Thursday, September 29, 2016

Income is growing faster than any time in history.

In many parts of the world today, money is continuing to set new speed records. No, these records can’t be measured in miles per hour, but rather in terms of Gross Domestic Product (GDP) in various areas of the globe. And, as time marches forward, the speed with which money is moving continues to increase.

As an example, in the past, it took approximately 150 years from the beginning of Britain's industrial revolution for Gross Domestic Product per person (measured as purchasing power) to double. Roughly 120 years later, in America, this was accomplished in roughly one-third the time. But even more recently, though, in China, it has doubled in only 12 years and with 100 times fewer people.

In addition to the rise in GDP, the average incomes in developing countries are also growing faster than they ever have in the past. While China and Asia are responsible for a great deal of this new wealth, South Korea, Mexico, and Nigeria are also following suit.

Around the world, there are millions of people who are moving quickly into the "middle class." This means more discretionary income is available and ready to be spent on goods and services. This speedy transition has, in turn, provided a golden opportunity for businesses - and investors - as consumers continue to spend.

"By increasing productivity and becoming more competitive, we will be able to offer better opportunities and improve the standard of living for all Mexicans." - Enrique Pena Nieto

Source: Urban World:Cities and the Rise of the Consuming Class, June 2012, McKinsey Global Institute