(FORTUNE Magazine) – In my spare time, I am an elected borough councilman in a tiny town near the Jersey shore, where recently the townsfolk debated whether we should build a skateboard park near the local soccer fields. One evening the predictable throng of adults stood before the council noisily explaining why this was a good idea or a bad one. Then a dozen or so children--all boys about 11 or 12--said they wanted to speak. We figured they would shuffle up to the microphone, eyes glued to the floor, mumble self-consciously that skateboarding is fun, and scurry embarrassedly back to their seats.

But that's not what happened. The boys were poised and well prepared. They countered nearly every argument against the park with intelligent talk of fundraising methods, special low-noise asphalt, and the dangers of skateboarding in the street. Their best moment came after a grownup grumbled that the rink would be a waste of Fair Haven's park space, accommodating only 50 or 60 children at a time. Griffen Wallman, an eighth-grader, strode to the microphone. "That's not really fair," he said. "You adults have tennis courts that take up just as much space. Only two people use them at a time. The skateboard park will be a better use of space."

Hey, boomers and Xers: Hold on to your baseball caps. There is a new generation upon us, the oldest barely out of high school, the youngest not yet born. They're not just any crop of youngsters, either. These are our own little heirs and scions: brilliant, gorgeous, practically perfect. You can brag all you want that they're chips off the old block, but they are not. They may have been smitten by Furbys and American Girl dolls and 'N Sync the same way the boomers took to coonskin caps, Barbie, and the Beatles. But they were weaned on everything from the Internet and prosperity to academic pressure cookers, Columbine, working moms, and high divorce rates. They are fundamentally different in outlook and ambition from any group of kids in the past 50 to 60 years. The differences between us and them are not insignificant or academic, because the wave that is approaching is very big, nearly as big as the baby-boom generation. It is clear from talking to them that they already know they don't want to live or work the way we do.

Predicting how the next generation will turn out is a perennially discomfiting exercise. Any boomer over a certain age can remember articles decades ago in Time and Newsweek, written by some fatuous navel gazer, purporting to plumb our aspirations and morals, or to decode that hip, new lingo used by "teens today." What on earth, we teens wondered, were those idiots smoking? Even our own predictions about ourselves proved amazingly inept. Weren't we boomers going to live on communes, chant mantras for world harmony, and never work as hard as our fathers? So how come Rennie Davis of the Chicago Seven wound up selling insurance, and what made us forswear tofu for BMWs?

Caveats aside, this generational stuff is too important to ignore. It affects work, family, government, the economy. It might even affect your 401(k). So for three months FORTUNE, along with Youth Intelligence, a company that specializes in youth marketing, and Towers Perrin, which consults with corporations on human resource issues, conducted interviews and focus groups with more than 220 teens--mostly high school kids--in 12 cities in nine states. We asked about their career plans, social concerns, and anxieties; about their attitudes toward money, their relationships with friends and family, and their expectations for the future.

In the beginning, the process felt clumsy and about as scientific as reading tea leaves. The kids love money. They disdain money. They want challenging careers. They want a grass hut on a desert island. The kids at Rumson-Fair Haven High in New Jersey hijacked the conversation and kept talking about parenting and family life when there were more important topics to get to. The dots weren't connecting. But ever so slowly, as researchers came back and compared notes, a surprisingly consistent picture began to form, like that LIFE magazine cover where all the tiny photographs really do create an image of Marilyn Monroe when viewed from afar.

For sure, the next generation will be big--upwards of 70 million--rivaling the 76 million post-war boomers and dwarfing the mere 41 million Generation Xers sandwiched in between. The first of them were born in the early 1980s; the last will arrive in the next few years. They have been unimaginatively labeled "Generation Y," "Generation Why," and "Generation Next," as though they were some mere subset or extension of Generation X, the crowd that came of age, moody and disillusioned, in the early 1980s. But the new kids show signs of being qualitatively different from the Xers. So for now, call them Millennials, as some people already do. A better name will come along when they have their watershed moments--their Pearl Harbors or Woodstocks.

If history is any guide here, and it probably is, the Millennials will push the boomers aside before long. Scholarly research on the evolution of generations points to an upheaval every 44 years or so, as a spiritually and culturally focused generation is displaced by a practical and pragmatic one. That would spell the end of hippie/ boomer/yuppiedom's 40-year self-absorbed grip on the American psyche.

