HP Innovation Journal Issue 12: Summer 2019 | Page 30
In 2020, half of the world’s middle and upper classes will
be Asian. 1 The ascendance of Asia on the global economic
stage is undeniable, returning the region to a stature and
influence it has not held for centuries. (For more informa-
tion, see sidebar, “Asia’s GDP History: Back to the Future.”)
Where the 19th century economy arguably “belonged” to
Europe and the 20th to the U.S., Asia is poised to be the
global economy’s dominant force in the 21st century.
As a method for analyzing and comparing income growth
globally, one measure HP researchers use is the broad seg-
mentation described as “haves” and “have nots.” According
to Gallup, “haves” include households meeting a minimum
annual income threshold of $35K Purchase Power Parity
(PPP). Worldwide, across all regions and countries, the
number of “haves” has been growing and is projected to
continue to rise through 2035.
Asia’s growth is forecast to be larger
than the rest of the world’s, with
almost 600 million new “haves”
households in this period. That’s like
six new markets the current size of
the U.S. The “haves” growth forecast
in Asia is led by China, India, and
Indonesia. In Indonesia, for example,
an additional 4 out of 10 house-
holds are expected to move into the
“haves” category by 2035. 2
The growth of the “haves” population in Asia highlights
the potential market opportunity (i.e., TAM growth)
forecast to play there. Here are the 2010-2035 forecasts
by region 3 :
NORTH AMERICA +34% OR 66M HOUSEHOLDS
LATIN AMERICA +21% OR 39M HOUSEHOLDS
EUROPE +8% OR 67M HOUSEHOLDS
MIDDLE EAST /
AFRICA +18% OR 78M HOUSEHOLDS
APJ +42% OR 585M HOUSEHOLDS
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HP Innovation Journal Issue 12
CHINA: THE LION’S SHARE OF GROWTH TO DATE
As noted earlier, a significant portion of Asia’s gains come
from China. In the past four decades, China has lifted
800 million people out of poverty—an historic achieve-
ment. It’s generally easier for poor countries to show
dramatic improvement numbers, and this has been true
for China by virtue of its population size and the number
of people living in poverty. Still, among countries con-
sidered “emerging,” China is clearly outpacing its peers.
In the next decade, China will increasingly start look-
ing like a developed nation, with the highest number of
middle-class households and the second highest number
of affluent households in the world. China’s growth is
forecast to account for 44% of all Asia’s household income