When populations move from a lower class to the middle class, a domino effect happens. When people have more money, they start purchasing goods, services and experiences that were once only dreams.
Currently a population boom is happening in geographies such as Africa and India that also have fast-growing economies, says Vikram Mansharamani, lecturer at Harvard University and Yale University.
“The middle class of the world is about to explode,” says Mansharamani, also author of Boombustology: Spotting Financial Bubbles Before They Burst. “It will affect many different sectors, which could potentially provide demand shock the world needs.”
What will change? Mansharamani says when people have more money, they tend to eat more meat, drink more wine, engage in more education, travel more and buy more cars and smart phones.
“There will be a gigantic explosion in consumption,” Mansharamani says.
This will have direct outcomes to farming and agriculture. “A little more protein demand equals a lot more grain demand,” he says. “More middle class spending could be really good for anyone involved with the commodity markets.”
Mansharamani spoke at Bayer’s AgVocacy Forum, which is taking place this week in San Antonio, ahead of the 2017 Commodity Classic. He also shared these global economic tidbits.
- China consumes 60% concrete, 48% of copper, 54% of aluminum, 50% of nickel, 46% of steel, 23% of gold.
- Within an hour, Nigeria will add 540 people and India will add 1,800 people.
- The effects of climate change: Fundamentally a warmer planet equals lower yields—a 1-degree rise in temperature equals a 10% yield drop.
Watch a livestream of the 2017 AgVocacy Forum.