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Centre of Gravity Of Wealth Shifts East Away From US Over Past 20 Years, New Report Shows

The world’s centre of gravity of wealth has shifted east away from the United States in the last 20 years, reflecting the rapid wealth creation and rising affluence seen in emerging markets, particularly in Asia, according to a Wealth-X report released today.

As fortunes in North America shrank during the global financial crisis of the late 2000s, the centre of gravity of wealth began moving off the coast of New York to the coast off Tunisia at around 10 times its historic speed, The Last Decade Of Wealth: A Review Of The Past 10 Years In Wealth and Luxury noted.

By 2010, the centre of gravity was in the western Mediterranean. It continued to move eastwards, and slightly southerly, reflecting the continued rise of wealth in South East Asia – and increasingly in South America and Africa.

Today, the centre of gravity of wealth is in the central Mediterranean, between the toe of Italy and coast of Tunisia.

Here are other key-findings from the report:

  • The world’s wealthy, and the luxury sector, have trebled in size over the past 20 years. Much of the growth took place in the past 10 years.
  • The world’s wealthy are spread equally across North America, Europe and Asia (approximately 30-35% per region).
  • The United States has more than six million individuals with a net worth in excess of US$1 million, 69,000 of whom are ultra high net worth (UHNW) individuals (defined as those with net assets of US$30 million and above).
  • Wealth creation has flourished, fuelled by the (1) the rise of emerging economies; (2) increased entrepreneurship and business ownership; (3) technology and globalisation (4) and the democratisation and modernisation of wealth and power away from inheritance and “old money”.
  • The past decade has seen a high net worth (HNW) wealth growth trend of over 7% per year. The trend also applies to the world’s UHNW population, who now account for 0.004% of the world’s adult population, and whose wealth has grown at 6.6% per year from 1992 to 2012.

Marc Cohen, Wealth-X’s Regional Managing Director for Europe and the report’s lead author said:

“This study reveals how the recentering of economic gravity has acclerated since 1990, particularly during the last 10 years when the pace increased over 900%. The reason is the urbanisation in developing countries and the explosive growth of the middle class and its impact on wealth creation, particulary in China and India. We expect this wealth cycle to last several generations and displace the center further east.”

The report is the first instalment in a two-part Decades of Wealth series. The next instalment, which looks at the next 10 years in wealth and luxury, will be released at the end of June.