A few years ago, Paul Laudicina, Chairman Emeritus of Kearney, asked a profound question, “What’s today’s biggest threat to industry, even to society?”[1] His answer, “I believe the biggest peril we face is losing the positive engagement of the next generation of leaders. I’m talking about the biggest generational cohort, U.S. millennials, and now also their younger peers, Gen Z, who are navigating unprecedented global challenges — from a pandemic to a global recession to climate change — during their formative years.” He adds, “The very future of leadership itself is at stake, as the previously considered guarantee of a successful and happy future becomes increasingly tenuous. Survey data tells us that younger Americans are less optimistic about the future and more skeptical about how the system might deliver on their dreams, and that the pandemic and other events have eroded some potential young leaders’ trust in governments and electoral systems.”

Laudicina is not alone in his concerns — nor is America the only country in which young people are questioning their future. Journalist Bret Stephens writes, “The central fact about the democratic world today is that it is leaderless. This is bad in normal times. It is catastrophic in bad ones.”[2] He continues, “We are stumbling, half-blind, into four distinct but mutually reinforcing crises, each compounding the other.” Those crises are:

• Decreasing international credibility.
• Decreasing economic credibility.
• Rising tensions in poorer countries.
• Attacks on liberal democracy.

Younger generations believe previous generations have ignored and damaged their future. Larry Fink, Chairman and CEO at BlackRock, explains, “The [younger generations] believe my generation — the Baby Boomers — have focused on their own financial well-being to the detriment of who comes next.”[3] Scott Galloway, a Clinical Professor of Marketing at NYU’s Stern School of Business, agrees with Fink. During an interview with Public, he was asked, “Considering the current economic environment, how can [young] people still make it out on top in the end?” His answer, “I’m not here with a message of hope. … I see every economic policy is basically a transfer of wealth from people your age to my age.” Listen to his entire interview and you will get a sense of why so many young people are disengaging and becoming disillusioned.

Why younger generations are disengaging

This year has been characterized as the year of the election. As journalist Koh Ewe noted last December, “2024 is not just an election year. It’s perhaps the election year. Globally, more voters than ever in history will head to the polls as at least 64 countries (plus the European Union) — representing a combined population of about 49% of the people in the world — are meant to hold national elections, the results of which, for many, will prove consequential for years to come.”[4] To date, election results have been troubling as young voters have often supported authoritarian politicians facing more moderate opponents. The results are likely to be bad for business as protectionist policies are put in place and xenophobia heightens. The reason that the status quo is being challenged world-wide has mostly to do with economics. Journalist Heather Long explains, “Millennials have had such a tumultuous start in the workforce, they have been nicknamed the ‘unluckiest generation.’ They are struggling to navigate the most unaffordable housing market since the early 1980s. And that’s before anyone talks about the larger challenges of climate change, wars, and political partisanship and paralysis.”[5]

Professor Galloway believes many members of our rising generations have given up on the dream of owning their own home because they can’t afford to buy one. Even worse, he laments the fact that many of them are not having children because they can’t afford to raise them. Savvy business leaders know that an aging population is not good for business. Fink notes, “The whole world is [aging], albeit at different speeds. Brazil will start seeing more people leave its workforce than enter it by 2035; Mexico will reach peak workforce by 2040; India sometime around 2050. As populations age, building retirement savings has never been more urgent. By the mid-century mark, one-in-six people globally will be over the age of 65, up from one-in-11 in 2019. To support them, governments are going to have to prioritize building out robust capital markets like the U.S. has. But this isn’t to say the U.S. retirement system is perfect. I’m not sure anybody believes that. The retirement system in America needs modernizing, at the very least.” However, Fink notes, the current challenge is restoring hope to younger generations. He explains:

“America has rarely been a fearful country. Hope has been the nation’s greatest economic asset. People put their money in American markets for the same reason they invest in their homes and businesses — because they believe this country will be better tomorrow than it is today. This big, hopeful America has been the one I’ve known my whole life, but over the past few years, especially as I’ve had more grandchildren, I’ve started to ask myself: Will they know this version of America, too? … [An article in The Wall Street Journal] showed that from the mid-1990s through most of the early 21st Century, most young people — around 60% of high school seniors, to be specific — believed they’d earn a professional degree, would land a good job, and go on to be wealthier than their parents. They were optimistic. But since the pandemic, that optimism has fallen precipitously. Compared with 20 years ago, the current cohort of young Americans is 50% more likely to question whether life has a purpose. Four-in-10 say it’s ‘hard to have hope for the world.’”

