The joy of non-ownership!

Research has shown that the millennial generation, people who are between 22 and 37 years old, rarely buy houses these days and even more rarely cars, especially in large cities any where in the world

There was a time not so long ago when asset ownership was everything. I remember starting my career in the city of Nashik as a Management Trainee in Crompton Greaves in the eighties, getting married and being obsessed with the need to buy our own apartment, however small and have our own transport however basic. When I tell this story in colleges today and talk about my first purchases, a 500 square feet suburban apartment and a second hand Lambretta scooter, hands shoot up and ask “But why would you want that?”

Research has shown that the millennial generation, people who are between 22 and 37 years old, rarely buy houses these days and even more rarely cars, especially in large cities anywhere in the world. The pursuit of expensive assets has all but disappeared and in countries like the USA, people under 35 are increasingly being called “the generation of renters.” The youth don’t want to invest in fixed assets, they would prefer to invest in experiences – travel, health, sports, food and just life!

The values of youth are very different from the previous generations. The flexibility of schedules, financial and geographic independence is the priority. Young people no longer have allegiance to company brands or even managers, they would prefer to change their jobs at least every three years to gain more experiences and faster career advancement. And see the world and have multiple holidays every year with payments through as many credit cards as possible.

There are also psychological reasons why asset ownership is becoming so abhorrent in these times. In earlier generations, the need to buy a home to put the proverbial roof over the heads of a young family was almost the first goal of a primary provider. Today with houses and all real estate providing very limited rental returns and poor appreciation in comparison to more liquid investments, for a young person with a propensity to travel and see the world, being tied down by an immovable depreciating asset is the last appendage needed. And with good education and marketing skills, there is no need whatsoever to worry about security. A new job is always around the corner and the ease of finding rental accommodation and almost all other assets on rent will surely be the bigger preference.

Another important consideration which most elders in a family do not recognize is the increasingly social nature of professionals. There was a book that an inveterate traveler wrote a few years ago titled “in search of the perfect profile pic” which aptly illustrates the real aspirations of today’s generation. There is an implicit need in young people to have something new to post on multiple social media groups and have something interesting to talk about on chats and at parties. As we used to joke in my previous organization about one of our company veterans, “what do even write beyond the first para in your resume?” Similarly, a young person feels that her friends will lose interest in her if he does not have new experiences to share-new places to stay, new cars to drive on a weekend, new places from which to do Facebook posts. Do you get the trend?

The pursuit of expensive assets has disappeared and in countries like the USA, people under 35 are increasingly being called “the generation of renters”

One more possibly subliminal influencer of this trend is also the definitive shift in corporate buying from CAPEX to OPEX. With cloud computing becoming mainstream, its software as a service, infrastructure as a service and platforms as a service and providers like Amazon, Microsoft and Google have offerings that make it almost ridiculous to own anything at all except your data. In India, even people ownership is becoming an unattractive proposition with external pressures like somewhat restrictive labour laws and internal preferences for contract labour and project manpower recruited when needed and off-hired when the project is done finding favour with many organizations. The good news here is that this corporate preference finds resonance with individuals who have no interest in 50-hour work weeks and are active participants in the “Gig” economy.

What could be the logical extensions of these trends. I was sitting at a World Economic Forum discussion on the future of jobs three years ago and a French businessman sitting next to me was very surprised at the amount of emotion being showed by speakers on the panel. When I explained to him that finding full-time jobs with 40 to 50 hours of work every week in the formal economy was a very real challenge for millions of graduating students in the country, his response was “that is laughable in my country” Nobody would really want to work more than half that time every week.” This will be the motivator for the Gen Y and Gen Z job entrants as they look for work-life balance and the opportunity to live life to the fullest.

One concern, as we are seeing in various parts of the Western world, will this aversion to commitment and ownership eventually find its way to the family formation as well? Will marriages become anachronisms and even relationships become more short-term than lifelong commitments. Many of us writers and readers of columns like this may hope not but I can already see many of the young folk in our organization agreeing vehemently with this thought!