Corporations see a high-income world even though it is mainly middle-income

OpenStax is another high-quality open-source economics textbook provider and they produced a graph comparing the distribution of global income versus the distribution of global population. Hans Rosling found that most people incorrectly think that most of the world is poor, but actually most of the world is now middle income as the following OpenStax graph shows.

Figure 32.2 Percent of Global GDP and Percent of Population The pie charts show the GDP (from 2011) for countries categorized into low, middle, or high income. Low-income are those earning less than $1,025 (less than 1% of global income). They represent 18.8% of the world population. Middle-income countries are those with per capita income of $1,025–$12,475 (31.7% of global income). They represent 69.4% of world population. High-income countries have 67.5% of global income and 11.8% of the world’s population. (Source: World Bank)

However, contrary to Pralahad’s “Bottom of the Pyramid” theory, for-profit companies care about money, not people and there is too little money at the bottom of the pyramid of human income to be worth much attention from private firms.  The poor countries altogether have less than 1% of total global income, so for-profit companies care about them less than 1% as much as they care about everyone else. About 68% of the attention of for-profit companies will go towards the 12% of people living in high income countries.

Posted in Development, Globalization & International

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