Change among business owners: Generation Y has become the new engine of Hungarian businesses

Generation change: passing the baton can no longer be postponed

Generation X has been decisive in the domestic corporate world for more than two decades. According to OPTEN data, they have made up more than half of the ownership and management circle since 2001, and their role is still stable. Now, however, they – and the previous generation – have also reached the threshold of the next change. Generation Y is stepping into their place with increasing determination, while Generation Z is also knocking on the door. More and more consulting and asset management companies are incorporating services related to generational change into their portfolios, as flexible ownership inheritance and maintaining business continuity are one of the biggest challenges of the coming years.

After the turning point: Y is getting stronger, X is stable, but the company base is narrowing

According to OPTEN data, in 2024 the ownership ratio of generation X continued to stabilize at around 49%, so they still constitute the largest group of owners in the domestic business world. At the same time, their number decreased by nearly 30 thousand in three years, which is partly a consequence of the permanent decline in the number of companies and partly a consequence of the generational rearrangement. While members of Generation X are gradually retiring, Generation Y has become the second strongest ownership group with a rate of 26% and is increasingly present in management positions.

Among those eligible to subscribe to companies, Generation X still represents the majority (52%), but Generation Y is gradually gaining strength here too, gaining share at the expense of the baby boom and Generation X. Younger generations first appear in the ownership circle and then gradually enter the management level. Generation Y has already become the engine of growth, while Generation Z has begun to actually enter the corporate world. This process can also be seen in the largest companies; interestingly, in companies with billion-dollar sales, there are three times as many members of Generation Y in management as in the ownership circle.

“Generation X has been a defining player for more than two decades, but now it is time to actually pass the baton. The key question for the coming years will be how smoothly this transition can take place”

– said Csaba Alföldi, company information expert at OPTEN.

Younger generations clearly dominate in new company formations

The generational change in company formations has already taken place, the proportion of younger generations has continued to increase, while the overall spirit of entrepreneurship has declined. Generation Y remained the most active age group in 2024, accounting for 43.7% of new owners, while the weight of Generation Z rose to over 16%. The share of Generation X fell below 35%, and that of the baby boom generation fell below 5%.

All this happened in a more restrained market environment, with a third fewer new companies being created in three years than in 2021, so the activity of younger generations is now the main source of entrepreneurial dynamics. Generation Y and Z together represent nearly 60% of those eligible to register a company.

“The younger generations have not only entered the entrepreneurial space, but are also setting its direction. The generational realignment that began after the epidemic is now a completed process, and the Hungarian company formation structure has entered a new era.”

– said Csaba Alföldi, company information expert at OPTEN.