31 Oct The Next Economic Driver – Generation Y
Perspective can radically change what you achieve without changing anything in your existing environment.
When projecting construction trends and their resulting costs, I have long been a proponent of finding leading indicators that can provide the insight and perspective related development and construction.
Recently we hosted a meeting where Generation Y (Gen Y) engagement specialist Daniel Homrich provided some great insights and facts. The impact of the 60 million Baby Boomers and how they have shaped the US economy has been studied in detail by multiple experts (see past newsletters for additional details). Daniel shared that the Gen Y numbers 80 million strong and in 2018 their spending power is expected to outpace the Boomers.
Why is this important to construction?
The economic growth experienced in the 1980s and 1990s was driven by the buying preferences of the Baby Boomers. Individually, people act irrationally, however collectively their actions are predictable. Those collective trends became the economic leading indicators enabling all businesses to predict their markets.
Daniel’s prediction is that by 2018 the Gen Y economic impact will overtake the Boomers spending impact. If he is correct, the characteristics of the Gen Y population will become the driving economic force.
The Generation Y population is the first digital generation and their tendencies seem to differ from previous generations raising some questions about what to expect from the future’s largest consumer group:
- Will the Gen Y’s follow previous generations’ buying habits as they get married, start families and pursue their career?
- Current studies indicate that only 20% of Generation Y have a desire to own a home – will this desire change and how will this affect the housing industry?
- What affect will Gen Y have on the travel industry, gaming, resorts, theme parks and other large investment programs
- Indications are this generation has little desire for the corner office – their desire is a socialized work environment. How will this affect the design of future office building designs?
- The first Digital generation embraces wearable technology – how will this instant connectivity influence purchasing trends?
- What entrainment medium attracts their attention and how will businesses tap into this buying power?
As business leaders, we are confronted with the same challenges that our predecessors faced in the 1980’s when the Baby Boomers were about to drive the economic engine.
In the words of that great philosopher Yogi Berra, “It is deja vu all over again”.