Changing Consumer Patterns
A Growing Middle Class
Despite the slowing global growth, the world is set to add approximately 2 billion people to the middle class by 2030.Their growing aspirations will shape and create new demands for global connectivity. Brookings forecasts a faster expansion of the middle class in the next decade than any other time in history. By 2020, the majority of the world’s population will have middle-class or rich lifestyles for the first time ever. Most of the new entrants to global middle class will be from Asia, with China and India accounting for the majority of the share. Asian countries are expected to lead the geographical distributional shifts of markets eastward.
Figure 1. Growth of Middle Class through 2030
|Source: Kharas 2017.|
The new middle class will also change consumption patterns towards higher-value, internationally sourced manufactured goods (International Transport Forum 2017, 73). The most dynamic segment of the global middle-class market is found at the lower end of the scale. Since the current per capita spending and per capita consumption level in middle- and low-income countries is comparatively low, we can expect a volume boost on the demand side as the people from these countries grow, urbanize, and get richer (Hallward-Driemeier and Nayyar 2017, 78).
Figure 2. Spending by the Global Middle Class, 2015 to 2030
Source: Kharas 2017. Graph adapted by GICA from Table 3 on page 15.
A Mobile Society
We already live in an era of unprecedented human mobility, with international migration as well as travel reaching record levels (Dugarova and Gülasan 2017). People aspire to move easily from place to place, travel, and relocate as needed, and have quick and easy access to a range of goods and services. With the trend toward increased physical movement of people and goods, the transport system will need to either evolve or scale in order to handle higher volumes of people and goods more quickly and more efficiently. The middle class will expect better service delivery, safety, and comfort. Transport demand will also become more diversified with Asia and Africa taking much larger shares in the sector than they do today.
Figure 3. Volumes of Passenger and Freight Transport, 2015 to 2030
Source: OECD / ITF 2017.
Thanks to the rapidly expanding digital connectivity, the global economy is increasingly underpinned by more digital flows and transactions among people and businesses. Examples include e-commerce, which allows consumers to order goods online, and telecommuting, which enables employees to work away from traditional offices (Sustainable Mobility for All 2017, 14). Growing share and importance of virtual transactions presents a new imperative for countries to scale and support increasingly robust digital connectivity as well as a paradigm shift in the way infrastructure need is planned. See Megatrend 4 for more.
An Aging Society
Whereas middle- and low-income countries are expected to experience a surge in middle class consumption, 16.5 percent of the world’s population will be aged 60 or older in 2030. By 2050, for the first time in human history, there will be more over-65s than children under 15. The aging of the population is likely to have significant effects on mobility, particularly due to a reduction in daily mobility that is generally associated with partial or full retirement. Additionally, the effects of aging—such as reduced vision and delayed reaction, which also have safety implications—are likely to affect the number of trips taken by car, thus offering an opportunity for public transport and shared mobility modes to fill the gap. This demographic trend—led by OECD countries and joined by transition economies—calls for new mobility solutions that are responsive, age-appropriate, and affordable (Sustainable Mobility for All 2017, 14).
Dugarova, Esuna and Nergis Gülasan. 2017. Global Trends: Challenges and Opportunities in the Implementation of the Sustainable Development Goals. Geneva: UNDP and UNRISD.
Hallward-Driemeier, Mary and Gaurav Nayyar. 2017. Trouble in the Making?: The Future of Manufacturing. Washington, D.C.: World Bank.
Kharas, Homi. 2017. "The Unprecedented Expansion of the Global Middle Class: An Update." Global Economy & Development Working Paper 100, Brookings Institution, Washington, D.C. https://www.brookings.edu/wp-content/uploads/2017/02/global_20170228_global-middle-class.pdf.
OECD / International Transport Forum. 2017. "ITF Transport Outlook 2017." Paris: OECD.
Sustainable Mobility for All. 2017. Global Mobility Report 2017: Tracking Sector Performance. Washington, D.C.: Sustainable Mobility for All.