THE age of austerity shows no signs of waning. The International Monetary Fund reckons that the rich world’s economies will together grow by a paltry 1.3% this year, down from 1.6% in 2011. Britain’s government now says its fiscal squeeze will last until 2018. America’s is preparing to introduce tax rises and spending cuts. The euro zone’s situation is so dire that four countries (Cyprus, Greece, Poland and Portugal) have decided they cannot afford to take part in next year’s Eurovision Song Contest.This slow-growth environment is confronting the West with all sorts of unwelcome questions. How can businesses prosper when their customers are feeling the pinch? How can governments look after the needy when their budgets are being squeezed? And how can ordinary people make ends meet when the economy is stagnating? Four answers stand out from the rubble of broken business models and failing government policies.The first is to look to emerging markets for inspiration. Multinationals are applying to rich countries the lessons learned from reaching customers in poor ones. Unilever has enjoyed success selling consumer goods in small portions to Indians whose grocery...
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