If the crystal ball is properly tuned, boomers will be supplanted by a noticeably more generous, practical, and civic-minded group. The Millennials' ability to organize and mobilize is hinted at by those young skateboarders, and their skills will only get better. (It turns out that kids have Websites to instruct one another on how to lobby for skateboard parks: "Approach the local police and shopkeepers for support....Find an adult who might be willing to help....")

You might expect this new group of kids to be a bunch of techno-brats--as wowed by the Internet as boomers are, as obsessed with making dot-com fortunes as the Gen Xers are, and generally spoiled and self-centered from a lifetime of pampering by parents made rich in the Roaring '90s. You would be wrong. The Millennial teenager appears warm, confident, and upbeat, with little of the moral superiority that characterized the antiestablishment types of the 1960s. They are optimistic about finding good jobs but don't act as if they were entitled to them. Virtually all the kids--from Harlem and the South Bronx to Beverly Hills and the North Shore of Long Island--want to be well educated and know they will have to work hard to succeed. "I'll reach my goals," says Linnita, an aspiring pediatrician who just graduated from Washington and Lee High School in Arlington, Va. "But it's gonna kick my butt."

In fact, the overwhelming perception gotten from talking to these kids is that they are under severe stress, often from boomer parents desperate to raise trophy kids with perfect grades, drop-dead resumes, and early admission to Harvard. Having a 4.0 average and being president of the debate club doesn't count for much anymore. These kids take AP courses to nudge their transcript beyond perfect, arrange "public service" projects in Fiji to enhance their college resumes, and spend a fortune on SAT tutoring. Says Helen, a student at Beverly Hills High: "I just want to get through being a teenager." At another point she wonders, "Is there anything teens can do to relieve stress that isn't illegal?"

Chris, a senior at Miramonte High in Orinda, Calif., was accepted at Harvard this year but says he is "so burned out by the school culture" that he is taking a year off to study creative writing in Japan. He resents, too, all the attention that adults give him for getting into an Ivy League school. "That's all anybody cares about. It's like everything else about who I am and what I've done flew out the window, and now I've just got the word 'Harvard' tattooed on my forehead."

The kids are exhausted. Linnita in Arlington talks of taking caffeine pills and staying up until 5 A.M. to complete her work. Adam, her classmate at Washington and Lee, wishes "for just one 60-hour day so I can catch up." Adam also says he is tempted to wear a sign for grownups that says DON'T ASK ME ABOUT COLLEGE.

Even choosing a career causes stress. These teens recognize that there are millions of hypereducated kids competing for every job. D.J., a Washington and Lee graduate, is struggling to resist pressure from his parents. "They want me to be a doctor. They say I'll have more money. I want to be a teacher. I think that will make me happy." Frank, newly graduated from Rumson-Fair Haven High School: "I'm anxious about the future. Everything seems so specialized. When my parents went to college, they had broad degrees. That doesn't cut it now. You have to know so early what you want to do. What if you make the wrong decision?"

And yet for all their worry about college and careers, they don't want to be consumed with work the way the boomers have been. They show scant interest in climbing ladders. They disdain office cubicles. They see no prestige in corner offices. Nor are they impressed by what inspires Gen Xers. A few said they'd like to start a dot-com company, but most seem turned off by the obsessiveness and hideous hours required of Silicon Valley millionaires. Others think the megabuck entrepreneurial opportunities will be gone by the time they graduate from college. Only one or two mention Bill Gates as a hero.

The entrepreneurial life seems least glamorous to kids at its epicenter. In Orinda, a prosperous suburb near San Francisco, children talk of adults burned out by long hours, tedium, and overpriced housing. "My uncle lives here," says a student at Miramonte High, "but the commute to Silicon Valley is so bad that he drives an RV to the Valley on Mondays, lives in it all week, and comes back Friday night."

The Millennials will have none of that, says Margaret Regan, a consultant with Towers Perrin who was involved in this project. "Like the Gen Xers, these kids will decide what kind of lifestyle they want first, and then go looking for the jobs or careers that will accommodate the lifestyle." Regan, who has studied characteristics of the work force for years, predicts that barely one-third of the Millennials will take steady staff jobs with companies. Most will freelance by signing on to projects, working very hard for a few months, and then taking time off to pursue other interests before starting again.

