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March 04, 2009

Will online volunteers transform our economic recovery?

by Josh Bernoff

I've started to write for the DigitalNext blog on Advertising Age. This is my first post for them.

The last 12 months have seen not only a severe economic contraction but also a surge in online social activity. According to U.S. consumer surveys from Forrester Research, the proportion of online people consuming social content at least once a month grew from 48% in 2007 to 69% in 2008, and the growth shows no signs of stopping.

This is already transforming the world. As Tim O'Reilly has pointed out, Web 2.0 transforms. Classifieds become Monster.com, which gets undermined by Craigslist. Britannica fades in favor of Encarta, which gets pulverized by Wikipedia. Photo film becomes Snapfish, which is swallowed by Flickr. In each case the end state is free, people-generated and revenue-challenged.

A pessimist sees value erosion. But the value's not gone, it's just different. The consumer/creators get paid for their contribution in love, admiration, pride and a sense of belonging.

The online social world is driven by free, volunteer activity. Now add a horde of unemployed and underemployed digital talent, both those laid off and new college graduates who, when they reach the doorstep of the job market, find a sign that says "Sorry, We're Closed." While they wait for better jobs to appear, they're going to invent online tools that supplant the current ones -- tools whose modus vivendi is emotional, not financial.

What will they transform? Just about any economic activity is fair game. Transportation? Loans? Education? While the lack of available credit is grit in the gears of capitalism, there's no shortage of psychic income to exchange, or people with talent they can't sell right now. The sites these whizzes create may barely make enough coin to support the person who programmed them, but they'll undermine real money-making sites and businesses.

Amid the rubble of foreclosures and layoffs, this may just be a little green shoot that transforms the recovery. But in this new economy it will be reputation, support and sharing -- not just money -- that will make the whole thing go 'round.

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Comments

Jamie Favreau

Sharing is the way of business and has been since the beginning of time. You get more value out of collaboration then working alone. This is why social networking is working. It is an additional way of keeping in touch.

Facebook also killed MySpace, Classmates.com and Reunion.com!

Owen Lawson

Your article is dead on. I completely buy its supposition and its conclusions. Social General Media is an oxygen tank that continues to revitalize and renew those who are looking to rewrite their personal brand's value proposition.

Be great today Josh!

Angelo Fernando

Always refreshing to hear a dose of optimism in these challenging times, Josh. I've seen a lot of that psychic income from people who lost their job in just the last few days!

jeff fromm

Josh, I agree with your points but would add that most of the young people who are finding the "we're closed" signs grew up "digital native" unlike my generation. The implication is that they will use online to express themselves which wasn't the case during recessions in the late 1980s and 2001.

Thanks for the insightful post.

Jeff Fromm
www.marketingsorbet.com

Mary Hall

I totally agree with this!
The economic downturn will help drive blogging and the desire for social networking.
I have seen this on my own blog, The Recessionista via user and reader response.
http://therecessionista.blogspot.com

Lynnelle

Now when these "digital, un - under-employed natives" band together, THEN we'll see the new transportation, education, financial systems. It will happen. In the interim we'll continue to see the one-offs - Great in and of themselves; yet, still ego-driven. It's an exciting future. Great article, Josh.

Lynnelle Wilson, http://www.boldvisionblog.com

club penguin

I completely buy its supposition and its conclusions. Social General Media is an oxygen tank that continues to revitalize and renew those who are looking to rewrite their personal brand's value proposition.

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