I’ve often wondered whether social networking companies like Facebook qualify as innovations driving sustainable economic growth, i.e. fueling human prosperity.
As more of the world’s discretionary capital (equity, venture, etc.) is sunk into social technologies we should I think explore the link between virtual technologies facilitating human connectivity (i.e. social media) and vibrant economies conducent to democratic political systems, invention and human prosperity.
Before going a bit deeper into the Facebook thought experiment, let me first propose a simple model for “sustainable” economic growth. It is those foundational inventions that further human knowledge in relationship to the cosmos we inhabit that justify printing of new money, itself a proxy for expanding wealth and opportunity.
But inventions operating in the virtual connectivity space do little to increase our grasp of the cosmological unknowns. They do little to advance our knowledge so that we can expand our control of our environment. Instead, they recirculate trivial knowledge that already exists – what you had for dinner last night and where you plan to go on vacation next month. To be fair, faster access to even trivial knowledge could help seed business opportunities that would otherwise take longer to mature. Facebook could also advance our knowledge of social interaction resulting in new business models and jobs. But it will not foster the kind of fundamental science innovation that gave us the transistor and later enabled the knowledge economy which in turn brought communism and other totalitarian regimes that were holding human enterprise and ingenuity hostage to their knees.
This all leads me back to the argument of sustainable economic growth. Facebook and the plethora of social enterprises that swallow more and more of the world’s future investment capacity do little to move our civilization up on Kardashev’s scale. This phenomenon is fueling what Clay Christensen calls sustaining innovation, innovation that is at best able to keep the number of jobs in existence but not create new ones. So Zuckerberg is a savvy business guy besides being a talented programmer but don’t mistake him for the Messiah of global prosperity.
Photo: Nicolay Kardashev.