- Business - Finding purpose

By SuperyachtNews

Finding purpose

How the virtuous business practices espoused by soft capitalism are changing the world of superyachts…

“The world’s UHNWI population is forecast to rise 27 per cent over the next five years. However, the rapidly changing geopolitical and regulatory environment, along with shifting societal attitudes towards wealth, will require thoughtful reassessment of what it means to be wealthy”, so reads the opening statement in the Wealth section of Knight Frank’s 2020 edition of The Wealth Report.

This statement alludes to a phenomenon that is having a clear impact on the superyacht market. Yes, the global UHNWI population continues to grow at speed, but the latest crop of wealthy individuals does not necessarily share the same attitude towards consumption as their contemporaries. Furthermore, the attitudes of many established UHNWIs are also changing. It is therefore imperative that the superyacht market is able to adapt its offering to complement the evolving attitudes of the world’s ultra-wealthy population.

During the launch of The Wealth Report at an exclusive event held at The Biltmore hotel, London, Liam Bailey, Knight Frank’s global head of research, addressed guests and explored a number of the ways that world of wealth is changing. “The FT called 2019 ‘the year that capitalism went cuddly,” explained Bailey. “This was the year that companies began falling over each other trying to prove that they were doing good for the environment, for society, for their employees or for their workers. 73 per cent of UHNWIs want their investments to have a positive environmental outcome. We believe that 2020 will be the year that the wealthy fully embrace the move towards a softer form of capitalism.”

"73 per cent of UHNWIs want their investments to have a positive environmental outcome."

It is risky, at times, to make direct comparisons between the worlds of investment and superyachts. The former is almost entirely concerned with the generation of wealth and the latter, sufficed to say, is not. Nevertheless, the softening of capitalism that Bailey refers to will have a direct impact on the yachting market.

In the early 1970s Milton Friedman explored the notion that a company’s sole social responsibility is to produce profits for its shareholders, it became known as The Friedman Doctrine. Bailey, however, paints a picture of the wealth landscape where investors and CEOs are increasingly putting “purpose” at the centre of their business models.

“This focus on the wellbeing of the planet, employees and society is not, however, an entirely philanthropic venture, there is a huge win for investors when they get it right,” continues Bailey. “There is $1 trillion lost in productivity globally because of depression and anxiety in the workplace. For that reason, the opportunity and growth in demand for healthy outcomes is driving innovation.”

There are essentially two arguments for focussing on sustainability and wellbeing in business. Firstly, there is plenty of profit to be made from sustainable business, as has been proven by the booming demand for impact investment, and, as Bailey highlights, there is plenty to be lost if employees are treated poorly. Secondly, there is the moral/ethical argument that many UHNWIs like investing in purposeful enterprises and treating there employees well simply because it is the right thing to do, it makes them feel good and creates enjoyable working environments. Both arguments are important for the superyacht community.

When an individual’s attitude changes, it is rarely confined to a single act or judgement, it permeates throughout their life choices. In other words, when one decides to focus on sustainability and wellness, this attitude is not restricted to the workplace (unless it is a PR stunt) it will further impact social decisions and increasingly become a part of your private life.

As such, one can assume that a movement towards “purpose” in business will lead to the desire to seek purpose within one’s social life. Indeed, within the superyacht market we are already seeing a growing desire for superyachts to have sustainable options, as well as a number of owners and guests seeking to dedicate some of their time on board to conservation projects, whether it be providing aid and resources to local communities or engaging in a scientific project to help protect the local environment or a region’s biodiversity. The market, therefore, must continue to help owners and guests satisfy their purpose.

Equally, if business owners are increasingly yielding the benefits of focussing on the wellbeing of their human capital, one can hope that similar practices filter down to ensure that crew are properly cared for when on board. By focussing on the wellbeing of crew, owners have the opportunity to create more enjoyable experiences for themselves, as well as avoiding the additional expense that a continuous search for employees invariably yields.

The worlds of business and superyachting often seem diametrically opposed, and yet the two are also inextricably linked. Indeed, superyachts are often likened to businesses when one considers their structure and operation. If one wishes to understand the future of yachting, therefore, it may be wise to consider the future of business first.

In continuation of a long-standing relationship, The Superyacht Agency is once again the official superyacht intelligence provider for Knight Frank's The Wealth Report 2020.

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Finding purpose


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