“They’re the hottest commodity on the job market since Rosie the Riveter. They’re sociable, optimistic, talented, well-educated, collaborative, open-minded, influential, and achievement-oriented. They’ve always felt sought after, needed, indispensable. They are arriving in the workplace with higher expectations than any generation before them—and they’re so well connected that, if an employer doesn’t match those expectations, they can tell thousands of their cohorts with one click of the mouse. They’re the Millennial Generation.”
- Claire Raines, From her website – generationsatwork.com
Demographics are a popular topic at Research Edge. Our Healthcare Sector Head, and all around boy genius, Tom Tobin does a lot of our demographic work. Demographics is a topic that we will writing more and more on heading in 2010, and we will be developing core investment themes around these powerful trends. In this note, I’m framing up one of the most important demographic groups domestically, the Millennials. It is a demographic group characterized by an acceleration of live births, so is large, and one that will have an increasing impact on society and investable trends in the coming decades.
The Millennials are typically defined as those born between 1980 and 2000. This demographic cohort goes by many names in addition to the Millennials, which include: the echo boom, generation y, boomlet, nexters, the Trophy Kids, the Nintendo generation, and the Internet Generation. From a purely demographic perspective, the echo boom is actually defined as the five year span between 1989 and 1993 when, for the first time since 1964, the number of live births in the United States reached over four million. Additionally, it took until 1985 for the live birth number to match that of 1965 at 3.76 million.
Understanding this group is important for a number of reasons. First, many of us are parents or aunts or uncles of this group. Second, many of us own or are invested in business in which this a burgeoning client base, and a growing client base (retail, mobility, consumer products, etc). Finally, as the baby boomers gradually retire and the Millennials come of age, this will be the dominant labor pool from which we will be hiring and/or working with.
To understand Generation Y mindsets, we need to consider the time in which they were born, generally the 1980s and 1990s. Gen Y came of age during an unprecedented time of economic growth in the late 1990s. Technology was rapidly growing driven by the dot com era (and bubble). The environment in which they grew up expected more of them than in the environment in which Generation X-ers grew up, and thus how they interact with society is dramatically different from Gen X-ers.
Regardless of what we call them, and incidentally the Millennials is a name they themselves voted on based on an ABC Peter Jennings poll, this is a demographic group due to their size and characteristics that is going to have increasing impact on business and society. Ironically, while the Millennials are sometimes refered to as generation Y, since they follow Generation X chronologically, they have characteristics that are much more in common with the Baby Boomers. Specifically, this group tends to be more family oriented (studies have shown that when in college they contact their parents almost two times a day) and have more respect for conventional social norms. Specifically, this group has less teen pregnancies than Gen X, less use of heavy drugs, and more civic involvement.
From an international perspective, this echo boom, while prevalent in the United States, is actually not present in European and some Asian countries, specifically Japan. This is obviously a much longer term investment theme that we will highlight in future posts. That is, the differing aging trends of work forces globally will potentially create dramatic economic differences from country to country. To quote a recent study:
“In many rich countries, the 1980s and 1990s were a period of rapidly falling birth rates. In Southern Europe and Japan, and less markedly in Northern and Eastern Europe, Generation Y is dramatically smaller than any of its predecessors, and its childhood years tended to be marked by small families, both immediate and extended, small classes at school and school closures.”
A few key characteristics of Generation Y that are unique versus Generation X include:
- Technology Savvy – A 2007 survey of over 7,000 college students indicated that they are incredibly connected and adept at technology. According to the survey, 97% owned a computer, 94% owned a cell phone, and 56% owned a MP3 player.
- Always Connected – According to the same survey, 76% of students used Instant Messaging, were logged on 35 hours per week and chatted an average of 80 minutes per day. Almost 15% of IM users were logged on 24 hours / 7 days a week. The vast majority also reported doing something else while IMing, including games and schoolwork as examples.
- New Information Sources – In addition, 40% of students reported that the television was their primary source of obtaining news while 34% reported that websites were their primary source (newspapers were the primary source for 11% and radio for 8%). In addition, 28% reported owning a blog and 44% reported reading blogs. Also, 70% of students reported having a Facebook account and logging on at least twice a day
- Scheduled Lives - The Millennials are also the busiest generation of children we’ve ever seen in the U.S, growing up facing time pressures traditionally reserved for adults. Parents and teachers micromanaged their schedules, planning things out for them, leaving very little unstructured free time.
- Multicultural Experiences - Kids growing up in the 90s and 00s with more daily interaction with other ethnicities and cultures than ever before. The most recent data from UCLA’s Higher Education Research Institute shows that interracial interaction among college freshmen has reached a record high. In addition, being “amongst the first generations to be born and actively grow up in an American society desegregated by law (Brown v. Board of Education), imposing sexual equality by law (Title IX), and proactively defending the rights of various minority groups by law, in addition to the effects of '60s and '70s era influence on their generation, Millennials have been conditioned by the state, educational institutions, and by cultural influence to take a supportive outlook on multiculturalism.”
- Terrorism Exposure - During their most formative years, Millennials witnessed the bombing of the federal building in Oklahoma City. They watched as two Columbine High School students killed and wounded their classmates, and as school shootings became somewhat of a trend. The catalyzing event for their generation was of course, the terrorist attacks on September 11, 2001.
The emerging and powerful Millennials, will shape investable trends and important decision making for years to come. Especially as certain classes of workers continue to age. As Claire Raines also noted on her website:
“The average age for a nurse is 47. That means she—or he—will be moving on before long. Half of all certified school teachers plan to retire within five years. Sixty percent of all Federal workers are Baby Boomers who say they’re on the edge of retirement. There’s no getting around it. We’re going to need those Millennials.”
Daryl G. Jones