Is Facebook Really Driving The Global Economy?

by CXOtoday News Desk    Jan 21, 2015

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Until now, Facebook has been known for changing the face of social networking. Now the social media giant claims that it also boosted the global economy and put millions of people to work. According to a report by Deloitte & Touche, (commissioned by Facebook) Facebook generated $227 billion worth of economic impact and 4.5 million jobs in 2014. In India alone, Facebook enabled $4 billion economic impact on the economy and contributed to 3,35,000 jobs in some or the other way during last year, according to a study. But the report undoutedly met with some skepticism.

Facebook’s claim to fame

With 1.35 billion users of its internet social network, Facebook would rank as the world’s second-most populous nation if it were a country, said the report. The study analyzes a gamut of economic activities generated from marketing on the social media site, as well from mobile apps and games that consumers play. It also included sales made from advertisements on Facebook. For example, one of the very effective demonstrations of how Facebook accelerate funding was the ice bucket challenge, which was created to promote awareness for amyotrophic lateral sclerosis. The activity was made popular via social media last year.

A chunk of Facebook’s economic contribution was generated in the United States, where the site has an economic impact of $100 billion and supported almost 1.1 million jobs, followed by the UK with $11 billion and then Brazil with $10 billion, said the report.

Read: How Marketers Can Gain From Facebook Ads

Facebook COO Sheryl Sandberg told Reuters, Facebook has been particularly beneficial for small businesses since it has expanded its advertising of small and medium enterprises. “Across the world there is a greater urgency about creating jobs. The good news is that the tech industry is powering the economy and creating jobs within and beyond its own campuses. Every day, businesses of all sizes, sectors, and skill sets are using the Facebook platform to grow and expand,” she said.

Sandberg claimed, Facebook is helping create a new wave of small businesses in everything from fashion to fitness. She cited a group of young women in Bengalore, India, who started a hair accessory business using Facebook and a mother in North Carolina who started the Lolly Wolly Doodle line of clothing, selling to customers through Facebook.

India has been a growing market for Facebook in recent months. With over 90,0000 small business in India having active Facebook pages, the number growing rapidly. It will continue to looking to introduced a slew of new plans to boost revenue from this segment. On her maiden visit to India last year, Sandberg said the company was working to bolster internet connectivity in India to bring more people and businesses online.

Not everyone buys the big numbers

Facebook has undoutedly stimulated the worldwide economy by providing marketing tools; a platform for app developers; and demand for connectivity, data usage and mobile devices. However, despite that some industry experts believe that it is not possible fot the site alone to drive the humongous growth. 

As Ezra Gottheil, an analyst with Technology Business Research told Computer World, if Facebook wasn’t there, people would be using other means to communicate. Advertisers would find other media. Developers would develop for other platforms. “So, Were it not for Facebook, people all over the world would just be sitting there, staring vacantly out into space?” he questioned.

Moreover, some believe one cannot deny that this is a Facebook-sponsored report and that’s why the tech community is highly skeptical. Nevertheless, Facebook’s effort is commendable. While helping create jobs through the platform itself, the growth of the site has helped create demand for mobiles and internet-enabled devices and spurred on growth in numerous areas tremendously.

The good news, according to analysts, the tech industry is powering the economy and creating jobs within and beyond its own premise, allowing a greater opportunity for Facebook platform to grow and expand.