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Millennials: A Giant Generational Hoax?

Dr Ross Honeywill is executive director of the Centre for Social Economics and an internationally published author. Source: Roy Morgan Single Source database (n=256,124).

Millennials fever is infecting the corridors of power as managers and marketers struggle to understand Australia’s largest generation.

Social analysts call them impatient, overly self-confident, self-absorbed, self-important, lazy, easily bored, spoilt, constantly in need of positive affirmation, and disloyal.[1]

Entrepreneurs see them as tech-savvy, early adopters: perfect fodder for digital disruption.

Marketers see them as ambitious, urban dwelling, highly educated, big-spending consumers of technology products and high-end experiences.

But are the stereotypes accurate? Or is it all a myth, a giant generational hoax?

Born between the early 1980s and the turn of the millennium, and also known as Gen Y or the Digital Generation, there are 4.9 million Millennials in Australia. The nearest generation by size is Gen X at 4.8 million followed by Baby Boomers at 4.1 million.[2]

 According to the Roy Morgan Single Source database, 38 percent of Millennials are in the ‘Big Spender’ category (top third of discretionary spenders in the economy), and 24 percent are in the AB socioeconomic quintile. Compared to the general population these numbers look OK. For example, 33 percent of Australians are big spenders and 20 percent are ABs. So the Millennials look reasonable, but not great.

 The myth really gets busted when we recognise that there are two fundamentally different mindsets in the Millennial generation. So different, in fact, that they constitute two entirely different economies – the Desire Economy and the traditional economy.

The Desire Economy is the cool current in an overheated, overhyped ocean of product marketing, where basic needs are satisfied automatically and expeditiously. This is where 1.5 million Millennials seek the path less travelled; signposted with authenticity, human scale, high-touch and digital disruption. This is where Millennials look like, well, Millennials.

However, over in the traditional economy there are even more Millennials, and they look nothing like the stereotype. The following table sheds some light:

 Only 8 percent of Millennials in the traditional economy are early adopters of technology, compared to 52 percent of Millennials in the Desire Economy. And only 9 percent in the traditional economy have a university degree, compared to 53 percent in the Desire Economy. They’re all Millennials. But the two mindsets are as different as truffles and button mushrooms.

 It’s not surprising that the total Millennial generation is a poor predictor of anything. It is based on just one factor – age. Think about a 26-year-old single mum holding down three jobs just to pay the bills. She’s a Millennial, but she doesn’t sound anything like the stereotype. So the Millennial generation is excellent at telling us how old they are, but not much else.

Using predictive discriminant modelling, the team of data and social scientists at the Centre for Social Economics identified 192 values, attitudes and behaviours that define Millennials inside (and outside) the $600 billion Desire Economy.

Is the urban Millennial a myth? Not in the Desire Economy where almost three-quarters (72 percent) live in capital cities. Over in the traditional economy, however, there's almost no difference between Millennials and the Australian population living in capital cities.

Desire Economy Millennials earn more, spend more more frequently, are quick to embrace new technology and digital disruptions, are better educated than any other generation, and are the poster child for entrepreneurs, employers and marketers. And the 1.8 million traditional economy Millennials are not.

Myth busted. Well, half the myth busted.   

Dr Ross Honeywill is executive director of the Centre for Social Economics and an internationally published author.

[1] Myers, K. & Sadaghiani, K. 2010, 'Millennials in the workplace: A communication perspective on Millennials' organizational relationships and performance', Journal of Business and Psychology, vol. 25, no. 2, pp 225–238.

[2] Source: Roy Morgan Single Source database (n=256,124).