By Herbert Meyer
It’s easy to be a pessimist, but there’s an extraordinary development beyond our borders that’s not getting nearly the attention it deserves: The world is getting very rich, very fast.
Here are the numbers: By 1980 or 1990, about two billion people had emerged from poverty. Since then, another half billion or so have crossed this line — many of them in China and India. In the last six years about 20 million Brazilians have emerged from poverty, and today on the continent of Africa the number of people with disposable income is just over 300 million. If the present trend continues, within our lifetime — certainly within our children’s lifetime — the majority of human beings will have emerged from poverty.
All this is happening because, around the world, more and more leaders understand how best to create wealth for their people: Simply put, it’s the Free Market — that extraordinary combination of property rights, the rule of law, a functioning financial system, reasonable regulations and moderate taxes. That’s it — put this combination into effect and a population emerges from poverty. (How odd — and how depressing — that at precisely the moment in history when leaders around the world have come to understand how the Free Market creates jobs and wealth, so many politicians in the West are so determined to replace the Free Market with the sort of government-managed economy that’s failed so spectacularly in so many countries.)
This remarkable trend — from a world that is mostly poor to a world dominated by a growing middle class — is the most under-reported news story in the world. And it means that the customer base for every product and service we can provide is growing at a rate of between 50 million and 100 million new customers every year.
As the world emerges from poverty, and as this global middle class grows, the demand for energy will increase sharply. Conservation is a wonderful idea, but you cannot bring tens of millions of people into the middle class without more fuel to drive factories, to heat and cool homes, and to move people around. Demand for food, especially for protein, also will rise sharply in the decades to come. After all, as people emerge from poverty they eat better. We’ll need more power stations, roads, houses, office buildings, shopping centers, hospitals, schools and suburbs. People purchase health care when they can afford it, and they want more education for their children. And because we’re human beings, people want entertainment.
So the growth industries of the 21st century will be energy, food, infrastructure, health care, education, and entertainment. And since the trick will be to bring the world out of poverty without also destroying our environment, the products and services that succeed will be those which are clever, inexpensive — and green. That’s why these qualities have outgrown the anti-business environmental movement and become, instead, the driving force of global marketing.
Creating products and services for the world’s emerging middle class won’t always be easy, and neither will actually selling these products and services — and getting paid for them — in countries whose governments, laws, and regulations haven’t always caught up with the modern world. Like everything else, this will take longer, and cost more, than we’d like.
But the global customer base is growing at a rate of tens of millions of new customers every year — and that’s the best news any CEO will ever hear.
Formerly an associate editor of Fortune magazine, Herb Meyer was Special Assistant to the Director of Central Intelligence and Vice Chairman of the CIA’s National Intelligence Council during the Reagan administration, and is widely credited with being the first senior U.S. Government official to forecast the collapse of the Soviet Union — a forecast for which he later was awarded the U.S. National Intelligence Distinguished Service Medal, the intelligence community’s highest honor. Herb is author of two new eBooks, The Cure for Poverty and How to Analyze Information.
Originally published: Jan 30, 2012