Strategist on inequality

Apjit Walia, Deutsche Bank Global Head of Technology Investment Strategy joins the On the Move panel to discuss the racial disparities in the tech industry.

Video Transcript

ADAM SHAPIRO: How the COVID pandemic is impacting all kinds of people is something we talk about daily, but there's also an issue when it comes to the widening gap between people of color and people who are Caucasian. So to help us understand what can be done to close that gap, we invite into the stream, Apjit Walia.

He is Deutsche Bank's Global Head of Technology Investment Strategy, and it's important to bring you in, because you folks at Deutsche Bank actually took a look at the way Silicon Valley and tech companies could do something right now. You actually said a simple five-year program to reduce the gaps in three areas targeting the underprivileged households among the people who are black and Hispanic, would cost about $15 billion. So what is that five-year program that tech companies could do?

APJIT WALIA: Good to be here. So when we went to this whole study, we looked at the divide, the digital divide, and tried to look at what's urban, rural, high and low income, educated, uneducated, and what we found, the staggering gap was based on racial background. Families of color, black or Hispanic compared to white families, the level of digitization, the level of broadband access, the level of computing, we found almost a 10-year gap, and I think it's been there for quite some time, and it persists.

COVID, of course, it's been well highlighted, has put a litmus test to this gap. You've begun to see, our research showed, we looked at the three big cities, New York, LA and Chicago and how all of them we saw during peak lockdowns, black neighborhoods, the mobility was 135% higher. So clearly, work at home jobs not being available or the access to digital connectivity not being available created that divide, which essentially inequity with health issues. So what we see, is this is not a problem which is not well-defined. It's been there for some time, well talked about, and it can be fixed.

If you go to a certain threshold of income, under $30,000, the [INAUDIBLE] households, and go to black and Hispanic families, if you want to go tomorrow and provide connectivity, $20 a month, you're looking at $5 billion over a period of five years, for a billion dollars you can start providing connectivity for one year. You provide gadgets. You know, we spoke to a lot of professors, academics, [INAUDIBLE] saying the times families have four children and one laptop. So who does the homework in this time?

So if you look at the anecdotal studies, it shows that it's a lot of difficulty. So when you provide a laptop, and that's about a billion dollars. So for $6 billion, you could start to provide connectivity and hardware right away. And that's why we say Silicon Valley, big tech has benefited from this pull forward of this of this e-commerce demand curve. And can then look at the divide, the digital divide, and come to the rescue of the people in the country who are suffering from the other side of this.

DAN ROBERTS: Apjit, Dan Roberts here. As you say, this is not a new problem. And of course, for years on our live shows, we've been doing segments about the overall problem with lack of diversity in C-suites, in corporate America. I just wonder if this time might ironically lead to actual change there. Because so many companies for so long have, they've said a lot about trying to increase their diversity hiring, but there's words, and then there's actions. And since the pandemic has clearly by any metric hit minority groups harder, you wonder if actually once we're through this, maybe this will be the wake-up call that finally changes things. Do you think there's a chance of that?

APJIT WALIA: You know, this is a 400-year-old problem. It's not going to get solved in four months, four years and 40 years. This will take time. And every time there is an issue, you've got people of color suffer more. So you've got to look at it, of course, hiring helps. And a lot of tokenistic conversation helps. But we believe a bottom-up approach to go off the ecosystem and address the digital divide early on in life, in middle school, high school.

Once you start addressing it there, if you're 10 years behind in digitisation in a world where a year is a lifetime, it just keeps you stuck. And having hiring would help. But we believe approach it at the children's level from middle school, high school, and try to educate. Most professors we spoke to said inequity in digital skills early on in life has the biggest impact in today's day and age. And that's what we believe should be addressed.

AKIKO FUJITA: Apjit, I was trying to make sense of the solution that you've provided for what needs to be done to reduce that digital divide, and it strikes me that it's very similar to what a lot of these tech companies have been doing in emerging markets, in developing countries like in India. And I'm wondering if there are lessons to be learned from that front. When you look at a company like Google, that's been really aggressive in some of these markets in trying to get people connected, is there a template there that can be maybe applied here in the US in some of the most underserved communities?

APJIT WALIA: That's a great question. We've gone to emerging markets and tried to get connectivity, because that's a big market, we believe there's growth there. And in our own country here, we've got potentially another country, which is not, which is you living in a broadband desert and not connected.

So yes, the solutions are well-defined. They're simple, they're not complicated. There needs to be an intent and I believe a collective a collective effort from big tech, five of them to come together. And basically, all the [INAUDIBLE] saying, let's fix this. So yes, the solution, India and some of the other countries would have done, you bring it back. The numbers are pretty clear. You don't have to go far to find where the digital divide is.

ADAM SHAPIRO: Apjit Walia is the Global Head of Technology Investment Strategy at Deutsche Bank. We appreciate your being here.