By Bambang Simarno, Head, Retail Banking
Standard Chartered Bank Indonesia
Can someone achieve a better life for themselves than their parents enjoyed? Whether they do is a question of social mobility, a key issue in countries around the world. Here there is a contrast between East and West – while social mobility is slowing in the West, across our markets in Asia, Africa and the Middle East the people we have identified as the “emerging affluent” are enjoying upward social mobility.
Their wealth and social status have moved upwards beyond that of their parents and our latest study provides new insights into this level of social mobility as well as the ambitions the emerging affluent have in life. We surveyed 11,000 emerging affluent consumers and found that 59% are enjoying social mobility. In Indonesia, more than half ( 54% ) of emerging affluent consumers are experiencing upward social mobility
Imagine Aziz, he’s 25 years old, married and has a baby girl. He works on his family’s chicken farm. He earns about IDR 35M per month. Aziz is well-prepared financially, no matter what happens in his life. He saves 5% of his monthly income for his daughter’s future education and a similar amount to fund his family’s business. His goal is to expand the business and launch a supermarket that sells a wide range of farm products across Indonesia. He feels like he’s in a better position financially than his parents were when he was growing up – in his words “the sky’s the limit in terms of reaching my life goals.”
And there are people like Aziz across the 11 markets we surveyed (China, Hong Kong, India, Indonesia, Kenya, Malaysia, Nigeria, Pakistan, Singapore, South Korea and the UAE).
Our Indonesian respondents surveyed for this study said, across education, employment and housing, the emerging affluent are scaling the social ladder and fueling their expanding economies by outstripping their parents’ succes
* 83% went to university, compared to 55% of their fathers and 46% of their mother
* 94% of the socially mobile own their home, compared to 82% of their parents at the same age
* 71% of the socially mobile are in management positions or running their own business, compared to 60% of their fathers and 38% of their mothers at the same age
We also identified a smaller group ( 4% of the total ) who we found are enjoying supercharged social mobility, ascending further and faster than their peers with dramatic increases in income, education and career success.
Looking to the future, the emerging affluent aspire to build on their success and continue to improve their lives and those of their children. As a group they are confident about their futures and believe that smart financial choices will improve their social status – nearly four in five of the emerging affluent said that managing their finances effectively holds the key to greater social mobility. And across all markets paying for children’s education was ranked as the most important savings priority.
While the emerging affluent are hungry to improve their financial position, a missed opportunity across all markets is a lack of professional guidance – 42% said that they felt held back in their aspirations by their lack of financial knowledge.
An important thing we found in our study was the importance of digital which makes financial products more visible and accessible, allowing users to make more informed decisions quickly and easily: 78% of the emerging affluent in Indonesia said familiarity with digital tools has been vital to their personal success.
We believe the economic power of the emerging affluent represents a significant driver of economic prosperity in some of the world’s most dynamic countries. Their ambition and dynamism are helping to create jobs and wealth across Asia, Africa and the Middle East.