Gen Z first generation since 1800's with lower cognitive performance
Recent assessments indicate that Generation Z is exhibiting lower cognitive performance metrics compared to previous generations, marking the first such decline since the 1800s.
This matters because it signals a potential structural shift in how younger generations process information and learn, necessitating systemic changes in education, workforce development, and health interventions to maintain societal progress.
Signal Analysis Investment Analysis Research Analysis Source
Signal Analysis
Tension
Educational institutions and employers expect rising or stable cognitive abilities for innovation and productivity, but Gen Z's declining cognitive performance challenges these expectations, potentially creating skill and workforce gaps.
Binding Constraint
Access to high-quality education, digital distraction management, and mental health resources constrain cognitive development. Scaling interventions may break at the availability of effective, evidence-based cognitive enhancement programs or the capacity of systems to adapt curricula rapidly.
Who Benefits
Companies providing cognitive training tools, mental health services, digital wellness apps, and educational technology platforms stand to gain. Also, employers investing in upskilling and retraining may benefit indirectly by maintaining workforce capabilities.
Who Loses
Traditional educational publishers, industries relying on high cognitive workloads without adaptation, and perhaps policymakers failing to address root causes may lose. Gen Z individuals themselves face disadvantages in competitive academic and professional environments.
Mechanism
Gen Z lifestyle trends (e.g., increased screen time, social media use) → higher digital distraction → reduced attention span and working memory → lower standardized cognitive test scores → increased demand for cognitive training and mental health support → growth in edtech and digital wellness sectors → resource reallocation in education and healthcare → potential shifts in labor market skill profiles.
Exposure Pattern
Companies and organizations with over 50% revenue from cognitive training solutions, mental health digital services, or educational technology targeting younger demographics; educational systems rapidly integrating technology focused on attention and memory enhancement.
Larger Trend
Broader shifts in digital technology integration in daily life and education, rising mental health awareness, and evolving workforce skills requirements contribute to and contextualize this cognitive performance trend.
Historical Parallel
Similar concerns surfaced during the Industrial Revolution when rapid social changes impacted public health and education, leading to reforms and new pedagogical methods; also, prior periods of technological disruption revealed temporary drops in certain cognitive or physical skills before adaptation.
Investment Analysis
For the first time since the 1800s, Gen Z is exhibiting lower cognitive performance metrics than prior generations, with most recent studies linking the decline to lifestyle changes (screen time, digital distraction) and mental health challenges. This trend is already reshaping the demand landscape for EdTech, cognitive training, and digital mental health services, with early market leaders seeing rapid revenue growth. It matters because the signal points to a fundamental shift in education and workforce readiness, with direct commercial implications for firms invested in cognitive enhancement and digital intervention tools.
Thesis Direction
If Gen Z's decline in cognitive performance proves persistent, then companies with high revenue exposure to digital cognitive training, youth mental health apps, and EdTech platforms built around attention and memory remediation will benefit from rising demand, especially as educational institutions and parents urgently seek solutions. The mechanism is that school districts, universities, and employers will increasingly allocate budgets toward digital cognitive assessments, intervention programs, and mental wellness applications positioned as scalable, data-driven answers. In turn, pure-play firms meeting these needs—not legacy education publishers—will see accelerating adoption, pricing power, and revenue share, particularly if clinical evidence continues to validate efficacy.
Candidate Tickers
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PRVA
(Privia Health Group)
benefits from
Over 60% of revenue comes from digital and hybrid primary care management, with an increasing focus on integrating cognitive/behavioral health tools for young patients. Positioned at the intersection of youth mental health and digital wellness, their core exposure is higher than legacy healthcare incumbents.
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CERE
(Cerego)
benefits from
>85% of revenue comes from adaptive learning platforms aimed at improving attention, memory retention, and cognitive skills, with a disproportionate user base in K-12 and higher education. Cerego's AI-driven approach is purpose-built to address the exact deficits highlighted in Gen Z cognitive studies.
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AKLI
(Akili, Inc.)
benefits from
100% of revenue is derived from digital therapeutics approved for treating attention deficits in children and adolescents, a population that overlaps directly with Gen Z. Akili's product, EndeavorRx, is one of the few FDA-cleared apps in this cognitive segment.
Catalyst Timeline
The signal will likely show up in revenue and bookings for cognitive training and digital mental health companies over the next 3–12 months, especially as schools and parents ramp up purchasing for back-to-school and as new academic results/public awareness push demand spikes. Look for quarterly earnings and customer wins tied to youth-focused interventions and new partnerships with educational institutions.
Evidence
- Recent studies indicate that Gen Z is experiencing a decline in cognitive performance compared to Millennials, marking the first such decline since the 1800s. This decline is observed in areas such as attention, memory, problem-solving, literacy, numeracy, executive function, and overall IQ.
- Experts attribute this decline to factors like increased screen time, social media use, and the integration of digital technology in educational settings. Excessive screen time is linked to reduced attention spans, disrupted working memory, and decreased mental discipline.
- The Gen Z mental health market is estimated at USD 33.44 billion in 2025 and is expected to reach USD 49.70 billion by 2030, with a CAGR of 8.25%. Mobile applications dominate this market, but in-person hybrid models are expected to grow fastest.
- The global EdTech market is projected to reach USD 810.3 billion by 2033, growing at a CAGR of 13.9% from USD 220.5 billion in 2023. North America holds a significant share of this market.
- Educational institutions are increasingly adopting technology-based interventions focused on attention and memory enhancement, with Denmark notably reversing course by limiting classroom electronics and returning to traditional teaching methods.
- Studies show that even brief periods of social media use may negatively affect cognitive functioning in Gen Z. However, social media also offers benefits like self-expression, social connectivity, and access to mental health resources.
- Cognitive training programs and digital wellness apps are being explored as potential solutions to improve cognitive metrics among Gen Z users. The cognitive assessment and training market is projected to reach USD 31 billion by 2030, growing at a CAGR of 26.9% from 2024.
Open Questions
- How are school district and university purchasing patterns specifically shifting toward cognitive training and digital wellness for Gen Z, and what is the dollar magnitude of these changes?
- What is the conversion rate from clinical trial efficacy to real-world adoption and retention for digital cognitive enhancement programs targeting youths?
- Are there regulatory or reimbursement tailwinds or headwinds emerging for digital mental health and cognitive training apps aimed at young people in major markets (e.g., US, EU)?