Global Consumer Spending and A Rising Middle Class: Where Are We Going to?

by Aad Weening, Director International Consumer Trends IORMA
London, 1 February 2017

According to experts, global consumer expenditure is on the rise again. Growth can be estimated at 3% in real terms (around 4,2% in current prices), up from around 2,5% in 2015, largely on account of the economic recovery in key emerging markets.

Consumer spending is defined as what households buy to fulfill everyday needs. This private consumption includes (durable and non-durable) goods (between 30 and 40%) and services, like real estate and health care (between 60 and 70%).

Consumption is shifting toward services, reflecting two trends: heavy spending on health care among aging consumers in developed regions, and increasing spending by consumers in emerging economies as their incomes rise to thresholds where consumption of services such as communications, transport, restaurants, and catering. Read the full Article here.

I am very much looking forward to have your comments, which you can leave by clicking the button here on the righthand side. 

2017 – The Year Ahead

by Aad Weening, Director International Consumer Trends IORMA
London, 27 January 2017

As this is my first blog of this year 2017, my best wishes to our readers for the year ahead, both privately as in business. Nobody knows of course what the year ahead will bring us but it promises to be an interesting and challenging year, that’s for sure.

First of all: the inauguration of Donald Trump on 20 January last as the 45th president of the USA. As I got it, the basic message Mr Trump gave in his acceptance speech was: “America First”, indicating a more protectionist policy, which I think might have serious effects on both the global and the American economy. For instance, abandoning the Trans Atlantic Partnership will undoubtedly have its impact on global economic relations and might have serious effects on world trade. Levying heavy import duties on goods coming into the USA will in my view fail to have the intended outcome, but will result in higher prices for US consumers and consequently less spending power.  Read the full article. 

I will closely follow what happens in the next weeks and months and try to assess the consequences on the economy, businesses and consumers. I am looking forward to have your comments, which you can leave hereunder. 

President Obama in WIRED: How Technology Progress Will Make Our Lives Better

OBAMAWhen Barack Obama agreed to guest-edit the November issue of WIRED, he selected MIT Media Lab Director Joi Ito for an exchange of ideas about technology today and in the future, in particular artificial intelligence (AI). Their recent interview at the White House, moderated by Wired Editor-in-Chief Scott Dadich is featured in the latest online issue of WIRED, published on October 12 last. The president, whose term is nearing its end (his successor will be sworn in next January), has chosen a special platform to make him heard. The theme of the November issue is “Frontiers,” reflecting how technology is influencing many segments of life. Read more here.

Political circles often refer to the final months of a term as “harvest time”: the time when a politician reveals what he or she has achieved – or claims to have achieved.

Contrary to others Obama does not just provide an overview of his achievements but rather looks ahead and shares his views with us about technological progress and all the ethical and societal consequences involved. Read more here…

Start-ups: A Blessing for the Economy

Amongst experts there seems to be widespread consensus that a bad economy is a good startups II(financial) climate for a start-up. Indeed, in light of the on-going start-up boom which some are dubbing the ‘start-up economy’ this may well prove true.

A start-up can be defined as a newly formed company, the purpose of which is to develop new, usually innovative products or services in uncertain circumstances. If it satisfies a new need, locally but preferably in a broader up to a global area, it also has great growth potential. Startup entrepreneurship is crucial because of innovations, new jobs and bringing competitive dynamics into the business environment.

Research by the 2012 Global Entrepreneurship Monitor South Africa concluded that one third of dynamics of a country’s economic growth can be attributed to the dynamics of start-up entrepreneurship. They also contribute to the promotion of the research and innovation system and introduce values of proactivity into the society. Read the full article here.

South-East Asia: A Region to Reckon With

Southeast Asia is a region of Asia, which is getting more and more attention andSouth East Asia region rightly so. The Indian subcontinent bounds the region roughly on the west, China on the north, and the Pacific Ocean on the east.  Just look at the numbers: it has a population of around 620 million (the third largest in the world after China and India) and covers an area of 1.7 million sq m (4.5 million sq km).

The region is composed of eleven countries of impressive diversity in religion, culture and history: Brunei, Burma (Myanmar), Cambodia, East Timor (Timor-Leste), Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. It is today one of the most dynamic areas of the world economically, a factor which largely accounts for its growing international significance.

The establishment of the ASEAN Economic Community (AEC) in 2015 was a major milestone in the regional economic integration agenda in ASEAN, offering opportunities in the form of a huge market of US$2.4 trillion. In 2015, AEC was collectively the third largest economy in Asia and the seventh largest in the world. Read the full article here. 

China: Economy Is Slowing Down – Disposable Incomes on the rise – e-Commerce Continues to Rapidly Progress

China ButtonChina’s economy is expected to grow 6.3 per cent in 2016 and 6.0% in 2017, quite a contrast with the growth figures realised in recent years and primarily reflecting weaker investment growth as the economy continues to rebalance.

Although the economy is slowing down, the figures are still more than impressive: in comparison global GDP growth is expected at 3.4% in 2016 and 3.6% in 2017.

The following table shows the most important economic and demographic data over the past years, including a forecast for 2016. Read the full article here….