WELCOME TO THE NEXT GEN ECONOMY
March 2023
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Role: Cultural Strategy Lead
Challenge: How to understand and navigate the emerging economic paradigm shift among Next Gen audiences
The full white paper is available here
The Cultural Tension
In the course of the ethnographic and qualitative research I was engaged in as part of my role leading Gen Z =strategy at Zak/Selfhood, I realised that we were getting a lot of very strange answers to what, we thought, were very simple questions about jobs, income, and employment. Questions like 'what do you do?' and 'what is your primary source of income?' elicited answers that made it clear that a large portion of Gen Z are working multiple jobs across multiple fields, aggregating incomes across a wide variety of different sources that left many of our respondents almost unable to answer these questions at all.
Since the start of the pandemic, we’ve witnessed a fundamental change in the way young people think and talk about value, money, and their role within the world. And I'm not the only one who noticed. Many of Zak's clients and partners observed similar changes in the way that the Next Gen engaged with them; some small, some more substantial, but all with significant impact on their businesses and other organisations around the globe. It became clear to me that we’re on the precipice of a paradigm shift in the way the next generation transact with each other, and with businesses and organisations.
I embarked on this study in response to these observations.
The Research Approach
I spoke to more than 150 young people aged 16-30, spread across 19 different countries, from a broad variety of socio-economic backgrounds, genders, and experiences. Using a mixture of qualitative approaches including interviews, ethnography, focus groups and written tasks, I covered a broad array of topics from prevailing attitudes to social media, spending habits and ideas around work and income, social and environmental ethical concerns and motivations.
As I explored these seemingly disparate issues throughout the course of our research, I realised that they were interconnected. I found that the social and financial pressures of the pandemic had intensified an already deep set of tensions for Next Gen audiences, and it became clear that the changes I was observing were their efforts to adapt to these pressures, in many cases turning them into opportunities; hence blurring boundaries between commerce, entertainment and connection, laying the foundations for a new and emergent economy. This report quickly evolved into an effort to understand, catalogue and provide a map for navigating this new economy.
Theoretical Framework
Applying Manuel Castells' network society theory alongside contemporary cultural theory revealed how Next Gen is creating what we might call a “parallel economy” — one that operates alongside, but often in opposition to, traditional economic structures. Drawing on Michel de Certeau's concept of “everyday resistance,” we saw how Next Gen uses digital platforms not just as tools, but as spaces for economic reimagining.
Cultural Pattern Recognition
Cross-referencing behavioural data with historical economic transitions revealed fascinating parallels to previous economic paradigm shifts. Just as the industrial revolution transformed the relationship between labour and capital, the Next Gen Economy is fundamentally restructuring the relationship between value creation and community. This manifests in three key ways:
The rise of micro-entrepreneurship and the rejection of traditional employment
The fusion of consumption and activism
The emergence of circular value systems that marry sustainability and community with profit potential
The Findings
The Next Gen live in an uncertain world. Growing up in an era of ubiquitous digital technology and an unmatched rate an interconnected and fluid way of processing their environment, rather than digesting it through a binary framework. For them, it’s not about this or that, but rather, this and that. This mindset represents a paradigm shift when compared to older generations and sets them apart as a distinctive group of people despite their differences of culture, language, or race.
This mindset has changed the conception of empathy, self- expression, exchange and newness to rethink how and why they make money. Next Gen are more vulnerable to macro level uncertainties within a digitally charged, globalised economy, and are aware of the effects these stresses have on inherent human vulnerabilities; driven by individual authenticity while also understanding that collectivity empowers individuality, leading to calls for action in the face of adversity.
Either by choice or by necessity, a substantial portion of older Next Gen have dropped out of the conventional workforce completely, and young people just starting on a career path are finding it blocked by Covid, Vladimir Putin and the spiralling cost of living. This is a time of massive instability and broad distrust of large companies and institutions.
