Amid widespread concerns about reluctance among the scions to carry forward the family business, a survey of the rich on Tuesday revealed that only small percentage of respondents "feel obligated" to take on the family business. The survey of approximately 200 high net-worth business owners with at least USD 2 million of investable assets found that almost four-fifths of Indian entrepreneurs still plan to pass their businesses to family members.
"Only 7 per cent of Indian respondents felt obligated to take on the family business when the business was passed on, reflecting a growing openness to exploring opportunities outside the family enterprise," the findings of the survey conducted by foreign lender HSBC said.
There are strong feelings of encouragement within multi-generational families, as 83 per cent of respondents said they felt empowered to pursue other interests when they first took over the business.
"While there is trust in the next generation to uphold the values and culture of the family business, there is also a need for open communication and robust succession planning," HSBC India's head for international wealth and premier banking, Sandeep Batra, said.
The report findings come within three months of veteran banker Uday Kotak panning the next generation at family businesses for lacking animal spirits and pointing out that fewer kids are keen on building and operating businesses.
The HSBC report also said that 88 per cent of Indian entrepreneurs trust the next generation's ability to manage family wealth, and also said that 45 per cent of the surveyed entrepreneurs do not expect their children to take over the family business.
The survey said family-owned businesses in India contribute approximately 79 per cent of the country's GDP, making it one of the highest ratios globally.
"Only 7 per cent of Indian respondents felt obligated to take on the family business when the business was passed on, reflecting a growing openness to exploring opportunities outside the family enterprise," the findings of the survey conducted by foreign lender HSBC said.
There are strong feelings of encouragement within multi-generational families, as 83 per cent of respondents said they felt empowered to pursue other interests when they first took over the business.
"While there is trust in the next generation to uphold the values and culture of the family business, there is also a need for open communication and robust succession planning," HSBC India's head for international wealth and premier banking, Sandeep Batra, said.
The report findings come within three months of veteran banker Uday Kotak panning the next generation at family businesses for lacking animal spirits and pointing out that fewer kids are keen on building and operating businesses.
The HSBC report also said that 88 per cent of Indian entrepreneurs trust the next generation's ability to manage family wealth, and also said that 45 per cent of the surveyed entrepreneurs do not expect their children to take over the family business.
The survey said family-owned businesses in India contribute approximately 79 per cent of the country's GDP, making it one of the highest ratios globally.
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