By 2025, it is estimated that Millennials (those born from 1982-2003) will make up 75% of the American workforce. This generation’s distinctive culture and approach to life is already beginning to make a sharp imprint on our economy and society, and has provided much fodder for journalist musings over the past few years (see here, here and here for a few examples). The emergence of Millennials into the adulthood over the past decade has meant that their strongly-held values are changing the workplace, consumer trends and economic priorities, bringing values such as accessibility, flexibility and sustainability to the economic forefront.
In May, Brookings published a new report providing commentary on how Millennials are expected to change the economy in the coming decades. While we hesitate to embrace blanket statements about entire generations (there has already been plenty of pushback on the assertion that all Millennials are environmentalists), there are certain trends and priorities held by this upcoming generation that will challenge the status quo of industries and the economy built by previous generations. The Brookings report highlights several Millennial value trends expected to impact the structure of the US economy in the coming decades:
- Belief that daily work should be a reflection of and part of larger societal concerns.
- Emphasis on corporate social responsibility, ethical causes, and stronger brand loyalty for companies offering solutions to specific social problems.
- A greater reverence for the environment, even in the absence of major environmental disaster.
- Higher worth placed on experiences over acquisition of material things, including a shift away from consumerism.
- Distrust of large corporations and the concentration of wealth in a few big companies.
- Ability to build communities around shared interests rather than geographical proximity, bridging otherwise disparate groups.
While not all directly related to sustainability, a quick look at these emerging values shows significant potential for embedding sustainability into the economy in the next few decades. The Millennial generation, in general, puts a higher value on the societal significance of their work and the products that they consume, motivated less by money and more by the social impacts of their work. According to the survey, almost two-thirds of Millennials would rather make $40,000 in a job they love than $100,000 in a job they think is boring. Eighty-nine percent of Millennials surveyed reported their stronger likelihood to buy from companies that support solutions to specific social issues, up 23 percentage points from when the survey was first run in 1993 when no Millennials were in the adult population. Increased brand loyalty to companies that have corporate social responsibility programs is also an encouraging finding. This, combined with a greater reverence for the environment, means that Millennials will be more likely to seek out sustainable solutions in their consumer choices and their business efforts than previous generations.
An inherent distrust of large corporations and the concentration of wealth, and community-building as a priority, may also result in new Millennial consumers and workers preferring to support and be a part of smaller organizations with deep connections to the communities that they serve. Often times these smaller companies make local-based sustainability a priority in order to protect the communities that they are connected with. Companies that promote flexibility and connectedness through technology are also more likely than larger traditional companies to gain the attention (and the dollars) of Millennials
What do all of these changes mean to companies trying to flourish in a Millennial-dominated economy? A particularly interesting application of the findings of the Brookings report is with regard to the impact that Millennials will have on utility companies, a good representation of a traditional industry that may find it difficult to adapt to the Millennial value system. Significant attention has been paid specifically to the electricity sector over the past several years as ageing utilities attempt to evolve in the face of challenges in energy availability, climate change, and increased demand.
A major driver of changes that Millennials will bring to the electricity sector is their desire for flexibility, personalization and sharing. Utility companies, notorious for inflexible, one-size-fits-all pricing and policies, will likely struggle to address this changing trend in consumerism. Millennials want efficiency, but they also don’t want to pay for more than they want or need. Brookings predicts that this will increasingly drive electricity companies to consider services like bundling with other utilities to provide unique products and services and lower costs. Combined with a heightened awareness of energy use and environmental impacts among Millennials, providing consumers with flexibility will likely lead to smarter and more efficient energy use.
As energy-efficient and convenient smart homes become a reality, companies that bundle electricity with home energy management systems will further allow Millennial consumers to use technology to gain a personalized energy experience. Personalizing energy data may also attract Millennials who want to connect their energy use with smartphones and other technologies to monitor costs and also promote energy savings. Becoming a part of the energy grid by installing renewable energy systems and selling back excess energy to the grid is a growing trend, and utilities that actively capitalize on that desire will capture the Millennial market share in the coming years.
While not all Millennial values are good harbingers for sustainability (an obsession with the newest technology, for example, means a growing electronic waste problem), the values of this generation will without a doubt have an impact on the sustainable outlook of the world’s economy and business priorities in the coming years. In the end, Millennials want businesses to do more to innovate, drive value (in more ways that just profits), and key into society in worthwhile way. Smart companies will begin to pay attention to publications like this Brookings report and act to incorporate sustainable, personalized, and flexible business practices so that Millennials can hit the ground running.
Image Credit: Richard King via Wikimedia Commons.