This, in turn, drives a need to find alternative sources of income; the social safety net and the welfare state are seen as unreliable and inconsistent, and there is an increasing sense that young people are being left to fend for themselves. As the Next Gen have adapted to the new conditions in the world around them, by rewriting the rules and creating something new, three major shifts have occured:
FROM TOP DOWN TO PEER-TO-PEER
“I am a micro-influencer that doesn’t subscribe to influencer attitudes (totally not like other girls) mainly because it creates an unhealthy power dynamics and parasocial relationships. So, I tend to avoid obsessing over or pretending I somehow know strangers through a camera/phone screen. What I do know is I’m human and am absolutely influenced by popular style/trends and choose which suit my overall experience. I avoid following many influencers on Instagram, but I am huge on supporting via YouTube!” - Maelle, 24
The Next Gen exploits the connectivity of platforms in the same way that the Millennials have; however, instead of being beholden to (or trying to become) the biggest voices or the highest earners, The Next Gen Economy is built on collaboration, communality, and interconnectedness.
FROM COMMENTATORS TO CHANGE MAKERS
“I definitely think brands should take a viewpoint on social issues. However, I do think it’s very hard for campaigns to seem sincere because a lot of the time it does just seem like it’s a bit of a money grab. A lot of people sort of feel that that’s just something that the brand feels they have to do, rather than the brand wants to do that. Particularly with stuff like changing logos and changing colour schemes, it gives a sense of you’re not doing it because you actually care about the issue, you’re just doing it because you feel like you have to.” - Jai, 21
Millennials and Next Gen both see social media as having enormous potential to change the world. But where Millennials have tried to comment their way to change, Next Gen is blurring the lines between digital activism and real-world action. The Next Gen Economy is all about concrete change; nowhere is this more true than in the anti-work movement, but it's also true in the way that the Next Gen spend. Throughout the pandemic, we saw a resurgence in rhetoric around ‘shopping local’ across older generations as the predatory nature of large companies like Amazon steamrolled over small, local stores. For the online generation, local is less important, but small is still a priority; we found Next Gen going out of their way to pay directly for, or otherwise support, small content creators rather than large brands. The unifying effects of the digital space and the parasocial relationships fostered by social media create the same sense of connectedness that comes from shopping local, even if the buyer and seller are separated by oceans.
It's hard to overstate the distrust of brands engaged in woke-washing — the way in which brands attempt to connect meaningfully with Next Gen by using the uses key social issues important to them — and although it has become a serious strategy in recent years, it aptly highlights the difference between Millennial commentary and Next Gen action. Cause marketing is performative by its nature; This resonates with the Millennial drive to make declarative statements in support of (or condemnation of) issues and ideas but for Gen Z, it is lip-service, marketing self-indulgence. To meaningfully connect with the next generation, brand purpose should be owned at chief executive level, be visible, apparent or conveyed in company culture and behaviour. Only then should it externally manifest itself. But once externalised, much like someone who talks about all they do for charity, it’s open to cynicism.
FROM LINEAR TO CIRCULAR
“I care about sustainability; we’re in a climate crisis and brands need to commit to that and commit to lowering their carbon footprint. As a buyer I’m trying to find more ways to be sustainable when I shop, like buying less; I value quality over quantity. Just because you make a lot of things doesn’t mean they’re good.” Hauke, 19
The Next Gen is going further than the conscious consumerism of Millennials; fuelled by financial pressures and ethical concerns, The Next Gen Economy has a renewed, and potentially lucrative, emphasis on turning the old into something new. An apposite example is the rise of resale, sitting right at the nexus of sustainability, thrift and alternative income sources.
Digital platforms have made resale simple; if you can buy it, you can sell it. Over the past three years, reselling and thrifting has grown 21 times faster than the actual retail apparel market, which means that there are more second-hand shoppers than ever before. Next Gen are driving this, with a 45% growth in buying second-hand in the past two years. There is no longer a stigma around thrifting being only for those in a lower socioeconomic class. Rather, thrifting is embraced with open arms by all as people associate it with buying ‘vintage’, ‘authentic’, and ‘unique’ pieces. Resale is a huge part of the Next Gen economy. Driven in part by the desire for goods that last and by a rejection of fast fashion, sustainability is a key element, but it's also about owning quality items for less money, and even more about investment; the market offers users a chance not just
to make their money back, but potentially to profit, too.
Cultural Impact
Understanding the Next Gen Economy isn't just about adapting to new consumer behaviours — it's about recognizing a fundamental shift in how value is created, exchanged, and understood. This has profound implications for any brand working with Gen Z, not just financial institutions.
