Foundation’s quarterly grant program providing access and resources to communities in need as they look to build and scale their business endeavors.

Meanwhile, our New Investor Initiative has been hard at work, examining multiple approaches to create a stronger investor identity for underrepresented communities, including our Transforming Investor Identity project run by Commonwealth, with partners like Ellevest. The project will take insights from a groundbreaking national pilot project in which more than 800 first-time investors—primarily women of color—received seed funding to begin investing and participated in surveys related to understanding their sense of belonging as an investor.

In addition to our work with our partners, The Nasdaq Entrepreneurial Center has built an amazing community of founders, ensuring the resources and tools the center provides are accessible to people of all backgrounds. To date, they've reached over 75,000 entrepreneurs in more than 100 countries.

Harnessing Technology to Create Opportunity

As an innovative technology company, Nasdaq believes that technology can help democratize markets, bringing down the barriers of access for underrepresented founders and funders. As a result, we seek out partners who share our vision, leveraging technology to create a more equitable future for all.

“The challenge is technology can be a force for good,” said Nicola Corzine, head of the Nasdaq Entrepreneurial Center. “It changes the access from which people can build from.”

Ellevest, a robo-advisor investment platform and financial literacy program primarily for women, also shares our vision, leveraging technology to customize investing practices for women and to grow women’s wealth and open avenues of access for them to realize their full potential. 

During her career on Wall Street, Ellevest Founder Sallie Krawcheck saw how women were often left out of the investing space and recognized an opportunity to invite women in and tap a relatively untouched market by figuring out how to shape investment strategies toward the long-term wealth goals of women. Ellevest looked at the data on the differences between women and men, finding contrasts in their investing needs:

• Different Earnings: Women still earn 83 cents for every dollar earned by men — a $900,000 disparity over a lifetime.
• Different Lifespans: 74% of women die single, meaning most women benefit from staying in control of their own finances.
• Different Needs: 62% of women say they have unique investment needs that aren’t understood by advisors.

Statistically, women outpace men in lifespan but earn less than them in a lifetime, according to Krawcheck. Therefore, “if you assume you’re average, you really risk running out of money,” she said. 

In response to this data, Ellevest created a gender-based investing algorithm that changes the models and choices of investments, considering the needs of women based on statistics and through personalized questionnaires.

“We said, ‘We'll do the hard work. Tell us everything about you, your characteristics, how old you are, what part of the country you're in, how much you're earning, what industry you're in, so we can figure out what you should earn over the course of your life and what you want to achieve,’” said Krawcheck.

Today, Ellevest has found profound success, raising $53 million in its series B funding in 2022. It remains owned and operated by women, with over $1 billion in assets under management (AUM) and 90% of its Series B investors identifying as women and underrepresented groups.

Clients who use the app have seen a direct benefit to having their money work for them. According to Krawcheck, Ellevest has helped them leave bad marriages, get better educated and even start their own businesses. 

“I had [someone] a few weeks ago who burst into tears and said, ‘Because I was investing with you all, I got to go to graduate school. It changed my life,’” said Krawcheck.

Krawcheck also noted that investing in women doesn’t just improve the lives of women. Like We are Enough Founder Tracy Gray, from our panel on advancing economic progress for all, Krawcheck saw the statistics behind the overall economic and social uplift created from investing in women. 

“When you get money into the hands of women, good things happen,” said Krawcheck. “Diverse teams outperform smarter, higher IQ teams. So, if we can invest in women CEOs, women board members...really getting money in the hands of women...not only are [those] great investments, but that tangibility of it we've also found with our community,” she added.

Leveraging technology to uplift underserved communities also surfaced in the Forum’s last panel discussion, focusing on data and policy. Panelists discussed the claims of racial bias against artificial intelligence (AI) technology. But rather than seeing AI as a hindrance to innovation, it was welcomed by our panel, with leaders expressing their desire to have underrepresented groups be part of this technology at the ground level. 

Kelly Burton, CEO of Black Innovation Alliance (BIA), noted that BIA members are invested in shaping AI to help all people. 

