Gen Z ‘Most Disruptive Generation Ever’

Bank of America predicts that Generation Z (Gen Z) will be the “most disruptive generation ever” and will see their income surpass that of millennials by 2031.

“The Gen Z revolution is starting, as the first generation born into an online world is now entering the workforce and compelling other generations to adapt to them, not vice versa,” said Haim Israel, global head of thematic investment strategy at BofA Global Research, in a report released last week.

CNBC reports this means Gen Z, considered by the U.S. investment bank to be those born between 1996 and 2016, was about to become “most disruptive to economies, markets and social systems.” Lauma Timans-Kalns, a strategist at the bank, explained to CNBC over email that the “defining influential events that bookmark this generation are 9/11 and Covid,” so those born between those years would not remember the former but would certainly remember the latter.

BofA said Gen Z’s economic power was the fastest growing across all generational cohorts. This generation’s income is expected to increase fivefold by 2030 to $33 trillion as they enter the workplace, accounting for over a quarter of global income and then surpassing millennials’ income by 2031.

“The Great Wealth Transfer,” from older cohorts will add to Gen Z’s consumer power, the report said, with baby boomers and the silent generation in the U.S. alone currently sitting on $78 trillion of wealth.

In the BofA survey of Gen Z of more than 14K people worldwide, analysts unearthed market-driving stats like 1/3 of Gen Z would let a robot make their financial decisions, 40% prefer to interact virtually, only 1 in 4 watch broadcast TV and 4 in 5 factor ESG into investment decisions.

Here's how BofA gauges Gen Z's sector impact:

eCommerce

• 45% of U.S. teens "constantly online" helps online retail and warehouse and logistics.
• Rapid drop in the appeal of shopping malls for under-30s.

Travel

• "Sustainability/'flight shaming' reducing the appeal in Gen Z" for air travel.
• Half of U.S. teens don't have a driver's license and "preference for shared mobility could bring resurgence post-lockdown".

 Consumer Discretionary

• "Status symbols continue to matter for the next generation, with social media an ‘always on’ place to measure and compare social markers".
• "Gen Z is the loneliest generation, a surge in pet ownership over lockdown, means heightened long term demand for pet products."

Communications Services 

• Gen Z watches more eSports than traditional sports.
• Faster shift to streaming content.

Consumer Staples

• Lockdown necessity and online innovation for delivery.
• "Demand impacted as the Gen Z reaching drinking age is not taking up drinking as much as older generation".

Financials 

• "New generations most open to new payment methods e.g. phone, cryptocurrency".

Materials

• Need for "plastic sustainability, better packaging to reduce food waste, forest tree carbon sinks relevant to ESG investing".

Information Technology

• Chips "the biggest beneficiary of coronavirus with Moore's Law as the key enabler of the connected world".