Writing for The Atlantic, PPI’s Michael Mandel argues that young people are viewing themselves as microbusinesses operating in a highly uncertain economic environment.
Millennials are shifting from tangibles (cars and homes) to intangibles (education and access to data), but they are not alone. In today’s data-driven economy, the business sector is moving along the same tangible-to-intangible path as the Millennials, perhaps at an even faster pace. Business spending on nonresidential structures, other than mining-related, is roughly 30% below the 2007 pre-recession highs, while investment in software is up almost 20% over the same period.
In fact, Millennials are responding to the same trends as businesses, and for much the same reasons. Members of the younger generation are being forced — or encouraged — to think entrepreneurially, to view themselves as microbusinesses operating in a highly uncertain economic environment. Why buy a home or car if there are lower-risk, lower-cost options? Why invest in physical capital if spending on human capital and data can have bigger payoffs?
This shift changes corporate strategy and marketing aimed towards Millennials. If Millennials are operating like microbusinesses, then companies must reframe their appeal in terms of business values such as security, collaboration and competitiveness. So they will be open to companies that create products and services to help them protect themselves, find allies, or prosper economically.