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The rise of the consuming class

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The world economy has been changing dramatically in recent decades. Many see some of the changes as negative, with foreign competition increasing and jobs moving from our country to others. Host Mary Walden asks her husband, NC State economist Mike Walden, “Are there other changes ahead that may be more positive?”

Mike Walden: “Well, one change that many economists see is a large growth in the middle class in other countries around the world, particularly developing countries. And by middle-class we essentially mean that a household now has more than enough resources to meet their basic needs, and now they have resources that they can use in a discretionary way to buy things and services that really make them happier and increase their enjoyment of life. And it’s estimated that by the year 2025 there will be almost two billion more people worldwide who will be in the middle class and that they will generate an additional twenty trillion dollars of spending. Now what this means, for example, to companies here in the U.S. is that represents a big opportunity. That represents a big opportunity for sales of our products and our services. And so I think this is why when you talk to business people and especially when I talk to young entrepreneurs, they are very interested not only in developing their domestic markets but they know that the real growth markets are going to be internationally in the future.

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