What does the future hold for Generation Alpha?

The characteristics and impact of Generation Alphas – those being born now – was the topic of the first in a series of ‘Vibrant Economy Breakfasts’ co-hosted by Cranfield School of Management and Grant Thornton. As the audience heard, this generation promises to have a significant impact on brands, employers and on society in general.

Establishing a definition of Generation Alpha

Generation Alpha describes those born between 2010 and 2025. Named by Australian demographer Mark McCrindle, this is the first generation that will be born entirely in the 21st century; the children of Millennials, many of these people will still be alive into the 22nd century. Generation Alpha people will face demographic challenges and solutions that will be utterly unique to them.

This was the backdrop to Grant Thornton’s recent Vibrant Economy breakfast briefing, featuring Cranfield School of Management’s Professor of Global Economy Joe Nellis.

By 2025, there will be two billion ‘Alphas’, who are expected to be the most formally educated, wealthiest generation in history – and better supplied with technology than any previous generation.

It’s no coincidence that the start of Generation Alpha’s era is marked by the launch of the iPad and Instagram. It was also the year that Facebook overtook Google as the most popular website in the United States, a stage of maturity that few thought ‘faddish’ social media would gain. And this is emblematic of the connected world that Generation Alpha will have lived in for its entire life.

The big differences in Generation Alpha’s world

The future these people will create will be built on the changes that we are experiencing today. To understand what we, as a society and as an economy, can do to prepare, we need to take a step back.

Generation Alpha are born to older parents, and will be more likely to be in single-child households and smaller family units. Globally, this generation will experience greater wealth and more material goods than previous generations.

With birthrates currently higher among ethnic minorities it’s likely that, in the West at least, Generation Alpha will be a more culturally diverse one. Their parents believe that being a good parent and having a successful marriage is more important than having a high-paying career; and in the aftermath of the last great recession, their parents will experience a more fluid, changeable career path.

Bearing the weight of previous generations

The population around Generation Alphas is ageing, meaning that they will ultimately be responsible for supporting a larger number of people in society as a whole, through healthcare, social care and pensions. By mid-2039 more than one in 12 of the UK population is projected to be aged 80 or over; just as Generation Alphas are reaching their greatest earning potential.

These demographic features could all have been predicted 20 years ago. The most unexpected aspect of Generation Alpha’s world is the ubiquity of multimedia devices. These people will have been raised in front of screens, and will have digital connections around them for their entire lives. Half of all UK children have access to up to 10 multimedia devices, and nearly 12% of boys have access to 20 or more.

> Robert Hannah explains how to prepare your organisation for Generation Alpha

The challenges Generation Alpha will face

The result of these changes means that Generation Alpha people will be more specialised and less rooted. They’re more likely to end up with a postgraduate qualification, preparing themselves for a career that starts with a greater debt burden, paid off over a longer working life as longevity, and retirement ages, increase. As Joe Nellis points out, they will be expected to move jobs more frequently, often on freelance contracts, as the commoditisation of labour increases and robots begin to take over more production.

“One of my concerns is: if robots are taking over production, who owns the robots? And what happens then to the gap between the rich and the poor?” he asks.

“They are already talking in Scandinavia about the universal basic income. Could I envisage that being implemented here in the UK? I could, although it would be a long way off.”

High employee expectations

Their self-reliance and independence will make them more demanding employees. As specialists, who fully expect to develop and learn new skills throughout their working lives, they will know their own worth and be ready to use leverage to get what they want. If employers want more fluid, on-demand workforces, they will have to be ready to service their needs in return.

How can we prepare for Generation Alpha?

Clearly, both society and the economy will need to prepare. In many ways, the changes we’re anticipating are a logical progression: the controversies over zero-hours contracts, the legal status of ‘gig economy’ workers, and the campaign for Internet freedoms are all indicators of the challenges ahead. The protection of Generation Alpha workers and consumers will be focused on their rights as individuals; they will expect the state to watch over their rights as much as they will expect them to safeguard the privacy of their data.

