Global Cultural Diversity: The Key Market Drivers

The recent Strategy Briefing, Cultural Diversity and its Impact on Global Consumer Markets, looks at the wealth of new opportunities open to marketers and the shift from traditional ethnic marketing to “marketing in a multicultural world”.  These are key market drivers behind the trend:

The key factors affecting the ethnic and cultural mix of populations include people moving more between countries for purposes of work, leisure or study; migration and asylum; and generally higher birth rates among ethnic communities.

Migration

• From an economic point of view, migrants contribute to the prosperity of their host countries, helping fill employment gaps when necessary and rejuvenating ageing populations and workforces.
• Migration is also contributing strongly to the growth of urbanisation and to overall population growth in markets where birth rates are stagnant.
• The US had the highest number of foreign citizens among developed markets, at over 22 million in 2013. Most of the growth in people of ethnic backgrounds has come from higher birth rates among naturalised or second-generation Hispanics.
• Asian communities are growing strongly in countries such as the US, Australia and Canada. Asians recently surpassed Hispanics as the largest wave of new immigrants to the US, with increased border enforcement suppressing illegal immigration via Mexico.
• Other developed markets with substantial foreign populations include Australia (8 million foreign-born citizens), and Germany (8 million foreign residents).
  
• Australia has become the most diverse nation in the world, with foreign-born people accounting for 31% of its total population and a net migration rate of 9.8 per 1,000 population in 2013.

Key national economic migration trends

• Immigration flows in Europe have continued apace. In Italy, the number of foreign citizens rocketed by 51% between 2008 and 2013. Italy was once a country of mass emigration but it is now Europe’s first port of call for economic migrants sailing over the Mediterranean from Africa.
• Other key markets in which foreign populations grew strongly over the review period include the UK (24%) and Canada (11%). The Syrian crisis brought thousands of refugees to Turkey, causing its foreign population to soar by 131% over the review period.
• Switzerland is a very popular destination for emigrés, due to its wealth, employment opportunities and high wages. However, its strict laws place barriers on naturalisation and in 2013, as much as 23% of its population was foreign.
• The proportion of foreign citizens residing in Japan and South Korea is still very low, at less than 2% of their populations. This may change in the coming years, as Japan, faced with low birth rates and an ageing population, looks to bring in high-skilled workers from overseas.
• Spain witnessed a spectacular decline in immigration over the review period, as its unemployment rate skyrocketed after the recession hit in 2008. In 2013 alone, over half a million people left Spain, causing net migration to fall to -152,000.

Reasons behind migration

• For many economic migrants, the main reason for travelling abroad for work is to be able to send money home to their families. Developing countries like India, Pakistan and the Philippines have long experienced a “brain drain” of skilled workers to richer countries.
• According to the United Nations High Commissioner for Refugees (UNHCR), there were some 17.9 million refugees/asylum seekers fleeing persecution, conflict, violence or human rights violations in 2013.
  
• An increasing number of young people are choosing to study or work abroad – especially in English-speaking countries. China sends the largest number of overseas students, while the US is the largest host nation for international students.

Socio-demographic profile of migrants

• Migrants tend to be younger than the general population and have larger families. They tend to cluster in large cities, although second and third generation migrants seem to be shifting towards suburbs and semi-rural locations.
• Poverty rates among migrants are declining in some countries, and studies show that minority groups are more economically empowered than ever before, as they become more highly educated. This is contributing to their greater purchasing power.
• In the US, Asian-Americans are the highest income and best educated racial group in the country, with 61% of those who have come from Asia in recent years having at least a bachelor’s degree.
• Higher levels of education among African-American consumers has led to increases in household income, with 44% of all African-American households now earning US$50,000 or more, and 23% earning above US$75,000.
• In the UK, the average British Indian man is now reported to be on a higher income than his white counterpart, and research shows that the spending power of the black and minority ethnic (BME) community shot up from just £32 million in 2001 to £300 billion in 2011.
• In Germany, Turkish consumers are estimated to spend some €2.3 billion on consumer goods annually, but the more recent wave of immigrants from Poland are now the best educated minority in Germany. Two thirds of Polish immigrants have secondary or higher education.

Religious diversity

• As a result of continuous immigration into developed markets, and higher birth rates among existing minorities, religious diversity is growing. In particular, there has been a significant rise in the number of Muslims throughout Europe, North America and Australasia.
• According to the website islamicpopulation.com, Europe (including Russia) is now home to around 51 million Muslims, while a further 7 million live in North America.
• France has Western Europe’s largest Muslim population, equal to over 7% of the total population, while over 5% of the populations is Muslim in Austria, Germany, Greece, Netherlands and Switzerland.
• There were estimated to be some 13.9 million Jews in the world in 2013, equal to just 0.2% of the global population. Many countries have a small Jewish population, but as much as 82% of the Jewish community is concentrated in Israel and the US.