While studying for my exams as a teenager, I can remember the news footage of a relatively elderly-looking man receiving mass adulation in the streets, while smiling broadly and punching the air in jubilation with his wife by his side. That man was Nelson Mandela and his release from prison in February 1990 was one of the world's major turning points when I was growing up. These vivid memories are brought more to life as the great man's passing was announced on the news recently.
Just a few months before Mandela's release, another historical event took place as the Berlin Wall fell. This was a symbolic representation of the end to the long Cold War and it's around this time that the first members of Generation Z were born. These young people will not, of course, remember these events, but they face so many challenges of their own. So many of these challenges are ones we, and previous generations, have unwittingly bequeathed them.
This generation will largely be responsible for confronting the aftermath of the financial crisis, high youth unemployment, the effects of climate change, energy sustainability and security issues, along with a potential demographic time bomb. Yet this is an extremely resourceful generation that is technologically astute beyond belief and can create virtual communities at lightning speed.
Generations aligned; worlds apart
It's surprising that, when Swiss Re carried out its risk perception survey recently, generations were largely aligned in their views on risk. When we asked them what they saw as the two biggest risks facing their country today, only two areas show any particular generational trend: The young are more concerned than the old about crime, terrorism and civil unrest and the older generation is more concerned about the financial impact of an ageing society.
Under current models, Generation Z will shoulder most of the burden for many countries' older populations -- especially in the so-called developed world. Here they may have to pay for some of the current generation's retirement as well as their own, if they can ever afford to stop working. Yet in many emerging markets the challenge differs in that the issue is the rapid rate at which ageing is taking place.
While it took France 115 years for its population over 65 to double from seven percent to 14 percent, it will take Brazil, South Korea and Singapore about 20 years for the same change to take place. The challenge here will not be to deal with the legacy of the past, but to put the appropriate systems in place to ensure that Generation Z doesn't have to bear all of the financial consequences.
High growth markets have the advantage of a rising middle class and increasing prosperity. Fast growth brings with it great uncertainty and younger generations are well placed to adapt from traditional to high-tech societies quickly. But for already aged societies, the costs of education rising and high unemployment rates threaten to create disadvantage for the longer-term life course of the young.
Individual, insurance and institutions
The high costs to the individual will make it difficult for younger people to save, although they are prepared to do so. Swiss Re's risk perception survey suggests that 32 percent in the 15 to 29-year-old age group, across 19 markets, would be willing to save more for a financially secure retirement. 26 percent of 45 to 59-year-olds say they would take this action when asked to select only one of a list of options. As people get nearer to retirement, they are more willing to accept a lower standard of living (27 percent) than younger people (18 percent).
Both Generation Z and the Baby Boomers would take personal responsibility for their retirement costs, but it's the younger generation who is most willing to save. With all these personal costs, the risk of becoming heavily in debt can never be far away and this is where insurance can help. The risk of not working due to sickness, the risk of becoming unemployed and the risk of running out of money in retirement are all areas where insurance has created solutions in the past.
Insurers have a clear role to play in engaging a technologically astute generation early on and adapting to emerging needs. Governments and other interested institutions can help by pushing the issues of younger people further up their agenda and progressing sustainable public-private solutions for the older generations of today and tomorrow. Generation Z needs an all-important education, job opportunities and involvement in the political process to create their path to success.
The long walk
Last year, the World Economic Forum launched a report on developing future protection systems in retirement income. The report emphasized that making small changes today will create rewards for the future.
There are things that Generation Z has on its side, including a little more time, a determination to change and question the status quo, along with a growing amount of support among older generations. The youngest 'Z' will have been born in 2000 and no doubt they will have witnessed the passing of Mr. Mandela with intrigue and the knowledge that brave people can change their destiny.
This post is part of a series produced by The Huffington Post and The World Economic Forum to mark the Forum's Annual Meeting 2014 (in Davos-Klosters, Switzerland, Jan. 22-25). The Forum's Strategic Partner community comprises a select group of leading global companies representing diverse regions and industries that have been selected for their alignment with the Forum's commitment to improving the state of the world. Read all the posts in the series here.