When it comes to its population of millionaires, the U.S. still leads the world, but other countries have gained recently, The Boston Consulting Group reported Tuesday. The BCG’s eleventh annual global wealth report, titled Shaping a New Tomorrow: How to Capitalize on the Momentum of Change. says that “Propelled by growth in nearly every region, global wealth continued a solid recovery in 2010, increasing by 8.0 percent, or $9 trillion, to a record of $121.8 trillion.”
The improvement in global stock markets accounted for a great deal of the gain. “The United States had by far the most millionaire households (5.2 million), followed by Japan, China, the United Kingdom, and Germany,” the survey pointed out.
One of the major story lines in this report is the stagnation of wealth growth in developed nations, which contrasts to rapid growth elsewhere. Wealth in Europe grew by 4.8% from 2009, and in Japan wealth fell 0.2% to $16.8 trillion. Meanwhile, in the Asia-Pacific — which excludes Japan — the wealth growth rate was 17.1%.
The other significant finding of the survey is that the rich have continued to get richer. “Millionaire households represented just 0.9 percent of all households but owned 39 percent of global wealth, up from 37 percent in 2009. The number of millionaire households increased by 12.2 percent in 2010 to about 12.5 million,” the Boston Consulting survey found.
The key results of the report raise two critical questions. The first is what the slowdown in wealth creation in the world’s older economies in contrast to the rapid growth in developing nations means. Millionaires can be seen a proxy for the larger consumer bases in regions like Asia. China’s middle class has risen sharply as its manufacturing base has grown, and the People’s Republic has emerged as a major consumer market. That rise is likely to continue, along with the growth and concentration of wealth there.
The situation in Europe is the flip side of the wealth creation coin. The sharp slowdown in European GDP growth and consumer spending has probably eroded wealth and is a symptom of the region’s broader economic problems. The upshot of these two trends: Global businesses will have to move their marketing focuses more and more to developing Asia and less to Europe.
The final issue the report raises is the widening divide between the world’s wealthy and those with limited access to capital. This matter is becoming particularly acute as worldwide inflation sets in, thanks in large measure to high commodities prices. The costs of food and shelter have skyrocketed for many people in comparison to their incomes. While there is no case to be made that wealth redistribution will be forced by national tax policies or social upheaval, this level of tension between rich and poor probably cannot remain the status quo indefinitely.
Despite the downsides and dichotomies, the report offers one clear positive: The ranks of the wealthy have begun to grow at a rapid rate, a sign that the effects of the worldwide recession are easing.