And what could possibly replace the Gen Xer's delight in working nights and weekends to take a startup public? Family and friends, it turns out, are paramount for the Millennials. A consistent--and surprising--theme that surfaces again and again among these kids is the importance of establishing a warm, loving family life for them and their children. "Being a good mom." "Being a dad available to his kids." "Family dinners." "Never putting my kids through the agony of a divorce."

Ask kids about the exciting opportunities of the Internet, and they shrug. Ask them about money, and they say, yeah, money is cool, but not to buy a Porsche and not to impress. Money is valued because it improves family life. At Rumson-Fair Haven, Stephen says, "My only financial goal is to put my kids through college. I worry how much I'll have to make." Says Adam from Washington and Lee: "I would work at a boring job if I could come home to something satisfying."

If the economic boom of the '90s has had an impact on these kids, it is this, and it's a stunner. They seem to assume that jobs and money will be available as needed, which will allow them to indulge in a luxury that few of their parents could, or would: When they are married with a family, one of the parents will be able to stay home and raise the children. It's an overstatement to say that all the teens feel that way. Lots of girls say they want satisfying jobs, and they see a conflict looming between work and family. Other girls do not want to be economically dependent on their husbands or say they saw their own mothers financially ruined by divorce. Others defend day care. "I grew up in day care at the YMCA," says a girl at Pascagoula High in Mississippi. "I turned out okay. I've never done drugs." But most insist that their families will always be more important than money and careers. "I am not accepting the loss of the 1950s-style family," declares Garreth, a Pascagoula High senior.

What about the girls eager to grow up to something more than diaper changing and car pooling? The Millennials' solution to the who-stays-home dilemma sounds like a grand compromise. Many kids--boys and girls--seem content to let Dad stay home, or at least to take turns with Mom. "I'll stay home with the kids. I don't have any problem with that," declares Rolf, a graduating senior at Rumson. No one in the room seems inclined to tease him for that, but perhaps that's because 6-foot-5 Rolf was the state's leading defensive end in high school and has a football scholarship awaiting him at Northwestern. Garreth, in Mississippi, is even more emphatic: "I call for one parent to stay home. No matter what. One of us will be home for the kids."

Yes, the teens' remarks about family life are a rebuke to boomers and Xers for their obsession with work, for parking their children in day care or with nannies, and for too many divorces. One kid at Miramonte is quietly bitter: "My parents divorced. My dad's a workaholic. He's very successful, but it's a loss for me and my brothers. It's at the expense of us," he says. "I want to put emphasis on family."

On the other hand, when parents have been deeply involved, their kids are quick to acknowledge it. "My mom" and "my dad" come up more than anyone else when we ask the children to name their heroes. ("It's hard to find public heroes," complains Courtney, a graduate of Cold Spring Harbor High on Long Island. "The media just pulls heroes apart.") Inevitably, the kids rail at their parents for being too suspicious or controlling. Boy in Virginia: "My dad is so closed-minded. He lectures to me. He thinks he's the smartest man in the world." Girl in California: "I go to a friend's house, come home, and my mom checks my eyes to see if I'm smoking weed. She thinks I'm having sex with everybody." But they can instantly change their tune. Asked why he names his father as his hero after denouncing his overprotectiveness, Alvin at Lehman High in the South Bronx declares: "My father was there for me. He got me my first job. He helped me learn boxing."

Second only to their hunger for motherhood and apple pie, the most striking thing about Millennial teens is the extraordinarily close bonds they have developed with their friends. Friends have been important in every generation, of course, but the depth of feeling these kids express when talking about their pals is downright moving at times. "Talking to friends is such a luxury," says Ryan at Washington and Lee. "They bring us a special glow. It's such a pleasure to have friends." Guys, big brawny ones, playfully hug each other in some groups.

Jane Buckingham, head of Youth Intelligence in New York and the leader of two focus groups FORTUNE sponsored in Los Angeles, says the Millennials' strong friendships put them in sharp contrast to the Gen Xers, whose disillusionment with stagnant careers has turned many of them into loner, suffering, poet-at-the-picnic types. The difference is already showing up in advertising. "Ads aimed at Gen Xers show them living solitary, miserable-but-interesting lives," says Buckingham. "That approach doesn't work with the next generation. Belonging to a group is so important that I caution anyone advertising to this generation against putting a lone individual in an ad."

