In the 1960s, young people led the sexual revolution. Scroll forward 40 years, and young people are at the vanguard of a very different kind of uprising. This time, they are revolutionising the way we work and the way we interact with friends, colleagues and clients.

The trouble is, just like the Swinging Sixties, some are finding it difficult both to keep up with the new ideas and condone its subversive behaviour.

The Xbox Generation, the Millennials, Generation Y or simply the under-25s are entering the workplace today and, like it or not, they have very different ideas from the over-30s, let alone Baby Boomers. They have grown up texting and instant messaging their mates; they buy and sell on eBay, use WiFi, download music and interact through blogging; MySpace, chatrooms and YouTube.com are their playrooms.

Control has shifted away from a powerful few, into the hands of the me generation, and they will not be told what to do, either in their personal lives or once through the revolving doors into the office.

‘They want to take whatever technology is around and do whatever they want with it,’ says Bob Marsh, chief information officer (CIO) at financial services specialist Friends Provident.

IT directors have a choice: tap into the energy and ideas coming from this revolution, or stick their heads in the sand and pretend it will not happen. It is a face-off battle, and traditional old-style information system departments do not stand a cat in cyber-hell’s chance of winning.

The underlying cause of the generational mismatch is what analyst Gartner calls the consumerisation of IT, as technologies with origins in the consumer world infiltrate the enterprise. Instant messaging (IM), Skype and free applications – such as desktop search and the internet – are just the tip of a consumer-driven iceberg.

‘I absolutely believe the trend of consumerisation of IT is one of the big change areas in how IT will be delivered over the next 10 years,’ says Reuters CIO David Lister. Reuters is making a huge effort to spot and adopt new ways of working using consumer-led technology.

Consumer applications of technology are succeeding where traditional IT has failed. Peter Cochrane, co-founder of ConceptLabs, and formerly chief technologist at BT says Wiki technology, for example, is now being used for knowledge management. ‘We’ve had people talking about knowledge management in the enterprise for decades and out pops Wikipedia.’

The business, meanwhile, has long been trying to break down software into reusable chunks – and developers have now created mash-ups, files that slice together movies or audio files to create something completely new.

‘It’s like software becoming “legoised”,’ says Cochrane. ‘The enterprise has been singularly unsuccessful in its attempts to do it, but it’s happening with mash-ups.’

Change, then, is most definitely afoot. Last century computing comprised expensive research and development to create a new product, but costs were so high it took time for even big businesses to adopt technology. As costs reduced, the IT gradually filtered down to home users.

This century computing is about cheaper technology that is available to the mass market. People buy the latest gadgets, bring them into the office and the devices are then fed up through the IT food chain.

A new Xerox-commissioned study by Forrester Research suggests a worrying digital dyslexia, as relatively few firms give new workers the kind of collaborative, social networking tools they are used to at home.

While the Millennials are aware of blogging, webcasts and remote access to email, 59 per cent of business executives questioned say they have no plans to post information on community sites or blogs. Only 44 per cent say they collaborate online with suppliers and partners.

The report also highlights that Millennials are used to receiving information from multiple sources, are good at multitasking, enjoy collaborative work spaces, want instant access to information and like non-hierarchical peer groups.

Crispin O’Brien, head of technology for consultant KPMG, says it will prove very difficult and counterproductive to force young people with a broad range of social computing skills to change to fit in with strict corporate rules – it is, therefore, up to the organisations to transform.

‘You can’t take people who are used to working at a different pace and more informally and say you must fit into our system,’ he says.

The key word for the new generation is collaboration. Where Web 1.0 was all about ordering online and logistics, Web 2.0 is all about social networking: using the technology to put people in contact with each other. In the corporate world, we are already seeing such trends with outsourcing, and the need to communicate with partners and customers beyond the firewall, which means ‘you can’t just hunker down with old-fashioned IT,’ says O’Brien.

It all means that finding information is about who and what you know. And Cochrane says that we are increasingly building a Google-like world. ‘The future is about search, rather than files,’ he says. ‘Companies are anal about their files, but they should be anal about search.’

But what companies actually tend to be anal about is securing files, and the natural reaction for many IT departments faced with a bombardment of new technology is to batten down the hatches.

Providing employees with internet access inevitably exposes organisations to outside threats, which flies in the face of the natural inclination of the traditional IT department’s desire to protect.

Just as some firms still do not like people to receive personal emails or make personal calls, the growth of iPods and memory sticks, for example, can pose a threat. But rather than take a blanket approach, firms need to think pragmatically, says Chris Smith a researcher at user group the Corporate IT Forum. ‘Companies tend to lock down systems, so why not look at those areas of acceptable risk?’ he says.

There will be parts of the business and information that needs restricted access, but that does not apply to everything. It is also important to explain the reasons why security procedures are important.

‘Education is incredibly important,’ says John Sutherby, chief technology officer of global digital marketing agency AKQA. ‘Generally people are educated, but there’s always the temptation for people to cut corners because it is convenient.’

Malcolm Carrie, CIO at aerospace firm BAE Systems, agrees there has to be a balance struck between allowing staff freedom to use technology and keeping the company safe. Like many companies, BAE is aware that consumerisation is coming and it is preparing to respond.

‘Along with peers across the industry, we are all starting to realise there is something in this, but certainly for my own company, we have had discussions about personal and business use,’ he says. ‘Here and now we would not permit personal items to be used within the firm.’ But that policy will not always be the case: ‘We’re beginning to wonder if that makes sense?’ he adds.

Paul Freeman, until recently head of IT infrastructure of Barclays Capital Freeman, recognises that it is hard to get the balance right. The financial services industry can barely breathe without a piece of legislation affecting technology use.

The new BlackBerry Pearl, for example, has a camera fitted – and the Financial Services Authority does not allow cameras on the trading floor.

It is all a matter of striking a balance between what is valuable for the business in a highly regulated environment – and given the kind of people who enter investment banking, it could be just as dangerous to ignore the march of new technology.