NEW YORK (TheStreet) -- Cummins (CMI) and Apple (AAPL) are coming out with new products this year. Both companies are industry leaders, but Cummins is building heavy equipment and Apple is making palm-sized tech toys.
The bulk of global economic growth will be in emerging market nations such as China, India and Indonesia, whether that growth is in engines or iPhones.
Not only will most economic growth be in those countries, so will the increase in the size of the world's consumer class, according to reports from consulting firm McKinsey. The consumer class is projected to increase by one billion people. McKinsey defines a member of the consumer class as one who has $10 a day in purchasing power.
These consumers, the bulk of the world's consuming class, will have more of a need for a diesel engine than an iPhone or other smartphone.
The iPhone is surely useful, it was not introduced until June 2007. (Happy anniversary, iPhone.) But China, India and other emerging market nations were booming before then. According to the World Bank, China's gross domestic product grew at a 12.7% rate in 2006. For India, it was 9.3%. Indonesia's gross domestic product expanded by 5.5% that year.
Much of that can be attributed to the products and services from Cummins, Caterpillar, Navistar, and other heavy industry companies.
Cummins has 20 facilities in China. Caterpillar, the world's biggest heavy equipment maker, opened an office in Beijing in 1978 and now has 23 manufacturing operations in China. Navistar, the largest truck and school bus maker in North America, is shifting its focus to China.
By 2020, China will account for half of the truck sales in the world, according to estimates from the Boston Consulting Group.