As women and Millennials gain more economic clout, how will Asia change?
It’s an opportune time to be a businesswoman in Asia. More women entrepreneurs are billionaires in Hong Kong and China than in any other region of the world, according to Forbes. And younger1 Asian high-net-worth individuals (HNWIs), men and women alike, are not only a growing economic force today—they also plan to leave both a financial legacy and a positive social legacy for the world, seeking to pass along wealth, businesses and values to their daughters as well as sons.
These are some of the findings from a survey of 1,051 HNWIs by The Economist Intelligence Unit, commissioned by RBC Wealth Management. The survey explored how wealth and legacy are being redefined across regions, genders and generations, and included 220 respondents in Asia—in Hong Kong, mainland China and Singapore—with US$1 million or more in assets.
Among the marked differences we found between Asia and the West, what stands out is how women and Millennials are more often included—and more often feel included—in traditionally older, financial structures usually dominated by men. Together, these two groups of HNWIs are reshaping family businesses, relationships and investments in Asia with a focus on their idea of a dual financial and social legacy.
“There can be no question anymore that China is the best place in the world to be a woman entrepreneur,” Rupert Hoogewerf, chairman and chief researcher of Hurun Report, is quoted as saying. “There is no Chinese in the top 10 of the world’s self-made billionaire men, yet six of the top 10 world’s self-made women billionaires are from China.”2
A variety of factors has contributed to creating more opportunities for people in general in Asia to generate wealth. According to our survey, HNWIs around the world agree, for example, that better education, investments and new technologies have all provided more opportunities to generate wealth. However, Asian HNWIs, by a slim margin, choose those options less often than people in the West, and more often cite “greater opportunity for underrepresented groups to advance in the workplace.” Notably, 24% of Asian HNW women report being business owners or entrepreneurs in the survey, compared with 15% of men.
That greater opportunity is probably related to the finding the majority of Asian HNWIs—75%—think society has become more inclusive, compared with 58% in the West. Additionally, about 45% of the HNW women surveyed in Asia—notably more than the share in other countries—think either openness to wealth accumulation or greater resources to support starting a business have created opportunities for people to generate wealth.
Although European investors have a higher proportion of their assets in sustainable investments compared with those in North America and Asia,3 Asian HNWIs appear eager to catch up. In fact, 76% of HNWIs in Asia consider impact investing to be a form of giving, compared with 50% in the West. When compared to respondents in the West, Asians say more than twice as often they align their investments with giving goals, 47% compared with 21% respectively.
This widespread interest in aligning investing and giving appears to be a recent change. Professor Shawn Cole, who teaches and conducts research on financial services, social enterprise and impact investing at the Harvard Business School, noted that “In China there’s the view that the government should be doing this. If you define impact investing as deploying capital both for financial and traditionally non-financial considerations, it turns out that there a lot of state or semi-state Chinese financial institutions that are deploying capital exactly for these purposes. So there may be a sense in China that the government’s already doing these things.”
There are vivid examples of women leading the charge in impact investing and impact entrepreneurship. Take, for example, Hu Weiwei, who in 2015 combined her concern for the environment with urban eco-mobility and co-founded a start-up called Mobike, a smart bikeshare company based in Shanghai. When the company was sold to tech giant Meituan Dianping in April 2018, in a cash-and-stock deal reportedly worth US$2.7 billion, Hu, who is 36, had built Mobike into the world’s largest such company. In December 2017, the company received a Champions of the Earth award from UN Environment in recognition of its contribution to the advancement of low-carbon public transport.
The interest in combining financial and social goals is indeed intense among younger HNW Asians of both genders: 86% of the younger Asians we surveyed think they have more opportunity to tackle societal issues through investing, compared with 67% in the West. And the share of younger Asians saying they align their investments with their giving goals jumps to 54% from the total of 47%. Among Millennials4 globally, the figure is only 42%, suggesting Asians are leading in a cause the rest of the world will catch up to.
“Millennials have a very different perspective on capital,” says Vikram Gandhi, a senior lecturer of business administration at the Harvard Business School. “It’s not necessarily about sacrificing financial return. It’s about how they can use their capital not just to generate return but to influence outcomes that are important to them from a values perspective.”
As many Asians look to invest for impact, they are also seeking professional advice. When compared to other markets, a higher share of HNWIs in Asia say professional financial resources are more important to wealth planning now than in previous generations. But how they get advice and choose to invest is shifting: 88% of Asian HNWIs think the next generation is more likely to use online resources (e.g., social networks, direct investing platforms) to preserve and protect wealth.
Most HNWIs in Asia want to be able to pass on legacies of both financial and social value. For example, 76% of Asian HNWIs think they have an obligation to transfer wealth to the next generation, compared with 61% in the West. Even more in Asia, 81%, think they have an obligation to transfer values, compared with 73% in the West.
“The first generation of wealthy entrepreneurs, especially in China, has a really strong desire for their children to accumulate cultural capital—to be worldly, well-educated and sophisticated,” notes John Osburg, a professor in the anthropology department at the University of Rochester and author of Anxious Wealth: Money and Morality Among China’s New Rich.
Meanwhile, Asian HNWIs most often define their legacies as relationships with family (61% say so), but what they do for their family financially follows more closely behind than for HNWIs in other regions (54% compared with 45%). Overall, Asian HNWIs, particularly women, more often than those in other regions define legacy in both financial and social terms, rather than being weighted significantly more towards relationships.
Another value-driven focus, the social trend of greater gender equality, seems likely to intensify as the current generation passes on their financial legacies. More Asian HNWI business owners want to pass their businesses on to their children than those in the West, but the recipients are changing. In the past, in China especially, following the death of the patriarch, family businesses would almost always automatically pass to brothers or sons. Now, China’s one-child policy as well as greater inclusion seem to be driving change. Antoinette Hoon, a partner in PwC Hong Kong’s financial services practice specialising in private banking, notes “Older business owners are passing down to the next generation irrespective of whether they’re male or female. That’s a big change from ten years or so ago.”
Mobike’s Hu is a good example of how that is changing. She frequently takes her seven-year-old son to the office with her, where he is said to occupy himself by counting the number of bicycles in the parking lot. In addition to acquainting him at an early age with the company she founded, she believes that showing him where and how women work is an important part of his financial and social education5.
Overall, our data suggests with increasing access to education, technology and global networks, greater resources to support starting businesses and more inclusiveness overall, HNW women and Millennials in Asia are poised to go even further in both increasing their fortunes and making a positive impact on the world.
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