The next decade is sure to be a time of unprecedented change, as the pace of innovation grows and the world continues to get smaller. While change can be both exciting and intimidating, one thing is certain—change is upon us
1- How the World Is Changing––The Global Opportunity
In the past, much of the world’s population has found it challenging to meet basic needs like food, shelter and water. In 2006, for the first time ever, more than half of the world’s inhabitants were considered middle class.1 Instead of struggling to survive, the new middle class is buying clothing, washing machines, kitchen appliances and other products many of us in the Western world may take for granted
The World’s Middle Class Is Growing
Percentage and Size of Middle Class Population in the World
A GROWING MIDDLE
CLASS EQUALS OPPORTUNITIES FOR INVESTORS
The projected growth of the middle class is expected to lead
to an increase in spending and consumption. Traditionally, spending by the
middle class has been the highest in Western countries. However, over 80% of
the projected growth in demand is expected to come from Asia alone
THE GLOBAL POTENTIAL
The U.S. is
considered a mature consumer market. For example, 82% of Americans own a car
and 89% own a cell phone.5 However, in other parts of the world the consumer
market has more room for growth. As more people move into the middle class,
it’s creating a potentially significant increase in consumption of goods and
services.
In the illustration below, the blue bars show market
penetration of different products and services in multiple countries. The grey
bars show the potential increase in consumption based on population
2- Our World Is More Connected than Ever
The ubiquitous smartphone is synonymous with how much people around the world are connected these days. It also represents a new speed of information from a much wider variety of sources. And the sharing of information is doing more than connecting people, it’s driving demand for products and increasing the speed of commerce.
COMPANIES AROUND THE WORLD ARE LINKED TOO
Here is an example of the sum being greater than the
individual parts. The iPhone is a truly global product—engineered in the U.S.
and manufactured in China with parts from around the world.
