Economics of Social Networking
As society progresses and new technologies emerge, people are ever changing the ways in which they interact across various mediums. With the invention and implementation of computers and the Internet, people have changed the way they communicate with family, friends, colleagues and business associates. When people with common interests communicate and interact with one or more people in cyberspace, it is know as social networking.
Social networking, is the use of a website to connect with people who share common interests, whether personal or professional. Consequently, social networks can potentially affect all aspects of life including economics. The economic consequences of social networking are multifaceted because cyberspace is not bound by the conventional geographical boundaries that confine today’s organic economies. The absence of such boundaries allows people to interact with other individuals and groups who might physically be many miles away. Five ways social media is changing our daily lives is an article on social media guide. Social networking has changed where we get our news, how we start and do business, how we meet and stay in touch with people, what we can reveal and what we can influence.
The era of social relationships began in the mid 1990’s when people began to sign up for online profiles and connect with others to exchange information. By late 2009, the lines between networks and traditional sites began to cross over. In a video talking about the effects of social networking it states 1 out of 8 people last year in the U.S. met via social media. The worlds largest social network, Facebook has reached 100 million users in nine months, that is unheard of no other traditional media or social network. It goes without saying that social networks and blogs are now more popular than email. Along with Facebook, IPod application downloads reached 1 billion in nine months. If Facebook were it’s own country it would be the 4th largest in the world. These social networks allow a large population of the world Users to be recognized by personal identities while being provided a customized experience. This new type of experience creates demand for various consumer goods and leads to a great economic opportunity.
With the job market fizzling Americans are now spending much of their time on online entertainment sites. Journalists speculate that as people lose their jobs they look towards cheap entertainment. They also turn to networking sites to search for jobs and keep in touch with friends. Internet gaming and online entertainment have given an intense growth to the economic down turn. However, sites that rely on selling advertising might struggle to sells ads because people are buying less.
Economic opportunity is a byproduct of many social networks because the interest groups who interact in cyberspace have an impact on labor, capital and land resources in the area where the physical products are made, shipped and consumed. This affects the people who take part in the manufacture, trade, dispersal and utilization of goods and services on both micro and macroeconomic scales.
Economics have become internationalized through a process known as ‘globalization.’ “Developing trends are the growth in information processing occupations, the role of information and knowledge in society, new and more flexible work processes and organizations and changes in the role of national states.” (Lievrouw & Livingstone, 2007) These developments are reflected in economic and social science research and have greatly impacted trade industries.
Social networking affects goods that are produced through interest group websites that can indicate the demand for certain goods through online interaction. Social networking allows manufacturing industries to know what kind of manufactured goods would generate high demand. Electronic and print communications have enabled goods and services to be matched to the demand for them as never before seen in the past centuries. Unfortunately these social networks involve certain risks when delivering content because of the lack of governance.
The existence of national trade and industry policies in the United States are more market oriented driven. Europe’s policies for example are consumer oriented. Economy cluster dynamics have now become central of economic coordination and government policies. “Clusters work through networks between a variety of business and other appropriate actors who are familiar with each other’s expertise, trustworthiness, reliability and willingness both to share relevant assets.” (Lievrouw & Livingstone, 2007) New business’ now readily have better information available to them about inventive possibilities and market opportunities because of social networks.
One study found five observations on how social networking online has changed social networking offline. The article findings show that social networks like Myspace and Facebook help people in meeting people and aid users to know who people are before they met. Social networks help users pursue people further, and allow people for example to see friends advice on a product, help increase knowledge about friends and contain community calendars helping users become more involved and social.
The effects of social networks on employment, (Granovetter, 1995) found in a survey of residents of a Massachusetts town that over 50 percent of jobs were obtained through social contacts. In this study “the role of social networks as a manner of obtaining information about job opportunities and explore its implications for the dynamics of employment.”
“Do social networking sites change the way we work” is an article that looks at the positives and negatives of on the job social networking. The negatives listed are these sites are addictive and distract people from their jobs, constantly updating their status or checking on what their friends are doing. Putting to much information of oneself can lead to identity theft or unemployment. Sites avoid mentioning privacy to users, because even mentioning privacy positively will cause users to be more cautious about sharing data. As many airline employees have seen posting blogs about complaining customers, they have lost their jobs. The positives effects as the article lists are; sites can be excellent for business networking, quickly distributing information to many and help when job hunting.
Information, communication technologies and services have developed all aspects of a cyberspace economy. Whether it is privacy issues, social network growth, economic benefits through social networks and the pros and cons of social networks.
