I have been an investment banker for well over 40 years, working in the citadel of finance – the capital markets of London. I have lived through many financial crises. However, not one of them has been as profound as the shift now taking place throughout the world, precisely because it’s not a purely financial shift, but a deep-rooted challenge to the philosophical underpinning of the market economy, as defined by a previous generation. It’s a challenge to a long-held status quo and its effects will be greater than the post-war Bretton Woods agreements or any governmental efforts to create global financial stability.
The Great Wealth Transfer, as it is known, will see assets worth 100 trillion dollars shifting from one generation to the next. The shift has started already. It’s imperceptible to most observers. But in the US alone, $84 trillion of assets will transfer from older generations – predominantly mine, the so-called baby boomers, all of whom will be at least 65 by 2030 – to our children in the Millennial and Zoomer generations. In the UK, the corresponding figure is estimated at £5.5 trillion. This is the largest flow of generational capital ever seen in the history of humanity. And how we deal with this legacy will change the way we live now and reshape the global economy.
Because the major shift that will make or break the future of the market economy is intergenerational. It is not just huge amounts of money that are on the move to the younger generations. Power is as well. By 2030, Millennials alone will make up 75 per cent of the global workforce. Just by pure weight of numbers, they will be the ones, along with their Gen Z successors, whose opinions matter most. The two groups (who I will refer to together as Zennials) are remarkably similar. They are tech-savvy – and crucially tech-empowered – digital natives who, broadly speaking, distrust the economic, social and political systems that were responsible for, most significantly, 2008’s Global Financial Crisis (GFC). It will be their principles that guide the business plans of the future. Indeed, they are already guiding the business plans of today.
Zennial representatives will walk the halls of power across the globe over the coming decades; indeed, some of them already have, or are already there. Chilean president Gabriel Boric is 37, as is Finland’s former Prime Minister Sanna Marin. By some definitions, former New Zealand Prime Minister Jacinda Ardern (born in 1980) is a Millennial.
In short, while Boomer money will have a huge part to play in bankrolling the future, their influence is on the way out. And their children have very different ideas on how they want the world to run. We are entering the Zennial age. They will have the power, not least through technology but also through the capital they are inheriting, to throw out the past and implement the future they want. It will be an age in which a socially energized generation has the financial muscle and technological resources to bend capitalism to its will, to the point that it either breaks or moves. They want to shape, not be shaped, by the world they have been handed. They live to change the world, to rebuild it in their own image.
Herein lie the seeds of danger. Not all of the past needs to be dismissed as being destructive, and not all of the future aspirations of Zennials are to be desired. Notwithstanding the power of this Zennial wave, the Boomer generation still has a key corrective contribution to make.
There is no doubt we face a challenging future, but it is one I am excited by and wish to explore; because I genuinely believe there is a way we can come out the other side refreshed and improved. There is a reciprocity required here, as both sides of the generational divide need to come together to form a learning community, both need to recognize the need to break down silos and appreciate the contributions of both Boomers and Zennials. A new way of working is needed. This new way of working is what I call CO.
In essence, CO is a shift from the radical individualism of post-war generations, to a prioritization of collaboration, compassion, community and collective experience. More succinctly, it’s a shift from me to we. A shift to understanding that what individuals can gain from working together in CO is greater than what they give up in order to participate. We give up far less than we gain by acting together. And the gains are economic as well as ethical.
From an intergenerational perspective, this means understanding that young and old, Zennials and Boomers, can contribute in the new capitalism; the former with their insight, energy and desire to be change-agents, the latter with their hindsight, their wisdom and their desire to know the world is in good hands. Together these create the foresight needed to steward the scarce resources of the planet and change the way we live and work together.
We are at a pivotal point in the emergence of a new way in which capital is earned, invested and deployed. We need to be prepared. Because these changes will lead either to the destruction of our way of life as we know it or to the necessary building of a new, better capitalism.
The 100 Trillion Dollar Wealth Transfer by Ken Costa is available for pre-order now. Use discount code 100TRILLION for 20% off your purchase.
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