- 74% of global high net worth individuals (HNWIs) agree that viewing failure positively is essential for an economy to grow, according to latest edition of Barclays Wealth Insights
- South African respondents believe that 44% of success – the highest percentage of all countries surveyed – is due to effort and hard work, and attribute only 7% of success to chance
- Entrepreneurs embrace failure: 56% of entrepreneurs say that they have learned a great deal from failure, compared with 41% of non-entrepreneurs
Johannesburg, 12th November 2012: Three quarters (74%) of global high net worth individuals (HNWIs) agree that viewing failure positively is essential for an economy to grow. However, respondents from fast-growing emerging markets tend to have a more positive view of setbacks, show greater persistence and better see the benefits of overcoming adversity, according to the latest report in the Barclays Wealth Insights series.
The overwhelming majority (91%) of Middle Eastern respondents and 80% of those in Asia believe that viewing failure positively is essential for an economy to grow. In contrast, these figures drop to 71% and 69% in the US and Europe respectively. In addition, respondents in Asia and Central & South America are far more positive about the opportunities presented by the recent global crisis (53% and 60%) compared to the US and Europe (44% and 42%).
Launched today (12 November 2012) and based on a global survey of more than 2,000 HNWIs comprising entrepreneurs, business leaders and investors, the report, If at First You Don’t Succeed… Mapping Global Attitudes to Adversity, provides an in-depth study into the different ways in which individuals around the world view and respond to setbacks. The report explores how different cultures value traits such as persistence and optimism, the role of luck and how entrepreneurs view setbacks as a stepping stone to future success.
The report reveals a contrast in the number of people who see themselves as entrepreneurs in Western versus Eastern economies. According to the research, just 29% of respondents in the US and 30% in Europe regard themselves as entrepreneurs, compared to 47% in Asia, 50% in the Middle East and 55% in Central & South America. In addition, 56% of these entrepreneurs globally say that they learned a great deal from failure, compared with 41% of non-entrepreneurs.
Nomkhita Nqweni, Managing Executive, Wealth Management, Barclays Africa, said, “Traditionally, many regard Europe and North America as entrepreneurial hotbeds, but these findings support the widely held belief that we are seeing a global shift, with a fear of failure perhaps holding these ‘established’ economies back. The report reveals that those in emerging markets, particularly in Asia, are more likely to possess a culture of perseverance. Given the current economic climate, there is a real opportunity for entrepreneurs around the world to play a big part in kick-starting a recovery, but this culture needs to be fostered across all markets before it can become a reality.”
The report reveals that respondents believe that being successful is significantly reliant on ‘skills/intelligence’ and ‘effort/hard work. On average, over a third of respondents attributed success to these factors (35% each). Chance and connections, on the other hand, are seen as much less important factors, at 16% and 15% respectively. This is echoed in South Africa where 38% of success is attributed to ‘skills/intelligence’ and 44% of success (which is the highest percentage globally) to ‘effort/hard work’ compared to only 7% and 11% for chance and connections respectively.
However, Dr. Greg B. Davies, Head of Behavioural Finance at Barclays, warns against being too self-assured, commenting: “Strong belief in skill rather than luck could give you a degree of over-confidence in future decisions. This mindset can be hazardous to the long-term security of a business, or to an investor, as you end up taking more risks on the assumption that your success has been wholly attributed to your own good decisions.”
The report reveals some significant findings relating to the mindset of individuals in different regions. In the Middle East, 83% of respondents agree that anyone who works hard enough can become a successful entrepreneur. The corresponding figures from the US and Europe are just 49% and 44% respectively.
Entrepreneurs in emerging markets face a challenging environment when it comes to setting up a business and this would suggest entrepreneurs in these markets require a greater level of persistence. This is reflected in the report findings which show that 88% of respondents in India and 74% in Saudi Arabia agree that if their business is failing, an entrepreneur should persist rather than cut their losses, in contrast to 54% of respondents in South Africa. In addition, the report reveals that 34% of entrepreneurs globally say that failure encouraged them to try again, compared with 23% among non-entrepreneurs.
The Psychology of Success
Learning from and overcoming challenges is an important part of an entrepreneur’s journey and this is reflected in particular among respondents who have experienced failure in Qatar, China and Hong Kong, where 73%, 71% and 65% of respondents cite that they have learnt a great deal from past failures. Conversely, only 36% of South African respondents believe they learnt a great deal from past failures.
Similarly, only 21% of South African respondents who have experienced failure agreed that they are able to bounce back from it quickly, a figure which is similar to that of US respondents at 23%. At the other end of the scale, 73% of those in Qatar found that they could bounce back quickly from a setback. Over half (58%) of South African respondents believe that past failures would count against them, although two thirds (66%) stated that past failure increases the chances of future success.
The report reveals the personalities of entrepreneurs in different regions of the world, with those in the East determined to overcome setbacks and persevere. There is perhaps another element at play though, as the broader economic climate and mindset of governments, regulators and businesses impact on the ability of entrepreneurs to succeed.
Paul Ormerod, an economist and author of Why Most Things Fail…And How to Avoid It, suggests that setbacks are inevitable and long-term success relies on having clear risk mitigation policies in place. He comments, “The usual approach is to try to predict potential problems and then put plans in place to stop them happening. But you cannot avoid failure. You’ll never get round this fundamental problem, no matter how smart you are. It’s inherent to all evolving systems, which is exactly what human social and economic systems are. Therefore, we come back to the power of persistence, which the East appears to be embracing. The questions are what the West needs to do counter this potential power shift, and what the longer term implications are.”
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