Insights from a behavioural economist on how technology, psychology and new generations are reshaping the way we live, learn, and buy.
Mark McCrindle defines Generation Alpha as the first generation entirely born in the 21st century – between 2010 and 2024 – shaped by technological convergence. This group considers technology not just an integral part of life, but as an extension of themselves.
Seth Godin, along with his co-authors Bruce Clark and Paige NeJame, calls them Generation C, where C stands for COVID, Carbon, and Climate: a generation acutely aware of the consequences these themes have on decisions, investments, and interactions in today’s society.
1. Davide, what do you think of this description in relation to technology access and usage, which are shaped by the digital behaviours of Millennial and Gen Y parents, as well as Gen Z siblings?
I believe Generation Alpha’s parents are, or will be, mostly Millennials, and it feels as if the world is spinning faster than ever before. It’s as though over the past ten years, both human evolution and technological advancement have accelerated exponentially compared to previous decades.
Assuming that new parents are Millennials, I don’t see drastic differences. Let me explain: these generations care about macro themes such as the environment, sustainability, and human rights. I do, however, see a sharper gap when parents belong to Generation X – my generation, by the way.
Part of Gen X is still tied to the myths of career, work, and status symbols. They often use social media casually, for entertainment, and sometimes dysfunctionally. I think this represents a major challenge and a deep disconnect in purpose and meaning when it comes to how different generations approach technology.
Companies are well aware of this. Although parental control systems are highly advanced, I don’t believe they’re enough to grasp the full extent of how these technological interfaces influence behaviour and consumption. Think about augmented reality and the metaverse: they are true extensions of “real” life. That’s why I see great opportunity in rolling out digital re-education programmes – with a stronger emphasis on psychosocial and educational outcomes, rather than just on technical skills for using devices, apps, or software. These are aspects we’ve overlooked in recent years.
2. What role will this “naturalised” access to technology play in purchasing behaviours, particularly through gaming, AI, VR, and AR?
Until a few days ago, I pictured a future where purchases happen while playing online games, like a session of a role-playing game or Fortnite, all integrated. Then I realised: it’s already happening. It really is a fast-moving world! In just a few years, the first members of Generation Alpha will start engaging more directly with brands and will eventually become the main decision-makers, buyers, and consumers.
I believe it will be a truly natural process. Generation Alpha has grown up immersed in technology – a radically different upbringing from their parents and previous generations. These children are the first humans born into a world dominated by smartphones, tablets, and digital devices. They probably can’t even imagine a life without high-tech, hyper-connected toys. Their lifestyle is defined by seamless interaction with technology, apps, and software. As a result, their purchasing behaviours will be a logical and physiological extension of that.
3. Will Generation Alpha buy based on new motivations?
They’ll buy to meet their needs, like everyone else, but they’ll do it differently. They’ll rely on digital tools to learn and play, which will naturally influence how they view and interact with the world around them, including future buying behaviours as adults.
Social networks and family will still have influence, but it will increasingly be social influencers on various digital platforms who shape their choices. For this generation, social media platforms aren’t a “big revolution” as they were for us Gen X or Millennials. They’re simply another way of interacting with reality, a natural communication tool. Like the telephone or television was for us. They’ll buy through new technologies. For instance, I recently read that Moncler has entered the in-game merchandising market, selling items within Fortnite.
I looked into it further and discovered that in many games, you can dress your avatar however you like, even choosing specific brands. I imagine a very near future where I and my avatar in the metaverse wear the same clothes, the same brands, the same accessories.
Brands will have the opportunity to build relationships with a future generation of consumers who can express themselves uniquely – both virtually and in real life.
4) What are the behavioural and psychological challenges of this evolution?
That question makes me happy – thank you for asking it. This brings me back to my core area of work and passion: behavioural economics and cognitive and social psychology.
Let’s start with another impactful fact: Generation Alpha will be the largest generation ever, both numerically and in absolute value. Most of that value will be concentrated in Asia, where the middle class is rapidly expanding. Besides being the largest, Generation Alpha will also have the greatest purchasing power. A 2021 Deloitte study cites academic research showing that children start recognising brands and expressing preferences as early as age three. It’s no surprise that consumer brands are trying to build loyalty early, via the platforms where these children are most active – as mentioned earlier, through video games.
The real challenge will be staying focused on what we might call a “purpose-driven economy” – a system that shouldn’t continue fuelling capitalism’s darker aspects, which I fear it might. Instead, it should strive to serve all social groups and populations across the globe. Behavioural economics and social psychology have much to offer here.
The true psychological, economic, and behavioural challenge – or perhaps more accurately, the social challenge – will be maintaining or pursuing a social balance that we are increasingly losing. Global disparities will intensify, and social mobility will vary depending on geography. One part of the world will enjoy ease and access to technology, while another will struggle.
The challenge will be to equip everyone with the tools to understand a form of “objective” reality – or at least a more accurate version of it. Behavioural economics, particularly the study of “de-biasing” processes (how we can reduce cognitive biases that distort our perception of reality), will be a powerful resource.
We live in a dissonant reality – a world seemingly driven by a social will to reduce bias and help people think more rationally and optimally. Yet, at the same time, we’re surrounded by brands eager to feed those very same biases.
Amidst this social and cognitive dissonance, the real challenge is to protect Generation Alpha from the rising tide of distortion.
My dream? To rebuild a world where the focus shifts from the consumer to the citizen. I dream of an era where the consumer disappears, and the evolved citizen emerges: aware, hyper-connected, and committed to the care of self, others, and the planet.
Interview with Davide Etzi, Work Psy.D., PCC ICF, Psychologist and Behavioural Economist.
Thanks Davide!
Resources & References:
- Marketing 5.0: Technology for Humanity, Philip Kotler, Hermawan Kartajaya, Iwan Setiawan
- Generation Alpha: Understanding Our Children and Helping Them Thrive, Mark McCrindle & Ashley Fell
- Seth Godin’s Blog – https://seths.blog/
