Facebook created 232,000 European jobs in 2011 (study)
Summary: Deloitte has released a new Facebook-funded report that finds the company enabled an economic impact of €15.3 billion, supporting 232,000 jobs, across the EU and Switzerland in 2011.
Those numbers might be a bit overestimated, however, as the social networking giant paid for the study. Facebook commissioned Deloitte to assess its economic contribution across the EU27 with a focus on United Kingdom, Germany, France, Italy, Spain, and Ireland. The 47-page study, titled “Measuring Facebook’s economic impact in Europe” was conducted between November 2011 and January 2012.
The report examines Facebook’s economic impact through narrow effects (day-to-day activities within Europe), which includes the company’s economic contribution proportionate to the level of employment generated in 2011 (direct effects). It also includes the impact felt in associated supply-chain industries who supply to Facebook (indirect effects) and consumer spending by staff (induced effects). On top of that, it also looks at broad effects, which are related to value from third parties as a result of the Facebook ecosystem.
Here are some of the report’s highlights:
- Facebook supports €1.37 billion in ‘business participation effects’ in the UK as businesses use Facebook’s pages to promote their brand, raise awareness, advertise and generate new business. In particular, small businesses benefit from such a developed customer relations management system at no cost. ‘Business participation’ enabled by Facebook supports 18,400 jobs in the UK.
- When widened to the whole of the EU, Facebook enables €7.3 billion of broad economic impacts through Business Participation supporting 111,000 jobs.
- Through ‘Platform effects’, notably the app economy servicing the Facebook platform and social activities, Facebook has enabled €561m of economic activity. Facebook generates value by giving software developers a platform to develop apps for users, generating revenue, and stimulating innovation. It also creates value by making it easier for users to organise events and invite larger numbers of attendees, which in turn can lead to greater expenditure than would not have been the case otherwise. This activity generates 7,500 jobs in the UK. When widened to the whole of the EU, Facebook enables €2.2billion of broad economic impacts through Platform effects supporting 33,000 jobs.
- Facebook has supported increased technology sales through increased demand for devices and broadband connections, supporting €659 million in technology sales and 8,800 jobs in the UK. Across the whole of the EU, Facebook enables €5.5billion in technology sales, with 85,300 associated jobs.
“Today’s report shows that Facebook is about a lot more than sharing pictures or keeping up with friends; increasingly social media means growth and jobs,” Facebook COO Sheryl Sandberg said in a statement. “As the Deloitte study highlights, social media is proving particularly valuable for small and medium sized businesses, which form the backbone of the European economy. The impact of social media is a bright spot in challenging times, but growth won’t happen on its own. We need to make sure that we invest in the right education, training, technology and networks so that social media can continue to drive innovation and economic growth.”
“Facebook embodies a new generation of social media organisations that have significant global impact and create economic value through enabling ecosystems of businesses to flourish,” Chris Williams, Deloitte Economic Consulting partner, said in a statement. “Traditional narrow measures of economic impact are limited and it is critical to consider the broader impact of Facebook in allowing other parties to create value across the economy.”