Yes, tech billionaires have become more prevalent in the last 20 years, so to have hedge fund and private equity moguls, and first generation retail and property tycoons. But serious wealth is still predominantly tied up with family businesses.
A quick analysis of the recently released UK Rich List shows that 56% of 1,000 richest people in that country have a family connection to their wealth. The family connection is mostly through a family business, but is also through inheritance, and working with family members in a first generation business. So family is still very important in UK wealth. And if it is important in the UK, it is likely to be even more important in many other countries. That’s because family businesses in Britain comprise a much smaller part of the economy than in most other countries.
Of course, family business dynasties might be better to their stakeholders than non-family business dynasties. So having a lot of families linked to businesses might be good for society, at least in the abstract. Nevertheless, the predominates of family-based wealth doesn’t auger well for social mobility among today’s and tomorrow’s billionaires and multimillionaires. The barriers to entry to the top echelons of society become more difficult if much wealth is inherited.
WealthSpike doesn’t do morality, but this might not be such a good thing for the fabric of any society, particularly if it’s linked to greater inequality. The best way to create better mobility is to encourage as many entrepreneurs as possible – and preferably those without a family business behind them…