Excerpt from the Future of Retail
Why is the middle class so important?
In a capitalistic system, it plays a pivotal role as an economic engine, as well as the fulcrum of social and economic stability. When the middle class shrinks or weakens, one can empirically observe the emergence of populism politics and social tensions, which nurture and fuel on each other.
From an economic point of view, large and modern economies have sustained their growth through a combination of Local Consumption and Export Driven Manufacturing. The middle class is vital on both sides of this economic equation. By the same token, there is empirical evidence – in developing economies – that
the middle-class is a by-product of economic growth: the more the economy develops, the more the middle-class grows in size.