Hollywood has gotten the message too. Doug Petrie, a writer for the popular teen TV show Buffy the Vampire Slayer, says there is a conscious effort to show Buffy with a loyal, tight-knit group that helps her battle demons. "This generation is grappling with the issue of connectedness," says Petrie. "There's nothing singular to latch on to. The Internet, despite all these kids logging on, isn't enough. They're desperate for connection and don't find it in cold cyberspace. The show is popular because kids would love to have four warm bodies that would fight and die for one another."

The ironic detachment that seemed to work for TV shows geared to Gen Xers doesn't work with the newest crop of kids, says Petrie. "Ten years ago the catch phrase was 'whatever,' meaning 'who cares.' But Buffy won't say 'whatever.' These are people who care passionately about each other." Adults as rescuers are deliberately excluded from Buffy too. "Kids feel that grownups can't help them," says Petrie. "Thirty years ago this show would have been called Father Knows Vampires Best. But not now."

The kids cling to each other because parents and role models are in short supply. Ronald L. Stevens, who just retired as the principal at Rumson-Fair Haven High, worries that "teens are often raising each other." In the past, Stevens notes, even children in dysfunctional families could often find a surrogate mother at a neighbor's house, but with moms on the job, that Band-Aid is gone. In the absence of parents, "there's nobody to look up to but your friends," says one girl in Arlington.

In the Bronx, teens at Lehman High speak animatedly about how they watch out for each other. "I broke a pack of cigarettes my friend was smoking," says one girl. "I didn't want her to smoke. She was mad at me, but I didn't care." City kids say the adults in their lives worry that the groups of friends will turn into violent gangs. Mario from Lehman High angrily disagrees: "They don't think we're responsible. But we are. We're responsible for one another. If a friend is on drugs, we deal with that."

There may be a nascent conservatism and modesty in these youngsters. They have observed the excesses of the past few decades and don't want them to continue. The kids in the Bronx say they've seen too many "scrawny, bug-eyed addicts" to mess with crack. Kids in wealthier places have seen boomer parents and Gen Xers with too much money and not enough time. This group is already worried about the younger members of their generation. "We're getting too liberal," says Alex, a Beverly Hills High student. "There are 11-year-olds doing drugs and having sex."

The most powerful symbol of life run amok is last year's shootings at Columbine High School outside Denver. Columbine surfaced in our first interviews at Rumson-Fair Haven as a frightening consequence of absentee parents. "The scariest thing is that kids kill other kids," says Stephen. "People say we don't appreciate life. The most important thing I can do is teach my kids."

That was echoed elsewhere. "School used to be such a safe place," says Talia of Beverly Hills High. Replies Laura: "Everything is getting worse and worse: 13-year-olds killing teachers, 7-year-olds trying to be 17 years old." Then Roberta: "It's up to us. This generation of teenagers. People are dying, depressed, drugged. We have to make changes." To which Sidonie says, "This is the turn of a new generation. I think our generation will do something amazing. I'm not sure what it will be." Sheera agrees: "Things only get so bad, and then they start to get better."

Despite these impressive sentiments, when you ask the Millennials what pressing social problems they want to fix, they become uncharacteristically quiet. In some cases, their quiescence may be good news. A surprisingly large number of kids seem to feel that racism is much less of a problem than it used to be. Even in Harlem and the South Bronx, kids do not think their careers and economic goals will be derailed by racial discrimination. "It's not race, it's how you are," says one boy. "If you waltz in with your pants half off, you won't get the job. If you wear a suit, they might hire you."

They have no illusions that racism has disappeared. Black kids at Lehman worry about being rejected from some jobs because of race. "Racism is not a problem getting small jobs," says Dustin. "But in big corporations it's harder. There's a lot of second-guessing." Still, most think that they can surmount the difficulties by applying elsewhere, and that they will eventually find the jobs they deserve. Others at Lehman are even more upbeat. "The anonymity of the Internet may be an advantage," says Sacha. "There's no racism on the Net. People see your qualifications before they see you."

On other major problems, like the environment and poverty, the kids generally agree that previous generations' efforts have been futile, insincere, or hyped. Observes Jake, a student at Red Bank Regional High School in New Jersey: "In the 1960s there were so many hippies out there to change things. But as the times changed, they became yuppies. It's kind of contradictory. They said, 'Screw this. I'd rather make money.'"

