Hitting the Sweet Spot: the growth of the middle class in emerging markets
The world has seen two great expansions of the middle class since 1800 — and we are living through the third.
The industrial revolution created a substantial middle class in Western Europe and the United States in the nineteenth century. Another period of middle class growth occurred after the Second World War, once again in Europe and North America, and also in Japan. Today’s expansion is happening in the emerging markets (EMs). In Asia alone, 525 million people can already count themselves as middle class — more than the total population of the European Union.
Over the next two decades, it is estimated that the middle class will expand by another three billion people, coming almost exclusively from the emerging world.In this report, we examine the growth of the middle class in EMs and explore how this will change both the developing and the developed world. By 2030, so many people will have escaped poverty that the balance of geopolitical power will have completely changed — global trade patterns will be unrecognizable too. The intervening twenty years will see more and more people enter the middle classes with new money and new demands. Economists are hoping that this growing cohort of consumers can help to keep the global economy afloat. Companies accustomed to serving the middle-income brackets of the old western democracies will need to decide how they can effectively supply the new bourgeois of Africa, Asia and beyond.