JEDDAH — Ninety one percent of Middle East high net worth individuals (HNWIs) agree that viewing failure positively is essential for an economy to grow, in comparison to 7 percent globally. Compared to those in Western economies, respondents from the MENA region tend to have a more positive view of setbacks, show greater persistence and better see the benefits of overcoming adversity, the latest report in the Barclays Wealth Insights series launched Monday revealed. According to the US Securities and Exchange Commission, a person is said to be a high net worth individual when his net worth exceeds a certain amount, usually defined at $1 million. The overwhelming majority of respondents in the Middle East (91 percent) and Asia (80 percent) believe that viewing failure positively is essential for an economy to grow, whilst these figures drop to 71 percent and 69 percent in the US and Europe. In addition, respondents in Asia and Central & South America are far more positive about the opportunities presented by the recent global crisis (53 percent and 60 percent) compared to the US and Europe (44 percent and 42 percent). Based on a global survey of more than 2,000 HNWIs comprising entrepreneurs, business leaders and investors, the report titled “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. More respondents in the Middle East (81 percent) than any other region believe that past failure in entrepreneurial endeavors increases the chance that a new business will succeed. This attitude to failure is further demonstrated when respondents were asked whether they would hire an individual who had experienced entrepreneurial failure; within the MENA region, Saudi (89 percent) and Qatari (86 percent) respondents confirmed that they would, compared to 61 percent of UAE respondents. Elsewhere, just 42 percent and 47 percent of respondents in the UK and Japan respectively would hire someone with a failed enterprise on their CV. This figure drops to just 25 percent in Monaco. The research on persistence reveals that 74 percent of Saudi HNWIs are of the view that entrepreneurs should persist if their business is floundering, as opposed to cutting losses. Within the MENA region, 36 percent of Qataris are most likely to cut their losses when the business is underperforming. However, an overwhelming 100 percent believe that past failure will increase chances of future success in entrepreneurial endeavors. The report showed 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 percent each). Chance and connections, on the other hand, are seen as much less important factors, at 16 percent and 15 percent respectively. In the MENA region, the UAE ranks highest when it comes to belief in 'skills/intelligence' and ‘effort/hard work', at 35 percent and 36 percent respectively. In Qatar, respondents believe that 34 percent of success is due to chance which is the highest of all countries surveyed. Dr. Greg B. Davies, Head of Behavioral 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." When asked about learning from failure there are variations within the MENA region amongst respondents who have experienced failure. Respondents in Qatar 73 percent (the highest globally), UAE 45 percent and Saudi 34 percent cite that they have learnt a great deal from past failures. When these respondents were asked if they were able to bounce back quickly from failure the responses were similar; 85 percent in Qatar agreed with this statement, compared to 45 percent in Saudi and 37 percent in UAE. 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 percent of respondents in the US and 30 percent in Europe regard themselves as entrepreneurs, compared to 47 percent in Asia, 50 percent in the Middle East and 55 percent in Central & South America. In addition, 56 percent of these entrepreneurs globally say that they learned a great deal from failure, compared with 41 percent of non-entrepreneurs. Rory Gilbert, Managing Director and Head of Wealth and Investment Management, Barclays, Middle East and North 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. Governments across the globe have highlighted the crucial role that entrepreneurs will play in kick-starting the global economy, so understanding their psyche, their culture of perseverance and how this differs across regions will be critical in making this opportunity become a reality." The report noted some significant findings relating to the mindset of individuals in different regions. In the Middle East, 83 percent 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 percent and 44 percent respectively. The report indicated that 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 said “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." — SG
