By Will Straw, Associate Director for Globalisation and Climate Change at the Institute for Public Policy Research
Analysis of globalisation in recent years has focused primarily on the ‘supply shock’ created by a huge increase in low-cost labour in China, India and other emerging markets. Citizens in the developed world view this as both positive, due to the falling cost of consumer goods, and negative, due to the perceived pressure on their jobs and wages.
But a new phase of globalisation is now under way due to the ‘demand shock’ caused by rising prosperity in middle-income countries. Over the coming years, millions of people in the BRIC countries – Brazil, Russia, India and China – and elsewhere will be lifted out of poverty and see their disposable income rise. This creates challenges in resource scarcity and the impact on climate change while bringing great opportunities as businesses compete to meet the new de
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