- Mauro Guillén is an expert on global market trends and professor at the Wharton School, where he holds the Zandman Professorship in International Management and teaches executives, MBAs, and undergraduates.
- The following is an excerpt from his new book, “2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything.”
- In it, Guillén predicts that by 2030 AD, the world as we know it will change dramatically — grandparents will outnumber grandchildren, more global wealth will be owned by women, and more robots will exist than workers.
- He dispels common assumptions about millennials, healthcare spending, and politics, further challenging our predisposed notions of generational differences.
- Visit Business Insider’s homepage for more stories.
Today, the world’s 2.3 billion millennials — those born between 1980 and 2000 — are the focus of the world’s attention. Their minds, wallets, and votes — companies and politicians want them all. According to Morgan Stanley, millennials are currently “the most important age range for economic activity,” because they’ll start families, have babies, and spend money to settle down in life.
This is a misconception.
For starters, millennials are no different from previous generations in their heterogeneity. People in this age range come in many different shapes and sizes.
Some are highly educated; others are not. Some are rich; others struggle to make ends meet. Some are consumer narcissists; others abhor commercialism. The media loves to generalize their attitudes or behavior, often in sensationalist ways:
“Millennials are killing the dinner date.”
“Millennials have officially ruined brunch.”
“Millennials are killing the beer industry with their rosé obsession.”
“Millennials are killing the napkin industry.”
“Millennials are killing the movie business.”
“Will millennials kill home ownership?”
“Why aren’t millennials having sex?”
But there’s another, far more fundamental reason that the fuss around millennials is overblown.
Contrary to conventional wisdom, millennials are not the fastest-growing market segment in the world. In fact, the fastest-growing segment, by age, may surprise you. They’ve often been neglected by companies, but they are courted by politicians (because they are more likely to vote), and they happen to own at least half of the net worth globally — around 80% in the United States.
They’re the population above the age of 60, and by 2030 the world will have 400 million more of them, mostly in Europe, North America, and China. In the United States, this age group includes both the baby boomers and the Silent Generation (those who grew up during the Depression and either lived through or fought during World War II; Tom Brokaw called them the “Greatest Generation”). The American historian Neil Howe, writing in Forbes, notes that “the relative affluence of today’s elderly is historically unprecedented.” Howe knows a thing or two about the topic: He coined the term “millennial.”
Federal Reserve data indicate that members of “the Silent [Generation] hold roughly 1.3 times the amount of wealth as Boomers, more than twice that of [Gen] Xers, and 23 times that of Millennials.”
According to Howe, “Marketers are attracted to [Boomers’] newfound spending power and are pouring ad dol- lars into drawing older consumers in their 60s and 70s.” The industry’s magazine of record, Advertising Age, “even spotlighted a string of campaigns featuring octogenarians from global brands like Nike and Poland Spring.”
And it’s a myth that healthcare costs associated with the senior population in the United States are soaring. In fact, most of the increase in healthcare spending since 2002 has occurred in the population between 18 and 64 years of age.
How to think about generations
We’re at an unprecedented juncture in history: Several generations of relatively similar size are sharing the stage and competing for influence. Generations matter because they behave in specific ways related both to when they came of age and to their situation at the current moment.
“The creation of a world view is the work of a generation rather than of an individual,” wrote novelist John Dos Passos. “But we each of us, for better or for worse, add our brick to the edifice.”
These days, companies face a two-tiered issue: They are puzzled by millennial consumer behavior and uncertain of how to approach an older generation living and spending longer than any other to date (the notion of a comfortable retirement beginning at 65, a familiar benchmark, may no longer be as relevant).
To further complicate the issue, is there any common ground between these generational groups?
“Boomer bashing is in fashion,” wrote Linda Bernstein in a 2016 article in Forbes. Many young people are angry with baby boomers, blaming them for everything from the financial crisis and climate change to an unpredictable economy.
There’s also a rift politically.
While, on average, young people tend to be more progressive, they see among their parents and grandparents widespread support for populist politicians, new forms of nationalism, and walls to keep out the unwanted.
Furthermore, the 2008 financial crisis made people question the old idea that each successive generation was poised to do better financially than their parents. But the finger-pointing goes both ways, as generations exchange accusations of self-dealing and narcissism.
What’s fundamentally new about these intergenerational dynamics is that as 2030 approaches, conventional definitions of “young” and “old” will become obsolete. We can no longer assume that dynamism is a synonym for youth and decline is associated exclusively with old age.
New technological developments will completely transform how we deal with retirement and geriatric care.
Pause for a moment to visualize a world in which our parents and grandparents are among the most active and productive people on the planet. Imagine millennials, raised in a high-tech world, starting businesses consciously intended to benefit a population over 60.
Consider the possibility of a world where age is less of a factor in hiring — where a 70-year-old new hire, for example, might not be unusual. How will the spending power of this over-60 group, which is estimated to reach $15 trillion a year, materialize?
Is gray the new black?
The German sociologist Karl Mannheim was the first to point out the importance of generations. Writing a century ago, he defined generations as groups of people united by time and space who behave in unique ways that last over their entire life span, forming a kind of collective meaning attached to certain experiences: the Depression, World War II, the civil rights movement, the Internet, or social media, for example. This is different from an “age cohort,” which simply denotes being born within an arbitrary time period, like a decade, with no unifying trait ascribed to it.
Members of a particular generation develop a shared consciousness, despite differences in, say, socioeconomic status or cultural values. Mannheim referred to such subgroups as a “generational unit.” For instance, consider the differences within the American “Civil Rights Generation” in terms of their views about society, their proximate relationship to the cause, and their level of political engagement.
But there’s another side to generations that was first conceptualized in the 1970s by French anthropologist and sociologist Pierre Bourdieu. Rather than identifying a historical event, Bourdieu focused on “predispositions.” In his view, each generation develops “natural and reasonable practices or aspirations which another [generation] finds unthinkable or scandalous.”
In other words, an element of acquired routine (what he called “habitus”) and socialization sets each generation apart.
This element of identity is essential to understanding the impact of generations on the economy, especially in terms of savings and consumption.
Consider the implications of different generations vying to advance their own economic and political agendas. Then consider that within each of these generations are diverse subsets with their own preoccupations and needs.
Let’s also ponder how aging within a specific generation impacts attitudes or behavior over time. Whatever their differences at birth, do people in a generation converge on a set of values as they get older?
From 2030: How Today’s Biggest Trends Will Collide and Reshape The Future of Everything by Mauro F. Guillen. Copyright © 2020 by the author and reprinted with permission of St. Martin’s Press.
Mauro F. Guillén is one of the most original thinkers at the Wharton School, where he holds the Zandman Professorship in International Management and teaches in its flagship Advanced Management Program and many other courses for executives, MBAs, and undergraduates. An expert on global market trends, he is a sought-after speaker and consultant.