Asian entrepreneurs display notably different career trajectories with many tending to start earlier and relying more heavily on support from family and friends. The average age for these entrepreneurs to set up their first business was 29, compared to 34 in the West, according to new research from HSBC Private Bank.
The study, based on a survey of more than 2,800 active business owners worth more than $1m, shows that 41% of the respondents are still under the age of 35.
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Business owners only come to think of themselves as an entrepreneur during their professional development, either at university or college (28%) or once they had gained an amount of professional business experience (45%). This compares to countries such as France, Germany, United Kingdom and the United States where people are significantly more likely to have always thought of themselves as entrepreneurs (26% compared to 14% in Asia).
The study found that two in five (40%) entrepreneurs in Asian region are female, and nearly half of these are under 35.
In Hong Kong the ratio of female to male entrepreneurs is almost even (48% female to 52% male), while in Singapore and mainland China it is slightly lower (36% and 37% female respectively). Meanwhile in the West just 31% of business owners surveyed are female, with the lowest proportions in Germany (21%) and the United Kingdom (27%).
Also, over 51% of entrepreneurs in Asia with a net worth of over $15m are female, compared to 33% in the West. The average worth of female entrepreneurs in these markets is $4.6m, compared to an average worth for men of $4m.
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By GlobalDataHSBC Private Bank head of global solutions group Nick Levitt said: "Despite being more interconnected and globalised than ever before, this study reveals that culture, society and economies can have a significant impact on what it means to be an entrepreneur in different regions.
"Entrepreneurialism runs deep in Asian countries and often across multiple generations, so it is natural to have so many relatively young entrepreneurs in these markets. In fact, many of today’s young entrepreneurs come from families with their own businesses where there was opportunity to acquire the necessary skill set and experience that can position them for success."
The study also found that entrepreneurs in Asia are much more likely to be focused on their ventures for the long-term than their Western counterparts. This is most true in mainland China where less than a quarter (24%) intend to exit compared with those in United Kingdom where over half (55%) expressed the intention to sell their business.
Notably, though entrepreneurs in these markets are running larger businesses, they are less personally wealthy than business owners in the West.
On average, entrepreneurs in Asia said that their main venture has a turnover of $12m, more than double those in the West. However, their personal wealth averages in the region of $16.2m, 26% less than Western entrepreneurs.
"Once they reach a certain level of wealth, many Western entrepreneurs branch out into many other ventures or move on to new projects. For Asian entrepreneurs who are proud to have built successful empires, there is more of a focus on consolidating and growing their current enterprise," commented Nick Levitt.
The other most notable findings of the study are the importance of family and personal networks for entrepreneurs in Asia. Nearly 54% Asian entrepreneurs said they hail from business-owning families compared to 43% in Europe and the US.
A similar proportion in Asia (49%) utilise family wealth when setting up their first business, while 26% looked to investment from friends or acquaintances.
In mainland China, family wealth plays an even more important role in starting up, with 61% of entrepreneurs funding their initial venture via this source, and 32% looking to friends or acquaintances, according to the report.
"Personal connections invariably play an important role for entrepreneurs regardless of geography. In Asia, these personal connections can often provide financial support, as well as valuable business guidance for entrepreneurs. The next generation entrepreneurs also understand and recognise the value of building strong networks," Levitt continued.
When looking at the drivers for entrepreneurial activity and achievements, business owners operating in Hong Kong, Singapore and mainland China said increasing personal wealth is both the most important driver to starting an entrepreneurial career (20%) and one of their proudest personal achievements (16%).
"As we saw in our research, Asian cultures place a great deal of importance on the role of the family, and these informal networks are very much part of business life," Levitt added.
"It’s also notable that Asian business owners are just as likely to give back to society through philanthropy, but that their giving is more strategic than spontaneous, and informed more by societal and cultural values than personal ones."
These findings will form part of the HSBC Private Bank Essence of Enterprise report, which is due to be released early in 2016.
