Is Social Media The Engine of New Economic Growth?

by Dan Robles on 02/20/2009

Click image to activate

Click image to activateBusiness Models of the Future:

Business Models of the Future:

The great new social media business models of the future will be in the areas of “The Last Mile of social media” and “Social Vetting mechanisms”.   I have written about these two elements in the past.  However, this article will attempt to focus on how the future engine of economic growth can use social media platforms to power social capitalism.

The Last Mile:

The Last Mile of social media is where the rubber meets the road.  I can chat with people all over the world on Twitter and Facebook, but nothing happens until I walk out of the house and meet real people in real time to create a real business that really increases real human productivity.  If I can accomplish that, monetization is simple matter.

If everyone is harvesting ideas from all over the world, Last Mile technology is the key to bringing these ideas to the ground.  The new social enterprises will develop, support, enable, and service the structure for innovation in neighborhoods and communities.

Feel the Burn:

To understand the power of this paradigm; there is little doubt that the leader of the free world was elected by the Last Mile.  That is huge.  Now, when the Last Mile is in trouble with mounting layoffs, foreclosures, and wealth destruction, eyebrows are raised, headlines make the first page, and everyone is wondering what will happen in to the Last Mile.  In 1992, this author saw Los Angeles burn over a whole lot less than what’s coming down the pipes today.  This is not a game, this is very serious stuff.

Social Vetting:

Social Vetting, on the other hand, is less understood, but like a tornado there is nothing subtle about the forces that it can impart against the darkness of secrecy.  All markets become more efficient in the presence of an effective vetting mechanism, as such, monetization is a simple matter.  Conversely, the absence of vetting is the root of all corruption – as we are now painfully aware.

Begging for Mercy:

To understand the power of this paradigm; Facebook was recently brought to its knees by Social Vetting.  First, a social watchdog group noticed the change in the terms of service and set the dials on “viral”.  Facebook users organized immediately and lay siege to the core validity of a 3.5 billion dollar new media titan.  Within hours, Facebook was backpedaling. The 300 billion dollar marketing industry, ravenous for viewer impressions, was sent back to the drawing boardroom.  Meanwhile, legacy media spin took pot shots at Facebook’s inability to monetize the value it claims to create.  Again, this is not a game, this is serious business.

Role play

In each of these examples social media responded effectively to an existing injustice.  This presents the dire question:  If the Last Mile and Social Vetting can have such a profound effect in the REACTIVE role, what would be the underlying dynamic if applied in the PROACTIVE role ?

The Engine of Economic Growth:

Consider this: Social media has no problem scaling up, rather, it has a problem scaling down.  The Last Mile and Social Vetting represents the compression cycle of the new economic engine.  The spark of innovation ignites the secret sauce to scale upward.  With a repeatable cycle, we can literally create an engine of economic growth cycling from down-scaling to up-scaling, and back to down-scaling, and so forth, forever.  Each combustion cycle literally pumps value into an economic system.

Master of Puppets:

I’ll let the reader now ponder the cause and effect sequences of this proposition.  But I will leave one hint: Wall Street becomes the servant, not the master.  As such, monetization becomes a simple matter.

{ 13 comments }

Anthony Poncier February 22, 2009 at 9:42 am

RT @LilianMahoukou: Is Social Media The Engine of New Economic Growth? http://tinyurl.com/czbh6c

Lilian Mahoukou February 21, 2009 at 3:19 pm

Is Social Media The Engine of New Economic Growth? http://tinyurl.com/czbh6c

Vladimir Dimitroff February 21, 2009 at 8:24 am

RT @microgeist: via @JDeragon "Is Social Media The Engine of New Economic Growth?"…http://tinyurl.com/czbh6c

Maistora February 21, 2009 at 9:22 am

Good FFT*, Jay!
(* food for thought)

The big model is clear and has been evolving over the last decade or so. What I feel is still lacking is a business model (or many) for the Proactive bit in the Last Mile. Innovation that leverages knowledge sharing and idea exchange to reward intent, courage and action.

While we can muse endlessly over the philosophic aspects (and even over practical aspects of someone else’s action – and success, or otherwise) – there have always been a rare few who prefer to act rather than debate. A tiny minority (a very skewed Pareto) they have been part of society before social media, since the Pyramids and before. The question is how to increase their number in a quantum leap, what models can involve ‘the masses’ in conscious, purposeful action.

Such model(s), imho, will truly drive economic growth.

Wickram February 21, 2009 at 8:17 am

RT @microgeist: via @JDeragon “Is Social Media The Engine of New Economic Growth?”…http://tinyurl.com/czbh6c

TomL February 21, 2009 at 7:01 am

via @JDeragon “Is Social Media The Engine of New Economic Growth?”…http://tinyurl.com/czbh6c

TomL February 21, 2009 at 1:01 am

via @JDeragon “Is Social Media The Engine of New Economic Growth?”…http://tinyurl.com/czbh6c

Oscar Antonio Moralí February 20, 2009 at 6:43 pm

via @JDeragon “Is Social Media The Engine of New Economic Growth?”…http://tinyurl.com/czbh6c

Steven Bridges February 20, 2009 at 12:19 pm

Thank you for the simple break down of where social media is heading. I really enjoyed your presentation last night at Watkins College of Art and Design and look forward to following you.

Steven

JDeragon February 20, 2009 at 10:10 am

Is Social Media The Engine of New Economic Growth?: Consider this: Social media has no problem scaling up, rathe.. http://tinyurl.com/czbh6c

JDeragon February 20, 2009 at 10:00 am

@elsua You comments on the post were insightful. Thank very much and I hope others read your comment 🙂 http://snipr.com/caz7l

Luis Suarez February 20, 2009 at 9:56 am

RT @JDeragon: @elsua would love your feedback on this one http://tinyurl.com/czbh6c << Just commented in it, Jay! Thanks!!

Luis Suarez February 20, 2009 at 10:55 am

Hi Jay! What an insightful and straight to the point blog post! Loved it! And you surely have put together the outline of how we are probably going to move forward with this particular econolypse. I thought it was particularly interesting and spot on your conclusion as well as the inner thought behind the lines that the real power of social software is when it is put to the task to work on what really matters and make a difference. That inherent willingness in all of us to make things better by nature, but with the additional twist of getting the best out of each and everyone of us, as opposed to just a few, to reference your conclusion.

I can only hope that the power of social media will eventually be an awakening call for all of us to show and demonstrate how each one of us can have a significant impact in what we do, how we do it and with whom we do it! Welcome to the Knowledge Economy of the 21st century, my friends!

Great post, Jay!

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