The report commissioned by the government's chief scientist, said people who refuse to participate in social networks such as Facebook and Twitter could find themselves marginalised as the majority increasingly express their identity online.
It concluded that over the next decade, a person's traditional "identity" would undergo "increasingly dynamic or volatile" changes, the Telegraph reported.
Prof Sir John Beddington's report pointed that the increasing reliance on technology or social media risked creating a "dichotomy" in society, in which the elderly "arguably could become partly disfranchised."
The authors also noted, however, that the internet had given some of those who struggle to interact in the offline world a chance to create a "true" identity for themselves for the first time.
The 71-page report was based on 20 separate reviews of a range of areas affected by identity including social inclusion and mobility, education and skills, crime and mental health.