- July 1, 2019
While Generation Z is celebrating the completion of their high school and college careers, another generation is positioning itself for a take-over. Believe it or not, a major director of current economic trends is still in diapers! That’s the prevailing view of economists whose eyes are fixed on Generation Alpha, the up and coming generation born between 2010 and 2025. That’s right, some of them haven’t even been born yet!
So why are economists so interested in Gen Alpha? The term, coined by Mark McCrindle, a social researcher in Australia, includes more than 2 billion people to be born worldwide by 2025, outnumbering both Generation X and Millennials. Couple this with the theory that "Generation Alpha will be the most formally educated generation ever, the most technology-supplied generation ever, and globally the wealthiest generation ever,” this is a recipe for major disruption on multiple levels. Here are just of few of them:
- Companies will adapt to appeal to a younger and more ‘tech-able’ generation. We’re looking at a generation born during the age of the iPad and Augmented Reality (AR). Their entire landscape is entrenched in technology and this is the only world they’ve ever known. According to The Independent, a quarter of the world’s children under the age of six already have their own smartphones and in some parts of the world, even pay a mobile plan. In order to keep up with Gen Alpha or the iGeneration, companies are already structuring their business models and beefing up their tech capabilities. UNICEF, for example, has recently invested in blockchain and AI technology and is looking for other innovative ways to connect with the youngest generation. Now is as good a time as any to prepare to take advantage of this shift perhaps with the help of an Investment Manager.
- Automation will lead to more diverse job opportunities for Gen Alpha. While Millennials may be worried about the estimated 73 million jobs worldwide that will be lost to automation before the end of the next decade, Gen Alpha may have less to be concerned about. Researchers believe the age of automation will allow machines to take over mundane and ‘boring’ jobs allowing Gen Alpha to explore “new emotionally-charged, irrational thought positions that machines simply don’t have the capacity to do.” This could equate to a potential 133 million jobs created as a result of automation and AI, jobs that Gen Alpha will be poised to fill.
- Formal education will shift towards creativity and irrational thought. Blame this impact on automation that will encourage the development of “soft skills’ in our thriving breed of Alphas. This means traditional instructional settings will change drastically in favor of more creative and ‘hands-on’ models. We’re already seeing this change in schools like the Waldorf School of the Peninsula, near Silicon Valley. Becoming increasingly popular, Google, Apple, and eBay employees are paying a hefty US$40,000 per year to have their offspring “using chalk and a blackboard, making go-karts and cooking rather than interactive smart screens” in a tech-free environment. While this may seem like a step backward from the Millennial perspective, Gen Alphas will be groomed to ‘think outside the box’, be better at human interaction and to be creative with and even in spite of technology. Of course, this may also mean higher education costs as the focus shifts from traditional education into grooming specialists in various fields. Unfortunately, forecasters believe a more highly educated workforce will also create higher student debt. Gen Alpha parents can mitigate this effect by strategically savings towards their children’s’ education by investing in an Education Investment Account.
- Employers can expect a more demanding workforce. In comparison to their Millennial parents, Gen Alphas are characterized by self-reliance and independence which will make them more demanding employees. This cohort will place a great deal of emphasis on value, which includes the value they get from their employers. Gen Alphas are expected to be specialists in various fields and to develop and learn new skills throughout their working lives. As such, they will be aware of their worth and be ready to leverage this to get what they want. This means that employers will have to become more flexible in their negotiation processes and provide greater benefits for this group. This benefit is not one-sided though. As a generation of specialists, Gen Alpha is expected to make new discoveries that will simplify complex business practices. Cranfield School of Management’s Professor of Global Economy Joe Nellis cites this unprecedented ability by Gen Alphas to make the complex simple. “The world today is more complex than ever before, where complexity is a function of speed, connectivity, global challenges and technology in general. Previous generations would find that impossible. For people in the next generation, they will look at this flood and say: ‘I love it. This is my world. I see a solution to this’”.
If there were any doubt as to Gen Alphas future impact on the world, one would only need to look at families’ purchasing decisions. A Hotwire survey revealed that out of 8,000 millennial parents worldwide with children between the ages 4 and 9, 65% said their children influenced their last purchase – 81% in the US alone. It’s no wonder why economists have a keen yet on them.
Sources
https://digiday.com/marketing/forget-millennials-gen-alpha/
https://www.grantthornton.co.uk/insights/what-does-the-future-hold-for-generation-alpha/
https://www.thetimes.co.uk/article/silicon-valley-s-tech-free-school-is-a-hit-znqclhmg6
https://150sec.com/generation-alpha-four-predictions-on-the-children-of-millennials/11226/
https://adage.com/article/cmo-strategy/move-gen-z-generation-alpha-watch/316314