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Catering for demanding customers

Businesses will need to change to keep pace with Generation Alpha, who as consumers will expect even faster results, a greater array of choices and more immediate customisation. Personalised products and services will offer them something authentically individual, placing the person before the brand, in order to sustain loyalty. Mass-produced, off-the-shelf, disposable – these ephemeral qualities will leave Generation Alpha consumers cold.

Generation Alpha will be raised on a planet in constant environmental crisis, and it could live to see the global population rise to its peak of around 11.2 billion by 2100. Brands will need to respect the environment that these people inherit, and do so convincingly: social media and other digital networks will leave nowhere to hide.

“With Generation Alpha, trust means everything,” says Nellis. “Trust in friendships, family, business, government. It’s being challenged right now by the current generations, but I think every single company, from the biggest to the smallest will be challenged more and more, by customers, the media, all of us.

“Immense value will be placed on trust. The danger is that you can lose that in one second. It’s only going to become more important as we all become more connected. This could be a revolution in the way companies behave.”

Engaging and retaining autonomous and mobile employees

As employers, businesses have to earn loyalty by revealing a sense of purpose. The profit motive alone will no longer attract Generation Alphas: environment, provenance, supply chains and ethics will need to be debated, confirmed and shared with the world. In a world where contracting and freelancing in specialist areas will be ubiquitous – in the USA last year, freelancers made up one-third of workers – the workforce will use its autonomy to influence these outcomes. The compensation they will expect for their flexible terms of employment will be in the form of better legal protections such as equality and diversity law and even more flexible work patterns.

Educating a generation of specialists

Their flexible approach to work will be apparent in their education. Already we are seeing institutions held to account in ‘value for money’ terms, and this transactional outlook will give them leverage. In the face of greater automation, machine learning and artificial intelligence, they will by nature become specialists, each drawn to a niche, with very specific educational needs to serve.

Their focus on specialism will lead them to new discoveries that benefit everyone, because they will have an unprecedented ability to make the complex simple, says Nellis. “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.’

“Increasingly, the solutions will embrace complexity and make it seem simple. For example, I admire immensely Amazon at the moment. They make several layers of complexity seem simple. They’ve revolutionised retail to the extent that we can now ask: do we even need shops? Look at Uber, or Airbnb. These are solutions that make the complex very simple, and they become normal. This is going to be the feature of Generation Alpha; they will make complexity seem simple.”

Education will be a product as well as service; customised, personalised, offering depth over breadth. As Grant Thornton’s Higher Education in 2050 report suggests, there will be greater use of online streaming and digital resources. What we may be surprised by is the more overt commercial overlaps with corporate sponsors, keen to tap into talent before graduation day. Indeed, ‘graduation’ as a single event in your calendar may be meaningless as lifelong learning becomes essential.

What can we start doing for Generation Alpha today?

These predictions are based on current measurable trends of today. Generation Alpha, though born to a fast-moving and rapidly developing world, is still in our world. So what can we do as a society and economy to deliver on their expectations? There are some fundamental steps to consider:

  • Workers’ rights. To begin with, we have to uphold equal rights and workers’ rights legislation, and expand them to meet the needs of the freelance economy. Without implementing rights that respect the way Generation Alpha works, we cannot expect their respect in return.
  • A new digital contract. Alongside this legislation, we should settle the thorny subject of freedom of information in the digital age. New protections and new freedoms must find a way to co-exist in a way that drives the economy, in the same way that patents did in the last century.
  • The transformation of education. Finally, we must pursue a reform of education that reflects the 21st century and its needs. This should be based on value for money and return on investment for the customer, above all.

Generation Alpha, born into a crowded, clever, connected world, will be better equipped than any other generation to tackle the problems we cannot solve today. Brands, employers and educators must prepare the ground for them with flexibility and fairness.