America 2.0 Explained: The Millennial Generation
The nation’s 92 million tech-savvy millennials are fueling a Fourth Industrial Revolution — what Paul Mampilly calls America 2.0 — by embracing new technologies as well as lifestyle and consumer trends that are remaking the economy and the world today.
They spend billions of dollars on internet-based industries and new tech-based consumer products in key industries that are the main engines of the U.S. and global economy — housing, retail, health care, entertainment, media, transportation and more.
Collectively, millennials represent the largest generation in history and are just hitting their prime spending years — building careers, getting married, starting families, having children, settling down and buying homes and cars.
Who Are the Millennials?
In general, the millennial generation refers to anyone born between 1981 and 1996, according to the Pew Research Center and other authoritative sources.
Therefore, the oldest millennials turn 39 years old in 2020. The youngest turn 24.
The nation’s 92 million millennials represent the biggest generation in history — exceeding the number of people in every other living generation, including the silent generation, the baby boomers, Gen X and Gen Y.
Millennials are the first generation to grow up with smartphones, the internet and personal technology as central organizing forces in their lives. They were between the ages of 5 and 20 when the 9/11 terrorist attacks shocked the nation, and they grew up in the shadow of wars in Iraq and Afghanistan.
Most were in their teens and 20s during the recession and financial crisis of 2007 and the 2008 election — becoming a driving force for political and economic change, with the youth vote helping elect the nation’s first black president, Barack Obama. They represent the most racially and ethnically diverse adult generation in U.S. history.
Most millennials came of age, went to college and entered the workforce during the height of an economic recession. As a result, their lifestyle choices, career paths, future earnings and entrance to adulthood have been shaped by this recession in a way that may not be the case for their younger counterparts. The long-term effects of this slow start will be a factor in American society for decades.
Millennials are already driving many changes that shook traditional industries that once drove the U.S. economy — boosting online retail, digital news and information, on-demand digital video and music services, new transportation modes, high-tech manufacturing and housing.
But those changes are just the beginning.
The oldest of the millennials are just entering their prime spending years — getting married, starting families, buying homes, cars and related accessories — so their spending habits will continue to shake up many industries in the decades ahead.
How Are Millennials Driving America 2.0?
On average, millennials’ wages are rising and are already higher than prior generations for their age group.
In addition, millennials stand to gain a whopping $40 trillion in inheritances — by some estimates — from their baby boomer parents and grandparents in coming decades. That will add up to the biggest economic infusion in American history, economists say.
Millennials, who represent 28% of the U.S. population, spend $1.3 trillion on consumer goods each year. That figure is projected to rise as their yearly incomes increase to $8.3 trillion by 2025.
Just imagine what that means for how millennials will drive buying trends, tech developments and more over the next several years — and how that will create great investment opportunities.
Already, the billions of dollars millennials spend each year are reshaping businesses and remaking a host of industries that have moved from brick-and-mortar operations to online enterprises.
Among them are retail, fintech, entertainment, media, information, communications, housing, home goods and transportation.
It all up to what Mampilly describes as a Fourth Industrial Revolution that will remake the world we live in and the U.S. manufacturing sector — for the better.
What Are Some Examples of How Millennials Are Changing the Way We Live, Work and Play?
Millennials are already changing American life, lifestyles, the entertainment industry and many workplaces in significant ways:
- At work: Younger Americans are changing the way we work by embracing communications technologies that allow for more remote, online-based employment settings. Centralized brick-and-mortar offices are being replaced by shared workspaces, and communications software allows millennials to work from any place that has a Wi-Fi connection.
In addition, millennials are embracing a huge variety of e-commerce operations and choosing to do freelance or contract work more than any other generation.
More than any other generation, millennials want freelance careers instead of working full time. They place a higher priority on becoming their own bosses — with the goal of flexible hours — and are willing to go solo to make it happen.
About 74% of millennials say they’re interested in freelance or contract work. By comparison, 57% of workers say they’re interested in that kind of employment, up from 51% in 2017. By comparison, about 57% of Gen Xers and 43% of older baby boomers expressed an interest in contract or freelance work.
What’s more, 4 of every 10 millennials intend to leave their full-time employers to work as a freelancer in five years. Only 23% of Gen Xers and 13% of boomers had the same goal.
- At home: Millennials are the primary drivers of a new housing boom in the U.S. Right now, the oldest millennials are in their late 30s and beginning to settle down, get married, have kids and buy homes and cars.
Millennials represent the largest group of homebuyers in the country at 36%, for the last six years in a row, according to the National Association of Realtors.
And keep in mind, this is just the first wave. For nearly the next two decades, home demand will continue to be strong, as millions more millennials enter adulthood.
Of course, all those new buyers will need the things that make a house a home: furniture, carpeting, appliances and décor.
Altogether, the coming millennial home buying and furnishing wave will be a huge economic stimulus.
The overall home goods market is projected to grow over the next seven years. But while sales from brick-and-mortar retailers will rise a modest 10% between 2020 and 2027, online retail sales are projected to grow by a whopping 300% in the same amount of time.
Some traditional home goods operations — like Restoration Hardware, Pottery Barn and Bed Bath & Beyond — have attempted to adapt to the changing market, but struggle to sell millennials goods online when their largest competitor is Amazon.
But those feeble efforts are comparable to the booksellers and retailers that simply moved their operations online in the late 1990s without improving the consumer experience.
Companies that are web-based — such as Wayfair — are benefiting most from the millennial homebuying trend. Online services allow for not only purchases and sales, but also the use of virtual reality and other technologies to give buyers a chance to visualize how new home goods will look in their own homes and custom-design living spaces.
- At play: New technology is also at the heart of how millennials live at home in their every lives and lifestyles.
Streaming services such as Netflix, Amazon Prime, Hulu and Disney+ are replacing conventional television networks, cable TV and DVD rentals.
“All you can stream” music services such as Spotify, Apple Music and Pandora have remade the music industry and put a nail in the coffin of the conventional CD market.
Newspapers, magazines and even television news outlets are dying out, as online sources of news and information — such as Google, Twitter, YouTube and other social media — have risen to dominate the space.
Traditional banks and money services are losing out to digital dollar alternatives such as PayPal, Venmo and blockchain-based cryptocurrencies like bitcoin.
Healthier alternatives — in diet, exercise and active lifestyles — are also key for millennials. They exercise more, eat smarter and are smoking and drinking less than previous generations.
Sportswear companies such as Lululemon are capitalizing on this trend — creating a kind of healthy lifestyle chic in clothing design as an alternative to sweatpants and workout shorts. New fresh and plant-based food companies are giving a new meaning to the term “health food.”
For instance, Chipotle, Beyond Meat and Impossible Foods are just a few of the companies surpassing fast-food operations and soda companies for market share.
And even pot industry leaders such as Canada’s Canopy Growth are positioning themselves as “healthy lifestyle” alternatives to the traditional vice economy of tobacco and alcohol.
What Are the Global Market Projections for Millennial Markets?
Because of the wide-ranging impact of millennials on a range of industries, it is difficult to assess the total global market impact of the biggest generation in history.
The total market for products, goods and services that cater to millennials now reaches into the tens of trillions of dollars, and economists expect it will continue to rise as the generation continues to consolidate and build wealth as it moves through middle age and beyond.
If you look beyond the U.S., the sheer numbers are even more astonishing: Millennials account for nearly 1 of every 3 people on the planet. That’s roughly 2 billion people!
As a group, millennials earn the highest wages of any generation in the past half-century. A recent Pew Research Center report found households headed by millennials have a median income of $69,000 — more than young Americans at any time in the past 50 years.