Do culture and geographic location dictate business success?
It raises some interesting ideas.
Does culture correlate to entrepreneurial trends?
Does the place where you are born in dictate how likely you are to be an entrepreneur? The data released by HSBC Private Bank was eye-opening in its findings.
According to the study, one in three business ventures either fail entirely or don’t generate the type of revenue that was originally expected. The reasons in which they fail or succeed can vary depending on industry, support system or resources.
However, the main question that this study investigates is:
What makes an entrepreneur successful?
The study results were based on a survey of 2,800 entrepreneurs with a net worth of $250,000 or higher by HSBC Private Bank, and the surveyed business people were eventually categorized into four groups:
Pathfinders– The most common type of entrepreneurs, motivated by financial security.
Trailblazers– The group seeking entrepreneurship as a way to improve themselves and most motivated by the opportunities that business ownership creates for them.
Game Changers– These people are inspired by the idea of making a difference. They want to make an impact in business and in the wider community.
Lifestylers– These entrepreneurs go into business because they want to ensure the needs of their families are met.
Which of these categories do you think holds the group of entrepreneurs that are the most successful?
Of these above groups, the profile that achieves the most success in business is the Game Changer group. How about that?
The most successful group of entrepreneurs is less motivated by money and more motivated by wanting to make a difference. On average, Game Changers make higher sales and also have a higher than average personal wealth than the other groups.
Now we come to the question of whether geographic location and culture impact entrepreneurial success.
The chart below indicates where each category of entrepreneur can be found by region:
The best business ideas are the ones that are meant to impact people’s lives
From the chart, it is clear that the most Game Changer entrepreneurs come predominantly from the Middle East and Asia (green).
What is interesting about the above chart, and as mentioned in the Forbes article, is that 63% of the business owners they screened in the Middle East are age 35 or younger. That is followed by both China and Hong Kong, where millennials make up just under half of all entrepreneurs in each country.
According to the same study, sales across Asian countries and the Middle East was almost USD $10 million, compared to just USD $5 million in the United States and Western Europe.
Further, successful entrepreneurs in China, Hong Kong and Singapore, and the Middle East are typically running businesses that are twice the size in revenue terms when compared to successful entrepreneurs in the United States and Western Europe, which shows that the cultural value of placing values above money arguably creates higher revenue on a huge scale.
The other value that is interesting from the study is the familial impact on entrepreneurs in certain parts of the world. As the study mentions:
Regardless of the country or culture of an entrepreneur, the one constant that cannot be ignored in the entrepreneurial equation is the role of a family. Not only is family the main motivation for some to strive and succeed; it is also a source of direct inspiration for many others.
This is another area where Asia and the Middle East separate themselves. With 56% of entrepreneurs coming from a business-owning background in China, Hong Kong, Singapore and the Middle East, these entrepreneurs are far more likely to join the family enterprise.
The established tradition of passing businesses from one generation to the next creates a pattern that allows these young entrepreneurs to forge their own paths in business.
The chart below shows the sales generated by entrepreneurs by region based on family history of entrepreneurship. Again, Asia and the Middle East are ahead in entrepreneurship, especially the business owners with a family background of entrepreneurship.
Do you think your geographic region dictates entrepreneurship?
With the tradition of family businesses being passed from one generation to the next, and by having so many Game Changer entrepreneurs, the Eastern world shows an intriguing path to entrepreneurship that is certainly worth examining closer. The economic power of the entrepreneurs in this part of the world is a unique one and continues to empower businesses in all sectors.