Gen ZA will be in the prime of life (27-42 years) by 2047
“There was a time when we considered 20 years to a generation before we started counting the next one, since that is the age at which some start marrying and start earning a living. If that gap has now come down to 15 years or less, it implies that trying to define a generation by age intervals is past its sell-by date. The GenZ person born in the late 1990s is not going to share the same attitudes with those born in the early years of the second decade of the 21st century. Given the speed with which technology is changing — widely available artificial intelligence (AI) models are barely four years old today — Gen Alpha, which came after GenZ — is already ending.”
There is much talk about GenZ these days, especially after the protests led by students in the wake of the National Eligibility-cum-Entrance Test (NEET) paper leaks. GenZ is defined as those people who were born between 1997 and 2012, which means some have already entered the job market, while others are still in the classroom or doing odd jobs, the latter in case they can’t afford higher education.
There was a time when we considered 20 years to a generation before we started counting the next one, since that is the age at which some start marrying and start earning a living. If that gap has now come down to 15 years or less, it implies that trying to define a generation by age intervals is past its sell-by date. The GenZ person born in the late 1990s is not going to share the same attitudes with those born in the early years of the second decade of the 21st century. Given the speed with which technology is changing — widely available artificial intelligence (AI) models are barely four years old today — Gen Alpha, which came after GenZ — is already ending.
So, when we talk about the young today, we are essentially talking about a mix of later-born GenZ and the early-born Gen Alpha, and it is this cohort (born between 2005 and 2020) that may share one characteristic: of being born entirely in the digital age, where one spends a lot of time watching screens, whether on the laptop or the smartphone. Let’s call them Gen ZA (or ‘Zah’).
The road to Viksit Bharat, assuming it is reachable, will depend on how this cohort is educated, skilled, nurtured and allowed to contribute to national wealth creation. Gen ZA will be in the prime of life (27-42 years) by 2047.
Unfortunately, it is precisely this ZA generation that faces the toughest future, for it has been born when AI and automation will start impacting entry-level jobs, or jobs that need middle-level skills.
Consider this reality: the earnings of the entry-level software coder is not much higher than what a lower-skilled Zomato or Swiggy delivery person working up to 10 hours a day would be capable of earning — Rs 18,000-20,000. The coder’s salary may even be lower than what a good carpenter, plumber or electrician may earn in the metros. Of course, the job quality of the greenhorn coder may be higher than that of the delivery boy who rides a bike under the scorching sun, but earning levels are comparable when adjusted for age and skillsets.
The challenge Gen ZA is facing is one where formal full-time jobs are less likely to be available, and hence incomes may also be lumpy and uneven between months. This generation, especially the one in contractual jobs that depend on work done and not time spent in the office, will not easily be able to buy a home using equated monthly instalments (EMIs).
A former colleague and columnist, Vivek Kaul, speculated recently about whether GenZ (my Gen ZA ) will ever be able to afford a home, or is destined to live in rental homes or with family. It is a relevant question to ask when almost anything affordable is located far away from the workplace, or simply unaffordable to most single-income nuclear homes. The fact that permanent jobs are themselves becoming scarce reinforces this fact.
Kaul also speculates that since GenZ are mostly progeny of the Millennial generation (1981-1996), they are more likely to be either single children or have only one sibling. This means, even if they don’t buy a home because they are unaffordable, they may end up inheriting one from their Baby Boomer grandparents or Millennial parents, who lived in times when regular jobs were easier to come by.
If fewer people buy homes, it means that EMIs, or differently structured EMIs that allow for flexible payments over the same time period, may be used for the other objects of desire beyond homes — from fancy cars to gadgets or foreign vacations. If Gen ZA kids are born digital natives, it stands to reason that they will be buying gadgets like smartphones and digital devices more often than their parents.
But unlike homes, which last a lifetime if maintained properly, gadgets become obsolete rather quickly. These days, one can barely keep a smartphone or laptop for three years without them beginning to slow down or even hang repeatedly. To make sure that you do indeed keep upgrading, the manufacturers of these gadgets will keep updating your software to the point where the old hardware will not be able to cope with the new software’s memory and processing requirements.
Add the need for cyber security, and the need for upgrades and frequent changes of gadgets can only grow. The tech industry knows that it can upgrade you enough to kill the utility of the old device and force you to buy another, more expensive, gadget.
What this is adding up to is a simple result: Gen ZA, and the ones to follow, will be investing or buying gadgets for the short-term, which makes it obvious that those who want to sell them anything will have to make it more like a rental than a genuine purchase. At some point, smartphones will not be bought, but bundled into a regular post-paid connection with regular monthly payments that will amortize the cost of the phone before the next upgrade.
Gen ZA, even if it ultimately buys a home, will be more likely to stay in rented properties, or in co-living apartments or with parents for a substantial length of time. I suspect that many of them end up buying cheaper homes on the periphery, from where they cannot commute to work, and then buy cars and gadgets instead.
The upper middle class and the richer classes above them buy timeshares for vacations and even shares in private jets. The middle-middle and lower middle Gen ZA will be doing the same with the homes and gadgets they buy.
Thirty years ago, in 1996, Swiss watchmaker Patek Philippe faced the same problem: how do you sell a watch that costs thousands of dollars to buy (a minimum of Rs 15 lakh in India) when you can get a good enough watch to tell the time for under Rs 200? It came up with a brilliant ad which ran: “You never actually own a Patek Philippe. You merely look after it for the next generation.”
For Gen ZA, whether it is a home or a phone or a car or furniture or anything which costs a lot, ownership may not be the available option. It will either inherit, or rent or share a service with family, friends or colleagues. Gen ZA will be the first generation that will own less and hire and rent more.
(R Jagannathan is a Writer and Author)
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