I often wonder what the world will be like after Generation-Y takes over. In fact, Gen-Y promises to be our most entrepreneurial yet.
In the 25 years or so since the dollar was floated and Australia opened up its economy, the baby boomers have been carrying the load as far as exporting is concerned.
At the moment, we are in succession mode, as many baby-boomers are “sea changing” and “tree changing” (and maybe with global warming “cool changing” – watch housing prices in Tasmania) and ambitious Gen-Xers are taking the reins of our global enterprises.
Gen-Xers are now making the news – take Eddy Groves of ABC Learning or Janine Allis of Boost Juice – and meeting CEOs in their late 30s and early 40s is no big deal.
But what will happen after Gen-X? How about the Generation-Ys – born between 1978 and 1994? Think of this – even the oldest Gen-Y was only five years old when the dollar was floated (their pocket money has always been subject to exchange rate fluctuations) and the youngest were three years old during the last recession Australia ever (had to?) have.
How will Gen-Y fare with a larger global economy with the advance of China and India and all the structural changes and influences that go with it?
So far, international business and trade is still a battle of the baby-boomers. The age profile of Australia’s small and medium sized enterprises (SMEs) reflects this if you focus on the exporting sector.
According to research by Austrade/Sensis, the average age of the proprietor of an exporting SME tends to be older that your local domestic businesses. According to the research, 39% of all exporting SMEs were classic baby-boomers aged in their 50s, and a further 27% were over 60.
By contrast Generation-Xers made up smaller numbers, with 20% of all SME exporters in their 40s and 13% were 30-somethings. Gen-Ys led only 1% of all exporting SMEs.
Is this a surprise? Not really. After all, it takes experience to become a successful exporter. For exporting SMEs as a whole, 42% of businesses have been in the game for over 20 years. This compares to 6% that have been around for less than five years, and 25% that have been around for less than 10.
Basically the data bears out the fact that you need a bit of experience to compete in global markets (to get used to swings in commodity prices, exchange rates and the like) and also to build strong relationships with your overseas business partners so you can survive dramatic events like the Asian financial crisis or the dot-com crash.
So what do we know about Gen-Y? According to Gen-Y commentator Peter Sheahan, there are some promising signs that will help Australia’s future engagement with the global economy. “Gen-Y’s basic outlook is global thanks to immigration and technology. There’s no hand-wringing about multiculturalism,” Sheahan says.
“Gen-Ys just look around at their friends to see the United Nations. Thanks to communications technology, their outlook is global, and all the trends that matter in music, entertainment and popular culture are all about the world in nature,” he explains.
Gen-Y will also not be alone with major emerging markets like India, Indonesia, Vietnam, Eastern Europe and the Middle East all having young populations. In short, nearly one in three people are now engaged in the global economy somehow, and many of them are under 25.
While Sheahan believes you can take the homogenous line a bit far as “the demands and expectations of the 200 million Gen-Ys in China are not the same as Australia’s 4.5 million Gen-Ys”, he does admit there’s a bit of a “Mao’s-little-emperor syndrome too in China, as the parents of Gen-Ys in one-child families do think that the world does seem to revolve around them.”
But while the prospects are good on the demand side, Sheahan also has a warning for exporters about Gen-Y. “Gen-Y in Australia have never experienced high unemployment, so they have different ideas about loyalty to an employer.
Global companies will have to work hard to attract and keep them. And they do take ethical issues seriously, so triple bottom lines and ethical investing will be a normal part of business life as Gen-Y comes to the fore.”
Gen-Y entrepreneurship is also on the rise as self-employment takes hold in Australia. As well as Sheahan himself, Gen-Yers like Emma Brown, fellow SmartCompany blogger and the self-styled CEO or “Chief Chick” of Business Chicks – a networking organisation for women entrepreneurs – are a sign of the times.
In short, if companies can’t give Gen-Yers what they want, there’s always the option of self-employment in a country where entrepreneurship no longer means just white shoes, gold chains and unorthodox property deals.
As Emma Brown puts it: “Gen-Y women have more opportunities and tools available to them than baby-boomers and Gen-Xers. Entrepreneurship is more prevalent in our age group; it’s aspirational, almost trendy. Most Gen-Y women I meet say to me “I will definitely have my own business in the next few years”. We have access to mentors, government grants, media and information.”
Living with a floating dollar without tariff walls was the great challenge facing the baby-boom generation. Now we all take it for granted that Australia competes globally and the world economy is closely integrated.
For Gen-X, Gen-Y, Gen-Z and the rest, widening and deepening the integration of Australia with the world will be their challenge, while balancing environmental and social needs along the way. In many ways it will be the challenge of the global generation.
*Tim Harcourt is chief economist of the Australian Trade Commission and author of Beyond Our Shores: www.austrade.gov.au/economistscorner
Thanks to genuine Gen-Y entrepreneurs Peter Sheahan and Emma Brown for their comments and assistance.
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