Have you ever wondered if and how Facebook has impacted the economies world over? The apps that have built over it, the exposure it provides to businesses, Facebook services that are offered etc all contribute to the economy indirectly by creating jobs and creating revenue for it’s users.
It is obviously quite difficult proposition to attach an exact figure to how Facebook has impacted an economy, but leading global consulting firm Deloitte has tried to do exactly that. In a report – Facebook’s Global Economic Impact – created by Deloitte for Facebook, they have tried to quantify it with numbers by analyzing how Facebook’s marketing, platform and connectivity effects have facilitated growth and jobs around the world.
The report opines, “Facebook’s broad economic impact enables far more revenue and jobs for global and local economies than Facebook’s own company operations”. The report says that Facebook had a global economic impact of $227 billion on economies and and facilitated 4.5 million jobs world over. North America alone had an economic impact of over $100 billion in year 2014.
How Facebook impacted Indian Economy
Although India has a large Facebook population, it’s economic impact was not as much pronounced as some of the western countries. The report cited Facebook’s impact of India economy equivalent to $4 billion or approximately 25,000 crore rupees. Facebook also contributed to 335,000 jobs in some or the other way.
The report divided it’s economic impact in three segments – marketing, platform and connectivity effects.
The marketing effects estimate the impact from businesses’ use of marketing tools to drive online and offline sales and to increase awareness of their brand. At a global level it was estimated that the market effect of Facebook enabled $148 billion of economic impact and 2.3 million jobs. In India, marketing effects contributed to $1.4 billion and 129,000 jobs.
The platform effects estimate the economic impact from 3rd party products and services built on top of Facebook platform. Globaly, the platform effects of facebook in 2014 enabled $29 billion of economic impact and 660,000 jobs globaly. In India, platform effects contributed to $0.5 billion and 40,000 jobs.
The connectivity effects create economic impact through Facebook motivated internet use and purchase of devices. Globaly, the connectivity effects of facebook in 2014 enabled $50 billion of economic impact and 1.6 million jobs globaly. In India, platform effects contributed to $2.1 billion and 165,000 jobs. Clearly the connectivity effect has maximum economic impact in India!
Our Take
While it is commendable that Deloitte has tried to come up with Facebook’s impact, it is really quite debatable, whether Facebook is responsible for all the growth and job creation. They are probably just a subset of the whole internet economy.
Yes, developers create apps on Facebook and brands get exposure etc, but is Facebook really responsible for it? They are probably just the enablers – they are a platform. Without people, it is nothing. It’s the people who are actually seeing the brands, or commenting on them or buying devices and not the platform itself.
In our view, Facebook is just the means to an end!
What do you think? Do let us know in comments.
It is definetely worth studying if facebook has had such impact on the economy.