Today Graeme Codrington and I are part of the London Business School team working with the leadership of a petroleum company from the Middle East. The course is being held in London and we were talking to them about disruptive forces. One of the forces that will change the world is a growing middle income population. Our studies show that by 2050 the global GDP will quadruple, over 90 million middle class consumers are joining the global economy every year until 2050. That’s an economy the size of Germany being added to the global economy every year. By 2025, Mckinsey, a large consultancy, believe that global consumption will increase by thirty-five-trillion US dollars. In 2009 middle class was 1.8 billion, this will rise to 3.2 billion by 2020 and 4.9 billion by 2030. Asia is almost entirely responsible for this growth. Its middle class is forecast to triple to 1.7 billion by 2020. By 2030, Asia will be the home of 3 billion middle class people. It would be 10 times more than North America and five times more than Europe.
This growth in global affluence, especially in the emerging nations is going to have a huge impact on business. Do you understand the impact it will have on your business or your industry? The change will be unprecedented. Are you thinking through what the new markets will be? What cities will you concentrate on (not what countries)? What competitors will emerge as companies in emerging nations become more cash rich, sophisticated and more competitive?
If you are not thinking through these questions and many other important one give TomorrowToday a call we can help you think through this and other TIDES of change
For more information of this shift read this excellent article on BBC News click on the link below
[here is an extract…]
So who counts as middle class?
According to organisations like the United Nations and the Organisation for Economic Co-operation and Development (OECD), it’s someone who earns or spends $10 to $100 per day.
That’s when you have disposable income and enough money to consume things like fridges, or think about buying a car.
As the UN suggests, the growth is being driven by industrialisation. The industrial revolution of the 19th Century transformed the economies of Britain, the US and Germany. The move from agrarian to industrial societies generated income rises that created the middle class.
Now it’s the turn of emerging economies, particularly in Asia. In Indonesia, for instance, investment now exceeds 30% of GDP, a sign that there is more manufacturing.