Beyond BRIC and The Clash 10.14.2010

The total middle class increased by 12b one in six

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The total middle class increased by 1.2B. One in six live on $2-$3 a day. May “misinterpret” the recession vis a vis historical  inward v outward geopolitics. Take Russia under Yeltsin, Brazil’s coups, China’s  cultural revolution.
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The new middle class contributes to a  country’s growth, efficiency & equity. Consumers = “Human capital”. They engage in a wider range of economic  activities than the rich and create more jobs  than the poor.   They also promote liberalization and  democratic movements. All are hurt by recession.
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Job loss - more than the poor, the middle  class are employed by companies that  depend on exports & assets and finance. Many teeter close to the poverty line. The rich have a buffer...even though their  investment portfolios are leaner.
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If the global recession lasts no more than a few years,  the engine of middle-class formation will pick up  again. There will be another portion of Maslow’s pyramid to  climb, another political regime to change, another step  toward middle-class hegemony to be taken. The most revolutionary part of the middle class will  again contribute to the advance of human affairs and  calibrate the engine of commerce. That’s YOUR opportunity to understand & leverage. 
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Critical Success Factor:  High education system Infosys = leading software entrepreneur  Bollywood = 1,000 films|3.6B audience Hollywood = 700 films|2.6B audience Narayan Hrudaylaya Hospital Kingfisher Beer Reliance on expatriates, 1M in the USA Rajat Gupta of McKinsey created the  Business School in Hyderabad. Cascade Communications $3.7B sale Draper International VC from Indian’s in Silicon Valley
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In 2006, Vice Premier Wu Yi took 200 Chinese  entrepreneurs with her.  Now, 60 Chinese  companies are traded on the NASDAQ. The Central Party School offers courses for  entrepreneurs, known as “Red Capitalists.” The Cultural Revolution stymied intellectual  and managerial capital.  While waning  compared to India, China has used Silicon  Valley expats to her advantage.  
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China’s most successful entrepreneurs produce  American knock-offs: Baidu is a Chinese Google Dangdang is a Chinese Amazon Taobao is a Chinese eBay Oak Pacific Interactive is a Chinese combination  of MySpace, YouTube, Facebook, Craigslits ChinaCars is a Chinese AAA.
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Indian government (just completed its election cycle) is  riddled with favoritism and a tedious, complex legal  process amid a tortured infrastructure and 1/3 of the  population is still illiterate. Chinese capitalism is distorted by political influence.  40%  of entrepreneurs are members of the Communist Party.
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