In my last blog about the 72 million people that are into cross-border ecommerce I mentioned that the average Facebooker spends 25.4 min/day on Facebook. That is a staggering 12.7 hrs a month, equaling over 1.5 workdays! That seems to be a lot of time wasted, or shall we say, repurposed. Assuming that lots of the Facebook time actually happens at work, could we argue that the phenomenal growth of the social networks actually contributed to the decline of the economy?
Lets have a look at what Alexa says on how much time visitors spend on the other networks: YouTube 23.3 min/day, MySpace 21 min/day, LinkedIn 6.7 min/day, Twitter 9.3 min/day (I didn’t add Bebo, as Bebo users are too young to work). When you multiply that time spent with their estimated user numbers (FB 200m, YT 200m, MS 150m, TW 30m, LI 50) assuming that 33% is active, and 50% is in the USA, you get a staggering 5332 manyears per day repurposed to social networks. Assuming that 75% of the social networking is actually spent at work, and a USA GDP/capita of $30k, you are looking at $150m lost in real productivity per day. On an annual basis that means a lost productivity of around $55B, or around 0.38% of the USA 2008 GDP. Given the annualized Q4 2008 contraction of US GDP of 6.2%, you could argue that social networks caused around 5% of the recession (assuming that the social networks did not generate lots of GDP). No wonder that companies are increasingly blocking IPs of social networks.
Now stop reading this blog and go back to work!
Catch you later
Andre
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5 Comments to 'Has the social networking craze accelerated the recession?'
April 24, 2009
It is certainly an interesting argument, but not one I believe to be true based on the information provided.
The big assumption here is the time of day that Facebook is mostly used, just because a person is at work for 75% of the day does not mean that they do 75% of everything at work (100% of my sleeping is done at home!). Without this assumption the conclusions cannot be drawn. Equally a lot of heavy Facebook users are working, promoting their businesses and themselves, saving time calling and getting in touch with people to arrange events etc, this is could actually be making them more productive and/or successful.
It is also true that younger generations are picking Social Networking over traditional activities such as watching TV (or repurposing their time), which is in turn translated into increased online Ad spend (and I suspect a lot of this money will be going to Social Networks!).
Social ‘Not Working’ is a growing issue for businesses with potential for both positive and detrimental effects, every business will have its own point of view on the value of such sites and will need to make their own call on how they deal with the issue.
April 28, 2009
Hi Andre,
I must admit that I have made similar considerations about impact of the web as a whole, and social network in particular, on the clerical productivity. Nevertheless, lazy workers have always wasted time doing nothing productive, i.e. solitaire or other useless games. So I came to the conclusion that in this perspective it’s more a “how to waste your time” issue, rather a “social network (un)productivity” effect… So I do agree with Riley
Difficult to measure, though…
I better rush back to produce, now.
Best,
Dario
April 29, 2009
So, does a half hour a day at the gym also contribute to the Recession, or shall we all be fat, unhealthy laptop monkeys?
April 30, 2009
Actually, Facebook and other social networking apps will indirectly increase productivity by diverting the old unproductive time wasting activities to more productive networking time activities that will only increase the individuals value to an organization or marketplace. For as much of it is what you know a lot of it is who you know!
May 7, 2009
Great points, and yes, I agree, I should factor in the value that the social networks actually create to determine the total impact that they have on the economy.
The point that social networks do add value was made clear to me last week: a seemingly random tweet from my friend Pieter that said “Just downloaded new Android app” led to that Pieter actually will develop an Android app for the Duty Calculator! There it is: value. Without Twitter, Pieter would not have developed this Android App.
So how can we quantify this value? Lets have a look what the networks have brought to me. I am a user of Linkedin since May 2004, on Facebook since early 2008 and registered Tweeter since a month. All in all the networks have brought me 2 candidate leads for jobs, 7 business deals of various sizes, and over the past month 340 leads to our Bundle Tech and Duty Calculator sites. When valued on a lead generation fee basis, the total economic value totals up to around $6000 per year. Not bad. Assuming that 5% of the active users of the networks would extract a similar economic value like me, the total economic value created by social networks would total up to $43B, which would roughly neutralize the $55B in lost productivity as calculated above.
Wow. Maybe a better title for this blog post should be “Fuel the economy, keep Tweeting”
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