I'm in Rome this week at the Orange Business Live conference -- an event packed full of CIOs and technology decision-makers from across the world.
Professor Stéphane Garelli of IMD Business School and the University of Lausanne delivered one of the opening keynotes, describing the future of the world economy. One of the key points he made related to consumers in emerging economies creating "needs" from what were previously "wants."
"In China, everybody is buying a fridge. How many times have you bought a fridge? Once you have one then it lasts a long time before you replace it. You are living in a replacement economy where you are just upgrading what you already have. In China, you have no fridge, you want one. You have no TV set, you want one. You have no telephone, you want one..." he said.
The idea that enormous tranches of humanity are about to start consuming items they have never used before -- such as cars, washing machines, fridges, and air conditioning -- is a scary thought for environmental campaigners. Economic growth benefits those who are lifted from poverty, but how can the world really cope with billions of new drivers all expecting their own car?
Professor Garelli said:
"The problem for the environment is that the infrastructure is not following [consumption]. For example in China, in 2020 they will buy 30 million cars and only 15 million will be sold in the USA. So everybody wants a car, but there are not enough roads for all of them. You need growth, you need traffic control, etc. -- the infrastructure has to grow in parallel."
Professor Garelli went on to explain: "This means there is an enormous environmental impact and I think that this growth has to be checked. At a certain stage they will have to slow down some access. There are some countries where people can perhaps wait for a car -- can you imagine if every single person in Mumbai has a car?"
Indeed. Super cities the size of Mumbai or São Paulo contain in the region of 20 million residents and both have enormous traffic problems with just a minority of residents having access to personal vehicles. If everyone has a car, then it will not be possible to contain the effect just by building new roads -- some form of sophisticated access control will be required, far in excess of clunky methods such as the São Paulo rodizio.