Some Millennials have become cynical about the never-ending litany of things to worry about. "I just want to graduate," says Alex in Beverly Hills. "I could care less about trees." Adds Carly, from the Windward School, a private school in Los Angeles: "You see in the past there were so many causes. It gets boring after a while." Other kids think the Internet and 150 channels of cable TV allow them to pursue independent agendas, not mass movements. "We're the distracted generation," says Alejandro, a Harvard-bound graduate of Townsend Harris High in Queens, New York City.

And yet even if they throw up their hands at the shrinking ozone layer and the expanding Sahara, these do not seem to be callous, disengaged young people. They care for one another the way soldiers in a foxhole do. It's probably no coincidence that their pragmatic, nonideological tilt is in sharp contrast to that of the boomers at a similar age. Neil Howe is co-author with William Strauss of the book Generations and of several related books, including a forthcoming one called Millennials Rising. He argues that each generation differs from the ones before and after it in a remarkably predictable pattern.

According to Howe, whose work has impressed students of generational differences like Regan and Buckingham, a new generation comes along about every 22 years. In the U.S., at least, the generations come in four distinct flavors, and almost always in the same rotation. Howe calls them, in order, Civic, Adaptive, Idealist, and Reactive. The Civic and the Idealist generations tend to be quite large and are usually polar opposites. The Civics focus on technology and institutions, the Idealists on rhetoric and culture. One displaces the other every 40 to 50 years.

The last batch of Civics was the soldiers: children and teens when F.D.R. was elected and who came of age marching off to World War II. They returned home to create giant corporations ("Plastics," one whispered to Dustin Hoffman in The Graduate), to build Interstate Highways, and to fight Communism. The GI Joes, says Howe, were "doers and rationalists." As they became ascendant, they pushed aside an earlier Idealist generation, "steering America away from the futile moralism of turn-of-the-century reform movements." They also overwhelmed the Adaptive generation that came behind them. Better known as the Silent Generation, the Adaptives kept their heads down, settled into the giant institutions created by the ex-GIs, had quiet midlife crises, and quietly retired.

Next in rotation came the Idealists--the peace-and-love Aquarian baby-boomers who wagged a middle finger at the GIs' legacy, seized the nation's cultural high ground, morphed into yuppies, and now generally control the politics and economics of the country. Then came Generation X--called Reactives by Howe--who entered the work force as companies were downsizing and reengineering, only to find those obnoxious boomers hogging all the opportunities. The Reactives became sullen and depressed until they discovered the Internet and began lusting after the life of dot-com centimillionaires.

Now, 50 years after the last Civic generation, the rotation is beginning again with the Millennials. Their lack of commitment to causes doesn't mean they won't act. Howe believes the newest group of Civics, like the World War II generation, will respond to tangible problems, not spiritual ones, and deliver practical solutions, not symbolic ones. Howe, who conducted interviews with teenagers at about the same time FORTUNE did and whose impressions turned out to be strikingly similar to ours, says the Millennials will be well equipped to make their mark. "They are bright, optimistic, extremely well educated, and they are very generous and open," he says.

They may not be as agog about technology as their forebears, but they have grown up with it and will incorporate it easily into their lives and the institutions they repair or create. Says Howe: "If the Gen Xers were the technological pioneers, the first arrivers clearing the forests and chasing out the bears, the Millennials will be the settlers arriving in their prairie schooners, taking advantage of the clearings that the Xers created." Or as Kirsten, a Cold Spring High graduate, puts it, "We are fireflies in the fast lane, with our cell phones and our beepers and digital gadgets in hand. Technology allows us to do ten things at once."

It's impossible to predict how and where the Millennials will apply their down-to-earth talents and inclinations. Maybe they'll plug the Internet into every refrigerator and lawn mower in the land. Master the human genome and live to be 200. Perfect electric cars. Even invent a good light beer.

On the other hand, maybe they'll figure out how to do what the boomers and Xers failed at so miserably: Simplify life. Balance work and family. Divide child rearing equitably between husband and wife. Give kids an education without giving them an ulcer. Reinvent middle-class life in America.

One boomer-filled institution is already in trouble. The Fair Haven Council decided to turn down that skateboard park. I saw the look in those kids' eyes. We're toast.

REPORTER ASSOCIATE Karen Vella-Zarb