Asian economies: The rise of the Chinese and Indian economies has the potential to threaten "middle class society" in the same way as working class communities have been damaged by the demise of traditional industry, a leading management thinker said yesterday.

Charles Leadbetter, who has advised British prime minister Tony Blair, said the pace of "institutional reform" in the Republic of Ireland should be accelerated in order to meet the rising challenge from newer, cheaper economies.

The rapid growth and technological advancement of the biggest Asian economies raised the prospect of well-paid jobs that once were the preserve of Europeans and the West shifting to low-cost economies, he said.

"If you think what's happened to working class communities through the destruction of the industries and occupations upon which they were founded, that could happen to middle class society," he said at the Irish Management Institute conference.

Citing "techno-nationalism" in Korea and China and the combination of science and patriotism in India, he said the rapid rise in scientific investment in those countries put them in a position to compete as equals in the global market and lead the development of technology.

Research and development grew 20 per cent in China in the past five years, to the extent that it now amounted to some 1.8 per cent of gross domestic product, he said.

While the 1.15 million workers in China engaged in research and development represented only a small portion of its total workforce, the absolute number of Chinese workers in such activities was three times the size of Germany's.

Citing similar figures for South Korea and India, Mr Leadbetter said the barriers to entry in science and technology were falling as leading multinationals dispersed their most advanced technological development across diverse markets.

One-third of the billion people in India were below the age of 25, he said. Leaving aside the poverty faced by most people in India, he said it was possible that India's middle class could grow by 300 million in the next decade.

Such people would be "prime consumers" of new products and the cost structures of their economies meant they could in the future be provided with everyday products at much cheaper prices.

However, Mr Leadbetter said the success of the Asian economies was not a given.

The scale of developments was large compared to Europe but not large in the local context.