Entrepreneurs in Asia are more likely to take a long-term approach to their enterprise, according to new research – less than a quarter in China intend to exit their businesses compared to half in the UK.
They are also more likely to keep their wealth in the business, with the average turnover in the region sitting at $12 million, compared to $6 million in the West; while their personal wealth is averages $16.2 million – 26% lower than Western entrepreneurs in the US and Europe.
The figures appear in a preview of the Essence of Enterprise report, which will be released by HSBC and Scorpio Research next year.
“What's fascinating is that the majority of Asian entrepreneurs first consider themselves entrepreneurs in university or in their first professional job. Psychologically that's fascinating because they're thinking like that before they've even become an entrepreneur,” says Nick Levitt, head of global solutions at HSBC Private Bank.
The research also found that entrepreneurs in Asia are more likely than those in Europe to come from a family business background (54% compared to 43%).
Levitt said the family unit is far more significant as a social grouping in Asia compared to the West “where the individual is paramount”.
Forty-nine per cent of entrepreneurs used family wealth to help set up their business, with a further 26% seeking investment from friends or acquaintances, while in mainland China 61% received initial funding from their family.
The report said this could be limiting, with nearly a third of Asian entrepreneurs (30%) citing lack of access to capital via informal connections as a barrier to achieving their business objectives. This compares to just 12% from the West who cite the same barrier.
“It seems there is a strong theme in Asian family businesses that the patriarch or matriarch want to bring in the next generation. If you are bought up where there is a family network that wants your participation in entrepreneurial ways, clearly that is going to have impact,” Levitt says.
The research also found that the average profile of an entrepreneur is changing. Two in five entrepreneurs are female, and nearly half of these are under 35.
“Someone in their 20s or 30s is going to have a very different impression of how they're going to organize their estate, their succession and their wealth versus someone who is in their 50s or 60s,” Levitt said.
He added that the wealth management industry was going to have to address the way it addressed a new generation of female clients, which was different to a traditional, male-dominated audience.
The report surveyed 2800 entrepreneurs with a net worth of at least $1 million.