Generation Z:

What future for the next generation?

Trajectory Trends Breakfast

July 2016

What future for Generation Z?

Why Generation Z?

Baby Boomers

Gen X

Gen Y

Gen Z

Gen ?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

% of UK population in each generational grouping; 2015 - 2030

2016

By 2029, Gen Z will be the largest generational cohort

Source: Office of National Statistics, 2014 based National Population Projections

Low Hanging Fruit2016 UK Demographic Composition

Pre-War: 11%

Baby Boomers: 22%

Generation X: 20%

Generation Y: 20%

Generation Z: 19%Source: Sonica Singh, Sapient Nitro; 2013

Why define generations?

“In rare cases, downturns are catastrophically deep and enduring, as were the Great Depression of the 1930s and Japan’s lost decade. Such downturns shape the mind-set of whole cohorts of consumers and have a long-term impact on buying behaviour.”

Generation Defining Events

Generation Z: The Stereotypes“I call them Generation K, after Katniss Everdeen, the determined heroine of the Hunger Games. Like Katniss, they feel the world they inhabit is one of perpetual struggle – dystopian, unequal and harsh.”

- Noreena Hertz, The Guardian

[I]t’s not money that drives teens today –only 2% see finances as the most important element in life. They’ve learned from the mistakes of their parents’ generation. New values sit higher on the teen agenda and happiness is at the centre”

- Coca Cola

Health

A Generation Willing to Pay

Source: Nielsen Global Health and Wellness Report; 2015

Smoking in decline

Source: HSCIC - Smoking, drinking and drug use among young people in England in 2014

49%

55%

21%

16%

0%

10%

20%

30%

40%

50%

60%

Units consumed on heaviest night in previous week;Men and Women, 16-24

Men - None

Women - None

Men - More than 8

Women - Morethan 6

Drinking also in decline

Source: Health Survey for England, 2015

Gen Z enter

Gen Z Minds

Source: Safer Internet Centre ‘Creating a Better Internet for All’ report 2016

Mental Health Less and Less Stigmatised

0%

5%

10%

15%

20%

25%

30%

35%

1994 1995 1996 1997 2000 2003 2007 2008 2009 2010 2011Feb

2011Dec

2012 2013

Fear and exclusion of people with mental illness, 1994-2013(% of respondents who agree)

"Anyone with a history ofmental problems shouldbe excluded from takingpublic office"

Locating mental healthfacilities in a residentialarea downgrades theneighbourhood

The Changing Meaning of Gender

The Changing Meaning of Gender

0

100

200

300

400

500

600

700

800

900

1000

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

UK Under 18s referred to Gender Identity Development Service; 2009-2016 (2015-16 data only for April-December) 17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

Source: The Tavistock and Portman NHS Foundation Trust; 2016

Digital Consumption

Generation Z-oella

Gaming & eSports

$194 Million

$325 Million

$463 Million

$1,072 Million

$0

$200

$400

$600

$800

$1,000

$1,200

2014 2015 2016 2019

eSports Revenue Growth; ($ millions)

Education

Accessing Education

Source: Simon Crowther, Facebook

Source: Student Com/Campus Life, 2016

78%

81%

87%

92%

70% 80% 90% 100%

Worry about how much university will cost

Think university is worth the cost in the future

Think university enables themto become more independent

Think university is important to get a good job inthe future

University Sentiments;800 15-18 Year Olds

The End of the Degree as Proxy?

Challenges

Fairness Between Generations

The 2015 Intergenerational

Fairness Index annual report reveals a 10% deterioration in the

prospects of younger generations relative to

older generations between 2010 and 2015.

Gen Z – still Generation Rent?

2001

7.2 million (25% of the UK population) will be renting privately

5.4 million households renting privately

2.3 million households renting privately

2014

2025

The Future of Intergenerational Conflict?

29%

46%

60%

64%

71%

54%

40%

36%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

18-24

25-49

50-64

65+

Leave Remain

Source: YouGov

Implications

Changing meaning of place

Changing meaning of ageLimited social mobility

The end of conventional demographics?

Final Thoughts

• Potential to be the catalyst for big changes

• In some ways opposites of gen Y

• In many ways extreme versions of gen Y

• However, clearly different from Y-ers in the way they perceive and react to the world

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