Where will wealth go in the coming decades?

McKinsey & Company, a global corporate consultant, is worrying that corporations in wealthy nations are going find it hard to compete with companies in emerging countries. McKinsey’s discussion of this issue makes fascinating reading for two reasons:

• It offers insights into the thinking of the people who control the corporate giants that exercise massive influence over our lives. As a result,
• It provides a fascinating glimpse into our own futures.

McKinsey’s reasonable premise is that there will be a massive increase in the size of the world’s middle class as countries like China and India emerge from poverty. The question the company poses is: Will corporations in wealthy countries succeed in capturing a substantial share of the money this new middle class spends?

The document I linked you to (above) is a summary of McKinsey’s advice to wealthy-country corporations on how to compete with companies in emerging countries. If you read the advice, it’s not hard to get the sub-text: The competition is going to be tough, and business people in emerging countries, who understand the market and the attitudes of local consumers, and who know how to deal with local  politicians and bureaucracies, will have the edge.

So why should we care about which plutocrat wins? Whether we worry about social justice, about the environment, or about saving our own skins, the issue at stake is how much of the wealth, and the jobs, of the next generation will end up in places like New York, Toronto or Hamburg, and how much in São Paulo, Mumbai, or Beijing.

McKinsey’s discussion offers fascinating insights into how wealth is accumulated, and thought-provoking portents about where accumulation will take place. It’s backed up by links to documents that offer more detail.