Do we really understand what happens when a technology or its users or its providers moves from one generation to the next? How can such a commonplace term be left so ill-defined? 

First some words of warning: don’t read this if you are busy or important. It’s just 2,000 words or so of prattling verbiage on how and why people of certain ages buy certain services in certain ways. Or how, in technology terms, each new generation begins with the presumption that it is better than the last. And how the organisations that develop and supply new technologies and services are often generationally ‘out of step’ with their products and their customers.

A further caveat if you’ve ended up here: this is one of those articles that starts from a point of obscurity, meanders around for a while, and finishes up nowhere in particular. True, occasionally it will whizz along on the back of some novel observations, but overall it’s quite pedestrian and unremarkable. Many people would be best advised to click here to return to the homepage and get on with their busy and pragmatic lives.

Right, now that we’ve hopefully cleared out the inhabitants in the shallow-end of the thinking pool, let’s see if the rest of us can get on with it.

Label of love
For our purposes, we can pinpoint three inter-connected spheres in which generations are at work
• technology: new developments in areas such as wireless or semiconductors or networks move along in a series of new ‘generations’. This is significant in that (firstly) it is commonly dictated by Moore’s Law and (secondly) it has become a core element of the vocabulary of industry ‘newspeak’: we don’t talk of ‘new’ products or networks, we speak of ‘next generation’ products or networks. The latter have even been granted the ultimate newspeak accolade of their own dedicated acronym, NGNs.
• users: consumer trends involving the take-up of new technologies also adhere to generational forces. These may mirror Moore’s Law in some cases but also need to be retrofitted onto previous generations of users in the same or other scenarios. In the mobile telephony field, for instance, the minimum age of ownership has fallen but has created issues in terms of that market’s overall spending power vis à vis new services; it has simultaneously highlighted the ability of older generations of consumers to adopt the new technologies involved.
• suppliers: equipment vendors, software developers and service providers are in a constant state of flux between the opportunities presented by new generations of technology and the demands placed upon them by new generations of consumer. The point that such institutions often miss is that they too must adapt to changes, perhaps as rapidly if not more rapidly than their products and markets have done. Any failure to do this is likely to lead to new entrants usurping their natural territory: think no further than the introduction of VoIP versus PSTN telephony as an example of this.

The generational characteristics of these three spheres are in turn technological, sociological and organisational in composition. The point of this article is to examine whether they can be made to mesh in step together, and what happens when they cannot. It also asks how we can talk so glibly about ‘generational change’ when we can’t even say how long a generation lasts?

1G, 2G, 3G, rock!
When it comes to technology, it is tempting to ask whether we are dealing with ‘evolution’ or ‘intelligent design’. To the dismay of those who hold the latter opinion when applied to other matters one could think of, technology evolution appears to be a mixture of Darwin and Moore: intelligent design would never have allowed WAP or even 2B+D ISDN to be brought to market, for instance.

Clearly, applying Moore’s Law to humankind, even allowing for wobbles from one generation to the next, we would be looking at 20 new generations to have emerged since Gordon E. Moore first posited his theory in 1965. That would mean that the average age of conception was down around the two-year mark. We’ll leave that unsavoury notion to one side for now although return to it in its strictly human context in a few minutes.

Technology gives us the contradiction of straight-line development on the one hand which, once bent through the evolutionary prism of Moore’s Law, turns exponental. Not always, of course.

There are those who question the adherence of successive evolutions of mobile technology – first, second and third generation, the sequence itself a sign of the powerful lure of the ‘generation nomenclature’ game – to such rules. In particular, the transition from 2G to 3G was disputed by external forces that neither Darwin nor Moore would/could have factored into their calculations.

This led to the creation of what were effectively mutant evolutionary spurs – 2.25G, 2.5G, 2.75G – and questions from 3G’s critics or rivals as to whether it even constituted a new ‘generation’ at all. Many governments compounded these difficulties in the late 1990s by seeking to impose ‘a tax on the first born’ when it came to 3G through billion-dollar licensing regimes.

The result was that the gap between 1G and 2G was actually shorter than the real gap between 2G and what passes today for 3G. Where does that leave Moore’s Law? Or Darwin’s?