Long concludes, “Young Americans have had a harsh introduction to capitalism. Even as the economy is back on strong footing, many remain deeply anxious.”

Can we re-engage them?

Laudicina insists, “If nothing is done to address [all these problems], a generation or more could be lost. Their skepticism, creeping toward cynicism — regardless of how understandable it may be — could have a corrosive and long-lasting effect on how future leaders think and behave.” This is not just a political problem or a societal challenge. It is also a business problem and it will take business leadership to overcome it. In one of my first articles about leadership, I wrote, “Genuine global leadership will only be achieved when enlightened world leaders create and promulgate a set of governing principles that provide guidance for a world with an increasing and significant amount of instability. It must be a sweeping vision that deals with issues from super-empowered individuals to non-state actors to a rising hyperpower. Leadership vision is most poignant in times of instability and is most needed and most effective when providing guidance in times of rapid change.”[3]

Fink believes the first step in re-engaging rising generations is inspiring them with a vision of a better America. He writes, “If future generations don’t feel hopeful about this country and their future in it, then the U.S. doesn’t only lose the force that makes people want to invest. America will lose what makes it America.” He continues, “What I do know is that any answer has to start by bringing young people into the fold. The same surveys that show their lack of hope also show their lack of confidence — far less than any previous generation — in every pillar of society: In politics, government, the media, and in corporations. … Young people have lost trust in older generations. The burden is on us to get it back.” Since younger generations “have had a harsh introduction to capitalism,” Fink believes that trust in capitalism needs to be rebuilt. He explains, “Despite the anti-capitalist strain in our modern politics, most world leaders still see the obvious: No other force can lift more people from poverty or improve quality of life quite like capitalism. No other economic model can help us achieve our highest hopes for financial freedom — whether we want it for ourselves or our country.”

Concluding Thoughts

Long asserts, “No one expects business leaders to solve all these problems.” Unfortunately, this year’s global election outcomes are unlikely to produce either a national or a global, visionary leader capable of re-engaging rising generations. As a result, business leaders must show their mettle by leading boldly during these uncertain times. It will take “leaders,” not a single visionary, to address the challenges faced by younger workers. And business leaders in liberal democracies are better positioned to make a difference than those in autocracies. Stephens explains, “The free world will always retain formidable advantages over its antidemocratic adversaries because we are better able to acknowledge our mistakes and correct them. But the cascading crises we face would challenge even the most inspired leaders.” It will be difficult, but we must raise the hopes of disengaged young people. Fink concludes, “The burden is on us to get it back. … Perhaps the best way to start building hope is by telling young people, ‘You may not feel very hopeful about your future. But we do. And we’re going to help you invest in it.’”

Footnotes
[1] Paul Laudicina, “Where Is the Vision For Tomorrow’s Leaders?” Industry Week, 16 September 2021.
[2] Bret Stephens, “Our Leaderless Free World,” The New York Times, 26 July 2022.
[3] Laurence Fink, “Larry Fink’s 2024 Annual Chairman’s Letter to Investors,” 2024.
[4] Koh Ewe, “The Ultimate Election Year: All the Elections Around the World in 2024,” Time Magazine, 28 December 2023.
[5] Heather Long, “Here’s why Americans under 40 are so disillusioned with capitalism,” The Washington Post, 1 April 2024.
[6] Stephen DeAngelis, “The Need for Global Leadership,” Enterra Insights, 4 August 2006.