Given how competitive businesses are today, it would be unsurprising if entrepreneurs lived up to the Wall Street character Gordon Gekko’s creed that greed is good. While that still seems to be the case for baby boomers, it seems as if younger generations are looking beyond personal financial gain. Instead, they want to make the world a better place.
That’s the result of a survey by HSBC Private Bank. Having surveyed over 3,700 business leaders from 11 countries, 24% of young entrepreneurs under the age of 35 prioritise having a social impact in business compared to only 11% of moguls aged over 55.
Interestingly, it seems as if being more prone to make a great social impact also comes with an ambition to scale quickly. The report showed that 33% of the entrepreneurs projecting high growth ambitions launched their business with the intention of creating positive social impact, compared to 28% of those projecting the lowest growth.
While that may be great news to society as a whole, this also spells out good tidings for the next generation of startup founders as those who prioritise social impact are more inclined to become angel investors than the ones focusing on personal gain. As an example, the research suggested that 55% of impact-focused entrepreneurs were giving back to the startup community as opposed to only 44% of entrepreneurs who prioritised big earnings. Even more encouraging, they are also more likely to mentor the next generation of founders.
To bring home the point, the researchers revealed that 57% of young head honchos are using their money to invest back into startup ecosystem compared to 29% of those over 55. In total
45% of UK based entrepreneurs are angel investors.
Commenting on this generational shift, Stuart Parkinson, global chief investment officer at HSBC Private Banking said: “It’s clear younger entrepreneurs want to do good and we would be wrong to dismiss this as youthful idealism that will act as a brake on financial success. They know that their business cannot have the impact they want without sustainable growth, and they are focused on achieving both.”
While it’s difficult to say what has encouraged entrepreneurs to develop a social conscience, it seems that it’s not only good for business but for other founders too.