12 minute read 28 Jan 2021
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How the next generation will shape the next normal

By Prianka Srinivasan

Associate Director, Technology Insights, Research Institute | Global Markets – EY Knowledge

Student of the future. Focused on technology disruption, innovation and impact on the human experience. Wife, mother, runner and dog lover with a strong case of wanderlust.

Contributors
12 minute read 28 Jan 2021

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  • Beyond COVID-19: The Gen Z Perspective (pdf)

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Gen Z is the pandemic generation — transformed by COVID-19 and defining the world beyond it. Businesses need to understand Gen Z to thrive.

This article is part of the EY Megatrends 2020 and beyond report. 

In brief
  • As the largest generational cohort in history, Gen Z’s attitudes and expectations are poised to shape the next normal.
  • Business leaders must understand this generation’s ambitions and expectations if they are to thrive.
  • Transparency, accountability, trust and a focus on stakeholder capitalism will be key to successfully engaging with Gen Z in the next normal.

For members of Generation Z (Gen Z), especially those between the ages of 18 and 23, the COVID-19 pandemic is poised to be a generation-shaping event, much as the 2008 financial crisis and Great Recession were for Millennials. From school shutdowns and quarantines to social distancing and high unemployment, Gen Z is coming of age in the midst of dramatic socioeconomic tumult.

As members of this generation mature and become future leaders, consumers, workers and voters, what effect will the pandemic have on their views and expectations of society, governments and businesses? What enduring changes do they foresee? And what would Gen Zers do differently if they were in charge? Business leaders need to heed these insights to thrive in the world beyond the pandemic.

To explore these questions, EYQ, EY’s think tank, held an “ideation jam” in September 2020. This virtual brainstorming session gathered 35 members of Gen Z from every continent except Antarctica. This session builds on a similar exercise which was conducted three months earlier with over 100 senior professionals around the world. Through this article, we compare and contrast Gen Zers perspectives with the views expressed by participants in our prior study.

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  • Download our full report Beyond COVID-19: The Gen Z Perspective

Four domains for the next normal

We structured our discussion of the post-pandemic world across four domains:

  1. The global order
  2. Societies and economies
  3. The future of learning
  4. Households and individuals
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Chapter 1

The global order

Gen Z calls for cooperation and data-driven science-based decision making in an increasingly unstable global system.

Instability at the international and national level

Much of the discussion centered around the declining influence of the US and continuing tensions with China. Participants expect smaller countries — particularly in Asia and Africa — to rise in prominence, especially if they handle the pandemic well.

Many also discussed the potential for instability within countries. They see high unemployment rates and deep recessions fueling nationalistic sentiments and bolstering authoritarianism. They anticipate a sharp decline in immigration, with worrying implications for refugees and labor mobility.

Meanwhile, some participants expressed optimism about global collaboration on vaccine development and distribution.

Focused on international institutions

Gen Z participants were divided in their views on the future role of international institutions like the World Health Organization (WHO) and the United Nations (UN). While some expect the influence of these institutions to grow because of their role in addressing the pandemic, others feel that disinformation has permanently undermined trust in these institutions. This topic did not feature as prominently in the previous ideation jam, potentially because this cohort is comprised mainly of college students, who tend to be more idealistic and vested in the role of international institutions.

Indeed, the consensus among Gen Z participants was that a mammoth and complex global crisis requires global cooperation and greater participation of international institutions. So far, policy responses and measures led by national governments have varied greatly. As we continue to see a new wave of infections during the Northern Hemisphere’s winter, this seems unlikely to change.

In science we trust

Gen Z participants uniformly expressed disappointment in leaders’ actions to safeguard public health. They were critical of the lack of data-driven, science-based decision-making with most leaders focused on their political agendas instead.

Almost unanimously, Gen Z participants said that if they were in charge, they would prioritize science and technology to tackle the pandemic. They would be more proactive, issuing mandatory mask wearing and driving global cooperation on vaccine development and distribution. Given that this generation has grown up entirely in the internet age, it is perhaps expected that they lean so heavily on data, science and technology as the main tools for combating the pandemic.

  • Actions for business leaders

    • CEOs: Communicate business strategies and actions backed by data and science to foster trust.
    • CHROs: Re-think business and operating models to enable a global remote workforce, ensuring equal opportunity for growth and development.
    • CROs: Incorporate potential geopolitical instability into risk management frameworks.
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Chapter 2

Societies and economies

The pandemic strengthened Gen Z’s call for more equal, fair and sustainable societies and economies.

