"Eight billion opportunities"
"Eight billion opportunities" – A new study by Roland Berger reveals the opportunities and challenges of future population growth for businesses
- Global population set to grow to 8.3 billion by 2030
- 95% of population growth will be in emerging and developing countries
- More than half of the global gross domestic product (GDP) will be generated by emerging nations in 2030
- A growing middle class and higher standards of living in these regions means exciting business opportunities for firms in many industries
"Many aspects of the world will change fundamentally within the next two decades. The global population will grow to more than eight billion by 2030. The economic focus will also shift toward newly industrializing and developing nations. These countries have enormous potential for businesses," says Bernd Brunke, Partner and Member of the Global Executive Committee of Roland Berger Strategy Consultants.
Urbanization and improving standards of living
Every day more than 178,000 people in newly industrializing and developing nations move from the countryside to the city in search of work. The major cities must continuously improve the standard of living that they offer if they are to meet the needs of their growing populations – from transportation infrastructure to hygiene, healthcare and education systems. "Countries like China, India, Brazil, Mexico, Russia and Saudi Arabia will invest around USD 6 billion in the period to 2030 in improving the living conditions in their major cities," says Bernd Brunke. "That means major growth opportunities for companies in a whole range of industries."
Particularly interesting are what we call the "Focus 20" countries: the four BRIC countries Brazil, Russia, India, China and 16 emerging and developing nations such as Argentina, Vietnam and Indonesia. These nations will be investing heavily in hospitals, transportation and education – which means enormous business potential for companies.
An expanding middle class
Emerging and developing nations are not just experiencing population growth, they are also seeing improvements in general prosperity levels. "The middle class is expanding in these regions. Their purchasing power and desire for a higher standard of living will act as an engine for growth, driving the global economy," says Brunke.
Roland Berger experts predict that around 80% of the middle class in 2030 – give or take four billion people – will be from countries outside Europe and North America. Indeed, this trend is already visible today. By the year 2020, some 117 million households around the world will enjoy an income of more than USD 35,000 a year. This new middle class is happy to spend more on consumer goods, education and healthcare. Thus, global demand for apparel is up 5% a year and by 2020 the market is expected to be worth EUR 800 billion. "Businesses must make sure that they don't miss the chance to be first on the market in these countries. With the right strategy, they can reap significant profits from this population trend," says Brunke.
For more information about our "Eight billion opportunities" series, see: www.rolandberger.com/GlobalTopics
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