Here comes the flood
The effect of generational change and the fluidity with which it applies in today’s ICT market is nowhere clearer than in the take-up of new services. Consumerism – which is what is being discussed here, after all – has always ebbed and flowed within the flux of different generations. Just as products and technologies evolve in a generational format, so do the users of them.

In the era when telecom provision was a matter of utility – and those days are less far-distant than you would think – adults and businesses procured products and services (from a limited range) based largely on necessity and an ability to pay. In those days the cost of owning/using the telephone and the resultant impact that these constraints had on usage volumes were pretty constant. It had lasted for generations in which a ringing of the telephone was second only to the arrival of a telegram as a harbinger of ‘bad news’.

That state of domestic affairs had already eroded before the advent of the mobile telephone and later the launch of its pre-paid service packages. Combined, these unleashed a new market by moving beyond established and creditworthy adults (identical to fixed-line owners) to the young. Pre-pay allowed expenditure to be placed under a semblance of control and created a market in which 16-year olds were deemed capable of owning a mobile. In ten years that figure has probably come down to include eight-year olds, which probably ‘out-Moores’ Moore’s Law.

That implies an acceleration of the generational pace of change that defined the utility era. A glance at mass market advertising for mobile telephones shows that this market is at the heart of the industry’s vision, balanced only by the true business users that in ARPU terms make up for the numbers of the more cost-sensitive youth market. Other mass market characteristics – think fashion or running shoes – determine that style-conscious users must change products (in this case mobile handsets with more and more functionality) every 12 months or so. The cellphone industry can tolerate this: they are SACs machines, after all.

Age and inexperience
But they are gambling heavily on two generation-related issues.

The first is that much-coddled younger customers can eventually be traduced into card-carrying contract-bearing subscribers at some point in the future. Such thinking used to lead banks into offering favourable overdraft terms to students in the expectation that once they had graduated and started earning real money, they would stay loyal. At that time there was little to choose the banks; it’s hard to say if the same will apply to the increasingly bitter rivals of the mobile services sectors in five years time.

The second more surprising generational gamble is that late-adopters can not be wooed to the uptake of new services. Older subscribers of my acquaintance are indeed cautious when thinking of mobile phone usage for voice and left perplexed when matters such as text come up. Nor do 3G add-on services mean much to them.

The converse applies in fixed broadband. Mention a 28K modem to an under-21 and they will look away with the same generational embarrassment that would have accompanied any use of the term ‘steam radio’. Yet it’s the householders – typically the mature and even older – who both want and can afford broadband access.

And here (consider the resurrection of utility) they expect the service and can pay for it. Likewise, temporarily homed youngsters or those frequenting Internet cafés are accustomed to Internet services at high-speed without too much thought as to what these might cost in later years. Given the generational timescales involved, that sounds like the rough landscaping of a new battleground between 3G/Wi-Fi players and broadband operators.

How is that for a jumble of generations? Youthful users, accustomed to paying little or nothing but demanding ever more services and bandwidth. Older users, able and willing to pay for higher bandwidth but not too interested in the majority of new services contained in the phalanx of broadband connectivity applications.

Goalposts shifting
In a nutshell this is the challenge that faces ICT suppliers of goods and services. So ossified and stuck in the corporate equivalent of primogeniture are these entities that it is almost impossible to see a way out.

Whenever these behemoths are forced to learn new disciplines relating to new services and revenue streams they resort to the word ‘convergence’, but not before they have squawked about ‘generational change’. It’s a myth designed to woo shareholders. When corporate execs are less than convincing in their annunciation of these soundbites, they get fired.

PTOs and major ICT developers simultaneously frame or covet the latest technology while being engaged in a constant struggle to catch up with it. Their generational trends – measured in decades or multiples thereof when it comes to smooth leadership  – might stretch into an infinite future.

Technology changes in light-seconds. The market for ICT products and services flickers back and forth. Suppliers stick to notions of continuity (and its sexier substrands, such as scalability) or reliability and stability.

As with the example cited above, this means that a PSTN voice operator sees VoIP as a threat. It means that over-priced mobile services can be regarded as and controlled by a PTO-linked cellular operator, rather than constituting a threat.

Yet those threats – alternatively posed by technology and the market – cannot be smothered or suppressed. As future generations will doubtless find out.
Jim Chalmers

In the second part of this article, we ask whether gender is more important than generation in today’s market.