GenNext business heirs under fire for ‘losing entrepreneurial grit’; experts weigh in

Some experts saw the shift reflects a loss of passion for building companies, while others see it as a natural progression in a fast-changing economy

India’s next-generation billionaires are finding themselves at the centre of a debate: Are they building businesses or merely trading and investing? Unlike their predecessors who created industrial empires, many young wealth inheritors and entrepreneurs are believed to be prioritising stock markets, private equity, and venture capital.

The debate comes as industrialists, including Uday Kotak and Harsh Goenka, have voiced concerns over the priorities of the next generation of business leaders.

Are young billionaires playing safe? Here’s experts have to say:

Some experts saw the shift reflects a loss of passion for building companies, while others see it as a natural progression in a fast-changing economy. Devina Mehra, founder, chairperson and MD, First Global, pointed to the difficulties in running manufacturing businesses in India.

“Even if you look at the history of business families, normally beyond the third generation, it becomes difficult to carry the legacy forward,” she told CNBC-TV18. The first generation had the drive to build, while the second still experienced some of that struggle. By the third generation, born into luxury, the hunger often fades — perhaps paving the way for a new wave of ambitious entrepreneurs to replace traditional business families, Mehra said.

Deepak Shenoy, founder of Capitalmind, questioned the idea of business legacies defining the future. It is the determination of self-made individuals, not the wealth of heirs, that will drive the next wave of industries, he said.

“The idea now is that the scions of the businessmen are now investing in first-generation entrepreneurs, also called as start-up investing, which is a great thing. If you don’t have the hunger, at least give the money to a person who has it,” he told CNBC-TV18.

It’s crucial to support and uplift new entrepreneurs, Shenoy said, adding any hurdles they face should be addressed and reformed to create a more inclusive and dynamic business landscape.

The debate

In an opinion piece in The Economic Times, RPG Group chairperson Harsh Goenka highlighted the difference between past entrepreneurs’ grit and today’s wealthy heirs, who, he argued, chase "passive income, active vacations, and aggressive networking at yacht parties" instead of immersing themselves in business challenges.

Goenka said there was a time when being born into a business family meant inheriting responsibility before wealth. He recalled that successors once spent their youth understanding supply chains and factory floors, while today’s inheritors were busy "holding a golf club, a champagne flute, or on the steering wheel of a brand-new Lamborghini".

He pointed to Kotak Mahindra Bank founder Uday Kotak’s recent remarks that India’s business successors were prioritising stock market speculation and asset management over building and running businesses.

"I would love to see this generation be hungry for success and build operational businesses. Even today, I firmly believe that the next generation must work hard and create businesses rather than becoming financial investors too early in life," Kotak had said.

Economist Sanjeev Sanyal said he was happy that finally the issue was being talked about.

"I am glad that the business elite has woken up to the real danger that their heirs are becoming too soft. Instead of leveraging their wealth to take bigger risks, they create ‘family offices’ and spend their time fighting with their cousins over the family art collection," Sanyal said.

Sanyal, a member of the Prime Minister’s Economic Advisory Council, said the parents of young business leaders should insist on their heirs "being on the shop floor rather than doing Ivy League MBAs that are no more than finishing schools".

On being questioned about the increasing interest of next-gen business heirs in markets, Shenoy said, “In general, if you look at the markets returning 12 to 13 percent over a very long period of time and perhaps mid-caps returning even more than that, this is roughly a reasonable ROE (return of equity) for even a manufacturing business to have.”

“Although people target 15-20 percent, they end up with 11-12 percent anyways. So, if you are getting an ROE of 12 percent on a manufacturing business that you set up then having a ROE of 12-13 percent in markets is roughly the same. Going the investment route is perfectly fine.”