Think Facebook is just a drain on employee time and company productivity? Think again.
A new report finds that the largest social media tool supported 4.5 million jobs worldwide and $227 billion worth of economic impact in 2014. Here in the U.S. Facebook supported 1 million jobs alone. That’s a sign that new industries are contributing significantly to our economy and should be left to flourish.
Facebook has 1.35 billion users. If it were a nation, it would rank as the world’s second-most populous.
From its humble beginnings in a Harvard dorm room just over a decade ago, the now $200-billion company unites people across generations, cultures, and locations to share memories, moments, ideas, products, and action. Facebook put the budding world of social media on steroids and created a new mechanism for fostering social cohesion, trust, and interconnectedness among generations that Robert Putnam famously doomed to “bowl alone.”
We understand the value of Facebook in our daily lives, but a new study from Deloitte (commissioned by Facebook) finds that the company generates billions in economic activity as entrepreneurs and small business owners can take their ideas to the market and find new distribution channels for their work and products. However, all of the process and tools used to promote those products on Facebook generate jobs within themselves. The impact is staggering.
Now onto the numbers themselves. Deloitte looked at three areas of Facebook's worldwide impact: marketing effects, platform effects and connectivity effects. Marketing effects are the benefits for businesses that use Facebook as an advertising tool. This was the company's biggest home run, with Deloitte estimating $148 billion in economic impact and 2.3 million jobs created. …
Then come the platform effects. These are essentially all the apps and games that can be created within Facebook's platform. Think of these as those annoying friends who are still inviting you to play Candy Crush and insist on telling you what level they reached, making you wonder what they do at work all day. Here, Deloitte estimates Facebook has been responsible for a worldwide economic impact of $29 billion, plus 660,000 jobs.
Lastly, there are the connectivity effects. This is the infrastructure needed for Facebook to be used, like broadband improvements and new devices. Worldwide, Deloitte says this has $50 billion in economic impact and about 1.6 million jobs.
More importantly, Facebook is being given credit for creating jobs but not facing the blame for the jobs it eliminates… By the formulae used by Deloitte, Facebook is not held responsible for this net job destruction.
Many companies are Facebook, just on a smaller scale. When someone creates an app, and it is successful, it leads to people being hired. Startups typically go from a handful of founders to a team of, say, 15. But that's just direct hiring. Those 15 people need to eat, so the local diner may hire a cook or waiter. They need to travel, so Uber may have to add a driver in their area. The need for new office space leads to new jobs in real estate and interior design. That's how the entrepreneurial ecosystem works.
But, while cheering Facebook, you also have to give a shout out to the entrepreuners around the world themselves. People with the brains to innovate, and the economic freedom to turn those dreams into businesses, are the true heroes of the business world.
Let’s be clear that Facebook did not create 1 million U.S. jobs, but let us surmise that if Facebook didn’t exist many of those jobs would not exist either.
A cottage industry of app developers, designers, marketers, and others has have popped up because of social media. Let’s not forget the entrepreneurs who start and grow their businesses entirely through this social media platform. All of those new jobs stimulate economies by workers eating out for dinner, buying new clothes, buying new electronics, purchasing cars, building homes, and so much more.
This not really is not patting Facebook on the back but sending a reminder to our friends on Capitol Hill and in State Houses across the country that innovation is critical to the growth and health of our new economy.
With lawmakers, local regulators, and even law enforcement throwing cold water on the efforts of startup companies that are disrupting established industries (such as ride-sharing service Uber and home-sharing service Airbnb), this is a reminder that they are biting the hands of producers and job creators in their states and districts as well as limiting the options for potentially lower cost, more environmentally friendly, more socially conscious, and interpersonal options on the market.
The lesson here is hands off innovation.