The Middle Class and Economic Development

As I have become more involved in the International Council for Small Business (ICSB) I have had the pleasure of getting to know entrepreneurship champions and educators from around the world.  With these acquaintances and my travels I have come to recognize how very important the middle class is to the standard and quality of living in various countries.  People do not always make the connection between the phase of economic development in which a country finds itself and the relative size of its middle class.

When people talk about the economic opportunities in the BRIC nations they are really talking about the untapped purchasing power of their populations.  China and India have the largest populations. But population size by itself is not the driver of opportunity and improved standards of living.  It is the development of higher value added goods and services that command a higher price which in turn allows the producers and providers to increase the wages of their workforce.  It is this “market pull” that allows for the movement into a middle class.  As the middle class grows as a proportion of the total population, the higher the overall standard living.

There have been books and massive studies done to try to find ways for creating that better quality of life and standard of living.  But let me offer one observation.  Entrepreneurship and entrepreneurial activity play an incredibly important role in helping societies advance.  The Global Entrepreneurship Monitor reports that there is actually more entrepreneurial activity less developed economies that are reliant on subsistence farming and natural resource extraction industries than there is in developed economies where innovation is considered the primary driver.  And the difference is significant with about 23 percent of the adult population involved in early stage entrepreneurial activity for the less-developed and underdeveloped economies compared with about 5.5 percent for the developed economies.  And while there is some variation from country to country, people seem more motivated by necessity in the less developed economies with little regard to the form of government or economic policies.

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Sao Paulo Brazil

Bom dia!

Another country to add to my list and one that I have wanted to visit for a long time.

When you arrive in another country you almost always see a sign that looks like this:

Sign to international arrival area at Sao Paulo airport

I think there is a universal experience that international travelers have – the walk for the airplane to customs is always long.  Maybe it is the fact that you have been on an airplane for a long time (in this case for 9.5 hours) but that walk through closed hallways (for control and security purposes) to customs seems to take forever.  And then you have to stand in line waiting to be checked through customs.  The wait really was not that long here in Sao Paulo but …

Sao Paulo itself is a bustling, modern city.  It  is the financial and economic center of Brazil.  It is a large city by any standards with about 20 million in population.  As you can see from the photo from my hotel, it looks like most other modern large cities.

Sao Paulo from the hotel

I admit to being comfortable and impressed with the city.  While the traffic can be as bad as New York or Washington DC, the roadways seem well constructed and laid out.  Public transportation is important for a city as large and densely populated as Sao Paulo.  In addition to major interstate-type highways, the city has public bus and subway service.

I am also impressed with the cleanliness of the city.  I admit that I have not gone walking through the poorer areas, but what you see from the streets leaves you with the impression that Sao Paulo is a clean city.

What really impresses me is the fact that there does not seem to be any serious air pollution.  For a city emerging from the “developing nation” status the lack of pollution surprises me.

And the people here are very courteous and pleasant.  The language is Portuguese.  And while I do not speak it, it was the language in my grandparents home.  As as result I picked up the knack of following conversations without really understanding the language itself.  So I do not find it difficult to understand or be understood which takes some of the stress out of being somewhere very different.

Ciaio for now.  More later.

Why Journeys with Dr A?

Over the years I have had the privilege to travel to all 50 states and visit over 30 other countries (see the blue pins on the header map!).  And each time I travel I learn something new or gain a better understanding of those around us.  These are lessons that help shape my thinking and how I see the world.  And I would like to share these observations and thoughts with our students and alumni at Wilkes University and anyone else who might be interested.

Tomorrow I head for Sao Paulo, Brazil.  It will be my first visit to Brazil.  I am second-generation Portuguese and my grandfather worked in Manaus, Brazil before immigrating to the US.  The purpose of the trip is to represent the International Council for Small Business (ICSB) at the annual Rede PYMES conference and give a presentation.  As one of the BRIC countries Brazil’s growth has been fueled by and helped to create a growing middle class, a critical phase of economic development  for improving a society’s standard of living.

The flight to Sao Paulo will be from Washington Dulles International Airport.  I probably could have gone out of Liberty Newark but I need to be in Washington DC for the SIFE World Cup on Monday.  So it just seemed easier to go from DC.

Beyond the connection with my heritage, Brazil has a great reputation for music, dance, food, and, of course, football (or soccer to us Americanos).  I am looking forward to the visit!

More on the trip!