Inequality concerns front and center

Gen Zers expect the pandemic to worsen inequality and heighten social unrest. Participants emphasized the growing digital divide and inequitable access to education and health care. However, Gen Zers were more pessimistic about the prospect of reform than participants in the previous ideation jam. They cited politics, corruption, interest groups and lobbyists as impediments to bridging these gaps.

Participants also discussed the growing divide between thriving large companies and struggling smaller businesses. The wholesale shift online has significantly empowered tech companies. Gen Z participants want governments to more directly hold companies responsible for social well-being. This aligns with insights from the latest EY Future Consumer Index which found that 56% of Gen Zers believe companies must put society ahead of profits. 

Gen Zers also raised concerns about workforce automation, which the pandemic is accelerating, particularly for jobs that cannot be done remotely. While this is safeguarding the lives and health of workers, it is also likely to exacerbate existing social inequalities.

Shifting to a green economy

Since this generation will bear the brunt of climate change, it was a central concern during the discussion.

Gen Z participants expect the pandemic to increase awareness of climate change, triggering governments and businesses to take more decisive action. Many anticipate intra-city cooperation to take the lead. However, some participants felt the pandemic’s economic fallout would lead governments to de-prioritize climate change.

Leading with empathy

Gen Zers see leaders as lacking empathy for the vulnerable. If in charge, Gen Zers said they would provide more resources and support for small, local businesses, prioritize equitable access to treatments and vaccines, and emphasize cooperation rather than individualism.

Underlying all their responses, Gen Z displays a profound disillusionment with today’s status quo. They seem eager to take the reins and lead the transformational reforms necessary to achieve inclusiveness, equal economic opportunity and social justice.

  • Actions for business leaders

    • CEOs: Authentically commit to sustainability and equality goals. Create measurable metrics and look for tangible ways to change market-facing aspects of business to showcase these commitments and progress.
    • CEOs: Find ways to cooperate with and help local businesses.
woman in Hijab doing a video call in her laptop
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Chapter 3

The future of learning

Gen Z sees a new paradigm of education emerging from the COVID-19 pandemic.

Learning moves beyond the classroom

Gen Z participants are fairly critical of the implementation of distance learning during the pandemic, pointing to the uninspired application of platforms to existing educational models, the resultant high levels of teacher burnout, and the confusion created by oscillating between online and in-person models.

Beyond the pandemic, participants expect virtual learning to continue, albeit with much-needed reforms, such as improvements in virtual teaching methods and mandatory certifications for online learning. They expect online platforms to improve security features and educational institutions to develop their own learning platforms. Such developments could take virtual learning mainstream, particularly with the advent of augmented and virtual reality.

Some participants expressed concern that online learning could hurt social skills by depriving students of interaction with their peers. However, others felt that distance learning could benefit shy students, who might have more confidence to participate in a virtual setting.

Virtual learning raises equity issues

Gen Zers expressed concerns about the distributional impacts of online learning. As technology becomes more important, this simultaneously makes education more accessible (thanks to digital platforms) and more exclusive (because the technology required to access these platforms is expensive). Some posited that in-person instruction may become an exclusive experience, accessible only to the elite. Tackling this new digital divide will need to be a key focus for policymakers and educators.

Some participants pointed out that economic hardship created by the crisis is causing many to forgo education, resulting in a decrease in the quality of education in developing countries. Still, others were optimistic that these challenges could be overcome. They argued for schools providing laptops to all students to bridge the access gap and envisioned a future in which the school one goes to is no longer determined by one’s postal code. 

Challenging incumbent institutions

Gen Z participants also expect the pandemic to challenge incumbent educational institutions’ market power and entrenched methods and assumptions. They see online learning lowering the emphasis on the “college experience,” devaluing degrees and decreasing the cost of education.

Ultimately, these could be positive developments, shaking up a sector that has been largely impervious to change and creating the opportunity to redefine the concept of learning itself.

  • Actions for business leaders

    • CEOs: Work with educational systems to address inequities.
    • CEOs: Explore new models for companies to play a more prominent role in learning.
    • CHROs: Explore new approaches to recruiting that are based on skills and aptitude rather than resumes and experience.
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Chapter 4

Households and individuals

Gen Z points to changing consumer behavior, rebalanced household structures and mental health pressures as key themes.

