News of slowing emerging market economies, weaker currencies and falling commodity prices, prompting withdrawals of foreign investment, has obscured a longer-term story – one of great optimism.
We commissioned an independent survey of emerging affluent consumers in seven important markets, ranging from more mature Singapore and Hong Kong to the still developing economies of China, India, Indonesia, Kenya and Nigeria. It showed that more than 7,000 consumers in these markets share aspirations such as owning property and educating their children.
Entrepreneurial spirit on the rise
Despite their significant differences, people are confident: 87 per cent of affluent consumers expected to achieve their personal wealth goals over the next 10 years. For people living the emerging markets story, belief in the future is largely undimmed and entrepreneurial spirit is notably on the rise.
On average, 75 per cent of respondents were confident about their country’s prospects for the next year. Almost two-thirds had benefited from rising incomes in the past year and seven in 10 expected incomes to rise in the next year.
“Our survey suggests increasing emphasis on starting a business, driven by liberalisation of rules, more international trade and regard for high-profile successful entrepreneurs”
The most confident affluent consumers in our survey were in India (95 per cent), where a more coherent government promises to strip away ancient barriers to business growth. One Indian respondent said: “This is a special moment for India. While many countries around the world are grappling for growth, India has been moving in the opposite direction.”
In many emerging economies, employment with the government or a large enterprise was long seen as the most reliable route to affluence. However, our survey suggests increasing emphasis on starting a business, driven by liberalisation of rules, more international trade and regard for high-profile successful entrepreneurs.
Entrepreneurs were more optimistic than employees. A heartening 95 per cent of the self-employed emerging affluent were confident about achieving wealth goals, compared with 84 per cent of employees.
This cohort of self-confident entrepreneurs is set to expand and become an increasingly important part of emerging markets’ growth story. An Indonesian respondent detected a cultural shift: “Previously, young people only wanted to become employees. Now it’s the opposite and all of them want to become entrepreneurs.”
In China, an affluent interviewee said the country’s economic development had created a springboard for business “by creating markets for goods, services and investment”.
“India, China and Indonesia alone could produce a lot of entrepreneurs”
On average, 69 per cent thought there were good prospects for launching a successful business. In India, the figure was 90 per cent, followed by China (80 per cent) and Nigeria (79 per cent). Our survey suggests that improved infrastructure, trade links and market liberalisation are encouraging affluent citizens to take greater risks in economies where opportunities abound for entrepreneurs.
With combined populations of almost 3 billion, India, China and Indonesia alone could produce a lot of entrepreneurs to become the next generation of global businesses. Aspiring entrepreneurs in emerging markets share a desire to benefit the wider community as well as to better themselves and their family.
Belief in a better life
Creating jobs and prosperity was an important element of people’s entrepreneurial zeal. In Nigeria, a respondent told us: “I want to start a business to create jobs in Nigeria and use the proceeds to give to charity.”
Our survey was conducted in June, before sharp falls in the Chinese stock market and commodity prices. Some respondents may have been too optimistic in the short term; however, long-term aspirations are less likely to be dampened.
The survey is a snapshot but it’s one that suggests belief in a better life in emerging markets remains intact.