If the Brookings Institution study is correct, within 12 years we should see the Asian middle class triple from the size that it was in 2015. That means that the Asian middle class will outpunch the Europe and U.S. in consumer markets. Ultimately, this could translate into outpunching in the global currency and financial markets.
Please think about how big this is.
What does this mean to you? That depends on the particulars of your business, your employment, your skills, and where you live and all sorts of other issues related to culture and the specifics of your situation. One thing that you need to do in business, income, and employment is to anticipate brutal competition and the need for a high-technology learning metabolism.
The multinationals are coming home and will try to go deeper in their home markets. Asia and global companies are going to increase their efforts as well. All of them will apply new technologies such as AI and robotics to reengineer processes and lower expenses. They will invest in lining up lobbyists, politicians, and government officials to engineer regulation and enforcement to support their efforts.
You want to be riding this wave and finding appropriate opportunities to help you navigate an increasingly competitive environment.
You want to nurture Western civilization. If you want Western civilization to be present, you and I are going to have to nurture it. We are getting some help from some interesting sources. One of the things that Joseph has taught me is that the Chinese are reviving pipe organs by placing more new orders for pipe organs globally than anyone else.
Be prepared to nurture human civilization despite hypermaterialism and transhumanism. We need to be able to effectively ignore people doing things that are frightening to most—from human gene editing to integrating machines into human biology with elective surgery and other “performance enhancement” procedures. Be prepared to nurture Western civilization values in the face of both hypermaterialism and transhumanism promoted in the media.
When it comes to media, you want to make sure that you get a 360-degree view. I almost never watch American media, but I have to say that having spent the last month in Europe, it’s astonishing what a limited view you get in the United States. That is why I find books and travel much more useful than most Western news sources. The exception is the financial press because it covers the flow of economics.
Make sure that you are getting an Asian view. When I lived in Hong Kong when I was in college, I would get up and read the papers first thing in the morning. I loved it because everything was about the news from around the world. I had moved out of a world where the news was primarily about the United States.
You want to shift to the discipline of getting a 360-degree view. If our markets are static and others are tripling, we need to know what they are thinking.
Education is critical. I do not care whether it is foreign culture, foreign business, or foreign language curricula—we need to be committed to lifelong learning. We all need to be learning about the worlds and constituencies that are growing, what they are doing, and how they are progressing and innovating. If you look at the learning and innovation speeds in Asia, they are much faster than in most G7 nations. That’s cultural. That’s not because the government is making anyone do things.
Asians are inventing stuff while we are deeply and badly stuck. Where are our high-speed trains? (I believe they are underground. So, there is a lot of invention going on in certain segments of our society—and arguably we have substantial advantages in many areas—mostly in the covert world.) But when we compare the learning capabilities of the general populations, we are being left in the dust.
We need to increase our learning speeds. We need to make sure that our young people are getting the best nutrition and education. At all ages, we need to kick up our learning speed and learn from the example set by Asia.
I’ll never forget reading an interview of Obama. As you all know, I’m not a fan of Obama, but he had a great description in The Nation about why he wanted to pivot to Asia. He talked about all of the exciting things that were happening, and all of the things that they were doing. The future, he said, is there. Then he compared that to the Middle East where everybody is always fighting and bogged down and entangled in the negative. He was inspired by the vibrancy of Asia.
It’s impossible not to be inspired by the vibrancy. We need to take a deep indwelling of that vibrancy and be refreshed and renewed by it.
The entertainment businesses around the world are growing. You want to make sure that you access the best of the global offerings—particularly those that are not dumbing the audience down. When I travel, I get a lot more ideas about movies, books, and poetry. It’s quite amazing what even just the airline and hotel magazines teach you about the best of global offerings and entertainment.
One of the reasons why we have a movie section in this 2nd Quarter 2018 Wrap Up is to give you a taste of movies coming out of Asia that will help you understand what Asians are experiencing as these changes rock their world. We are far from the only people experiencing change!
Cyberwarfare is increasing. Digital systems are insecure, even as we grow more dependent on them. We need to be prepared for an Asia that is using cyberwarfare as a political and business tool, and governments and companies in the West that will make little effort to protect you from it. We are likely on our own and need to get better at protecting ourselves.
(Huge sums are being spent by U.S. intelligence agencies on cyberwarfare—both offensive and defensive capabilities. Arguably, the Asians and Russians are responding to our cyberattacks on them.)
Environmental health will be an ongoing issue. The pressure on the environment of billions more people coming into the middle class is enormous. It is one of the reasons why Asia will no longer be exporting deflation. Now Asia is exporting inflation. Now there are hundreds of millions of new consumers competing globally for resources and putting pressure on the environment. This means bigger inflation. You need to think long and hard about how you can protect all aspects of your life and assets from rises—even significant rises—in inflation.
You should travel. Get out there and learn. If you can’t travel, then you can watch documentaries and movies. There is a tsunami of new members of our morphogenic fields coming our way. You might as well get out there and meet them.
Consider that pensions and aging pose a serious challenge to humanity. If you look at the aging population, the financial coup means that the folks in the G7 don’t have what they planned on, and the folks in China and Asia who are aging may not have the younger generation to depend on. So, we have critical aging challenges in Asia and in the G7. It’s one of the reasons why the Asians won’t have a lot of sympathy for the Western elderly. Our situation is much better than theirs. We have much more in the way of pension fund assets as a social safety net. They are unlikely to have much sympathy for our complaints.
As I asked earlier, will English be the dominant language? I don’t know. I’m betting on English just because Mandarin is so difficult on a computer, but who knows? You may want to start learning Mandarin or encourage your children and grandchildren to do so.
You need to look for opportunities to diversify investment globally. For now, the United States and the Anglo-American markets continue to be dominant. However, if you look at the growth rates, it is unlikely to be that way forever. A lot of the ways that investors have dealt with this is to invest in companies in the G7 that have done a good job of investing and marketing within Asian markets. As the rise of the Asian consumer continues, be thinking about what that means to global investment. I dare say, French luxury brands should continue to do well.
If you’re in a large city in the United States, you can witness the extent to which Asian investment is flowing into real estate. This is all part of the move to the megacities—a theme I will be covering next quarter in the 3rd Quarter 2018 Wrap Up.
I keep hearing from people around the world— in San Francisco, Sydney, Toronto, Vancouver, Paris, Los Angeles, or New York—that real estate prices have topped out; they can’t possibly go up more. I’m not saying that there won’t be a consolidation. Certainly if trade wars break out, we could get a significant drop in all prices all around the world. At the same time, if you look at the rise of the Asian consumer and the amount of money coming out of Asia and buying real estate around the world, it’s conceivable that global real estate in the prime markets, particularly for wealthy people, has a lot more to go up over the long term. Keep that in mind because, again, 3.5 billion Asian middle-class consumers are not going to spend all of their money just in Asia; they are going to be coming to where you and I are as well.
Before I close, I want to make one more request. I want you to take some time over the next month—just an hour or two—and I want you to think about what it’s going to mean if the Asian middle class reaches 3.5 billion by 2030, 12 years from now. They were 1.4 billion in 2015. What is that growth going to do to your world?
I just want you to think about it. Go through all aspects of your life, and think about what it may mean to you and those you love. This is a very significant primary trend. How it impacts each one of us is going to be unique and different.
One thing is certain—it is going to be important to you.