Do-it-yourself and minimalism are here to stay

Participants in both ideation jams say the pandemic’s simplified household consumption patterns will continue, with permanent reductions in luxury and travel spending. Older ideation jam participants viewed this as embracing a simpler, more sustainable lifestyle, while Gen Zers believe the motivation is to increase household savings.

Both sets of participants expect the do-it-yourself ethos to outlast the pandemic, as people produce their own bread, make their own furniture, give themselves haircuts and more.

Changing shape of homes and households

Gen Z participants say that the experience of lockdown will strengthen familial bonds. Quality family time has increased while entertainment options outside the home have dwindled. They expect gender roles and burdens to be rebalanced as men play a bigger part in domestic life. Households will expand as long-term unemployment causes family members to remain at home longer or to return to family homes. There will also be an increase in multifamily households and co-living arrangements.

EY Future Consumer Index

COVID-19 has transformed the lives of consumers. What do they value? What will it take to serve them? How will your business adapt?

Explore the data

Gen Zers see permanent changes to the shape and location of the home itself. Homes will be remodeled to accommodate remote work, home schooling and swelling households. People with means, especially in Western societies, will continue to trade small city dwellings for larger suburban homes.

Gen Z participants, like their counterparts in the other ideation jam, foresee long-term mental health impacts from the pandemic, requiring more access to mental health care.

Addressing inequities at the household level

Gen Zers identified numerous ways in which leaders are failing individuals and households. They want governments to provide more unemployment support, housing subsidies and resources for families with small children. They would also boost the health care response to the pandemic, providing more consistent information and messaging, greater access to free testing and personal protective equipment, and more trust building with local communities.

Leaders should recognize that many homes do not provide a livable or safe lockdown environment, several Gen Z participants noted, whether due to overcrowding or family dynamics. Many households lack the technology and access for remote learning, and the stresses and continuous proximity of lockdown increase the potential for spousal and child abuse. They want more helplines to provide women and others with resources and assistance.

  • Actions for business leaders

    • CEOs: Prioritize physical and mental health of employees. Innovate for new post-pandemic consumer behavior.
    • CHROs: Provide mental health support to employees managing work, home and children simultaneously. Offer financial assistance to set up home offices.
    • CIO/CTO: Take measures to ensure employees have the digital infrastructure and tools to work remotely.

Gen Z’s message to leaders

We asked Gen Z participants what message they would deliver to the CEOs of the largest companies. Their responses resoundingly urged business leaders to be more people- and planet-centric, putting the well-being of their customers, employees and the environment above profit. As companies look for ways to grow in the post-pandemic world, they will need to factor in Gen Z’s expectations.

Gen Z’s message to leaders graphic

To resonate with this generation, business leaders will need to demonstrate their commitment to important issues such as social justice and climate change. Transparency, accountability and trust — as well as focusing on stakeholder capitalism — could be the keys to success in the “next normal.”

Three steps for thriving in a Gen Z-led future

Marcie Merriman, EY Americas Cultural Insights & Customer Strategy Leader outlines three ways to change today in order to thrive in a Gen Z-led tomorrow.

1. Treat sustainability as a competitive edge and not a compliance exercise: 

To build and sustain relationships with a new generation of environmentally conscious consumers, employees and investors, organizations must act now to adopt sustainable operating practices and authentically showcase their positive environmental credentials.

2. Make a genuine commitment to equality and be transparent about progress: 

Gen Zers demand the organizations they work for and buy from play an active role in addressing social and economic inequities. Businesses should talk transparently about their societal commitments and their journey to achieving them. Admitting to currently falling short is okay as long as it is backed up by a clear plan for improving.

3. Move at the speed of societal change: 

Understanding the changes required to succeed in a Gen Z-led future is not enough; organizations have to move quickly to transform themselves, all the more so in a rapidly evolving post-pandemic world. Fortune will favor the brave — and the speedy.

Summary

For years to come, Gen Z’s attitudes and expectations will shape everything from the structure of the international order to the nature of education and the societal responsibility of companies. In the world beyond the pandemic, business leaders will need to focus on the preferences and expectations of the pandemic generation.

About this article

By Prianka Srinivasan

Associate Director, Technology Insights, Research Institute | Global Markets – EY Knowledge

Student of the future. Focused on technology disruption, innovation and impact on the human experience. Wife, mother, runner and dog lover with a strong case of wanderlust.

Contributors