Generational expert expects tumultuous times
Expect a tumultuous period for the world in the coming years because the rhythm of history is destined to repeat itself.
That was the message that delegates at a life insurance conference heard yesterday from keynote speaker Neil Howe, an authority on generations and social change.
Mr Howe gave a captivating presentation highlighting the differences between generations, pointing to reasons why values and aspirations of cohorts born in different eras tend to vary.
Speaking at the Bermuda International Long-Term Insurers and Reinsurers annual conference, Mr Howe reflected on the generations born in America over the past 120 years.
He started with the GI generation, who fought in the Second World War and built great infrastructure and strong institutions. He followed on with summaries of the succeeding silent generation, boomers, generation X and millennials.
For the life insurance professionals in the record turnout of around 330 delegates for the fifth Biltir conference, perhaps the most pertinent part of the presentation was the forward-looking segment.
Mr Howe and coauthor William Strauss wrote The Fourth Turning, a book which lays out their theory of a recurring generational cycle in which generational personas unleash a new era, or turning, in which a new political climate exists.
The “high” in the two decades after the Second World War, a time of great post-crisis social order, was followed by an “awakening”, or consciousness revolution, between 1964 and 1984 when people tired of conformity and individualism thrived. Then came the “unravelling” between 1984 and 2008, when individualism was king and trust in institutions waned. Under the cycle proposed by the theory, we are now ten years into the “crisis” era, a period of creative destruction.
“Looking back through history, we can see we had these great cataclysms about the length of a human life apart,” Mr Howe said. “And roughly halfway in-between them we have these great awakenings. So we redefine the outer world of the economy, politics and civic life, and then, roughly in-between, we redefine the inner world of values, culture, music and religion.
“That is hugely tied to a rhythm we see with the generations themselves.”
He said there were parallels between today and the 1930s, an era of economic hardship and growing populism.
He expects more turbulence ahead and pointed to several generational trends to look out for.
One was demographic, with many economies on course to see shrinking working-age populations, at the same time as they face huge unfunded liabilities for pensions and social welfare programmes.
“People don’t seem to understand that we’ll never again see the same growth in the working-age population as we’ve had in the last five years,” Mr Howe said. “Growth could be less than zero. People are not paying attention to this, or its implications for GDP growth.
“It’s not just in the US. Large areas of the world are going negative in terms of workforce growth in the next 30 years.”
Another trend was lack of productivity growth and a lack of improvement in the standard of living.
He cited surveys showing ebbing confidence of young people in liberal democracy, with millennials the most likely to be dissatisfied with the democratic system. This could only fuel the global spread of authoritarian leaders, he said.
Mr Howe said we are now “in the winter of the cycle”.
“To get to the next golden age, we will have to go through a struggle,” he said, adding that the struggle could be economic, political or military in nature.
Joe Jordan, an inspirational speaker and behavioural finance expert who wrote the book Living a Life of Significance, also spoke at the conference.
He talked about how the ongoing retirement of the boomer generation is bringing unprecedented economic and social changes to many countries. Many of them are unprepared for retirement and face considerable uncertainty around the future levels of government-sponsored retirement programmes.
Mr Jordan argued that the life insurance industry alone can meet this challenge with proven solutions.
There were also sessions on energy economics and the emergence of insurance-linked securities in the life insurance and reinsurance sector, as well as regulatory update from the Bermuda Monetary Authority.
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