“Our members want in. They want in on the development of artificial intelligence, especially the development of ethical AI,” said Burton. 

As a leader of a coalition of 116 member organizations working to close the racial wealth gap by building pathways that provide equitable access to Black entrepreneurs, tech founders and creative technologists, Burton and the BIA have emphasized that people of color are essential to AI’s ability to create a more equitable world. 

“When you come from communities that are on the margins, you have special insight into how you create a fair and just society and a fair and just economy,” said Burton. “Which is why it's really, really important for us to ensure that marginalized communities are very much in the midst of the further evolution of artificial intelligence.”

Driving Policy Through Data

Both Corzine and Burton were part of our panel discussion outlining how data can impact policy creation targeted at breaking down barriers of access for founders and funders of color. All panelists agreed that more data on founders and funders of color is needed to create better policies and achieve equity goals. 

Burton outlined the inadequacy of current metrics for measuring progress in supporting Black entrepreneurship. According to Burton, a popular metric among Black capital raising is reporting the number of black entrepreneurs that receive venture capital investment north of $1 million. However, the metric of $1 million is not sufficient evidence to prove an increased interest in investing in Black entrepreneurship. She explained that getting an investment of $1 million may be a little or a lot, depending on what the business idea is. If an entrepreneur has a business idea that has a potential market cap in the billions, $1 million is a relatively low investment.

Corzine, too, lamented the lack of data on entrepreneurs of color, saying, “We don't quite understand what it is that allows sustainability of founders to exist in regions yet, and that has not been shared knowledge stocks that exist just yet.”

As a result, both Corzine and Burton are actively involved in gathering new and better data. BIA’s ongoing research project, the Black Innovation Census, was conducted to act as a benchmark, measuring black innovation across the country. 

“We conducted this landscape analysis to say: Who are the stakeholders? What are they doing? What is the nature of the work?” said Burton.

Meanwhile, Corzine advocated for knowledge sharing across businesses to better understand the state of play in Black and minority entrepreneurship. In her work, policymakers like the U.S. Securities and Exchange Commission (SEC) ask her for more data to inform its policy, which leads her to look for more research that can result in a better business economy. 

“It's not just research for research's sake...it's research that drives us towards a better America for all of us to rise. And I think that's what gets us excited,” said Corzine.

Meanwhile, Linda Moore, CEO of TechNet, a national, bipartisan network of technology CEOs and senior executives that promotes the growth of the innovation economy, believes that data helps her and her team promote policy that can have a real impact on American lives. According to Moore, there is an urgent need to lift up minority entrepreneurs to help us compete on a global scale.

“The number one challenge, I think, is the complacency that we have...that our dominance in tech and innovation will be there always. [But] we have to work for it every single day,” said Moore. “We need everyone to realize it, and we need everyone to support entrepreneurs. Diverse entrepreneurs are proven to be more successful,” she added.

For Moore, uplifting entrepreneurs is a pathway to increasing innovation and solidifying the U.S.’s dominance in the tech sector globally. 

In addition, Technet advocates for legislation for child and adult education. Like John Hope Bryant and others on our Advancing Economic Progress for All panel, Moore wants to go into classrooms to increase computer science classes and provide adequate STEM education for those who don’t have access to it.

According to Code.org’s 2021 State of Computer Science Education report, only 53% of high schools in the U.S. teach a computer science course. And students from underrepresented backgrounds are less likely to have access to STEM education, according to Moore.

As the panel concluded, all panelists agreed that investment in early education was a vital step in advancing economic progress for underrepresented groups.

Using Technology to Inform the Policies of Tomorrow 

Going forward, these organizations shared new initiatives to help propel Nasdaq’s shared mission to advance economic progress for all. 

BIA noted its second annual Black Liberation and the Digital Economy Conference (BLADECon), an initiative designed to assess the many ways that Black people are leveraging the digital economy to win – not only as individuals but as a community. 

Meanwhile, TechNet is working to create 10 new tech hubs across the heartland of America to spread the wealth of innovation across the country. 

“We can all rise when we understand what allows entrepreneurs to build where they need to build for the people that they care to build for,” said Corzine.