Entrepreneurship in the technology sector is now the biggest area for rapid wealth creation. See more of the key findings from volume 17.
Residents of the United States, please read this important information before proceeding
Entrepreneurship is now the dominant source of wealth among the very wealthy. Technology, globalisation and the rise of emerging markets have led to an explosion of entrepreneurship that is now a key source of wealth among the world’s richest people. In our survey of high net worth individuals, respondents at the upper end of the wealth spectrum are much more likely than those with more modest wealth to have become rich through entrepreneurship. We also find that entrepreneurs and business owners have been better able than other respondents to have increased their wealth during the downturn.
Technology is the sector in which wealth creation can happen most quickly. Survey respondents with business interests in technology accumulated their wealth more quickly than those with interests in any other sector. Although the technology sector is as susceptible to booms and busts as any other, its rapid pace of change, high growth prospects and scalability have made it an increasingly dominant source of wealth creation among high net worth individuals around the world.
A high tolerance for risk is a prerequisite for successful entrepreneurship. Wealthy entrepreneurs in our sample have a higher risk tolerance than those who have acquired their wealth through inheritance, earnings or bonuses. But this appetite for risk must go hand in hand with an acceptance of volatility. Entrepreneurs and business owners are also more likely to say that their wealth has fluctuated a great deal over time.
Technology, globalisation and the rise of emerging markets have led to an explosion of entrepreneurship that is now a key source of wealth among the world’s richest people.
Inheritors feel a stronger duty and responsibility for philanthropy than entrepreneurs. In general, those who have inherited their money are more likely than entrepreneurs to consider philanthropy as an important current use for their wealth. They also emphasise more strongly a sense of duty and responsibility for philanthropy. For many inheritors, philanthropy forms part of the stewardship of wealth and is a way of ensuring that the family’s values and mission are passed down through the generations.
Entrepreneurs and business owners are taking an active role in philanthropy. Those entrepreneurs and business owners that do engage in philanthropy often want to play an active role and apply the skills and expertise they have acquired in their careers to achieve positive outcomes with their donations. There are, however, important differences depending on the stage in life that the entrepreneur has reached. Individuals who are still building their business have intentions to become more philanthropic, but have a tendency to postpone this process to some point in the future, perhaps when they have achieved a successful exit.
The experience of financial ups and downs creates a strong tendency for philanthropy. Individuals whose wealth has either increased or decreased significantly are more likely than those with more stable net worth to become involved in philanthropy. This suggests that significant changes in wealth can foster a stronger social conscience, perhaps because the wealthy have experienced more modest times, or because they feel especially fortunate to have seen their wealth increase so significantly.