It’s no question that social networking has had a significant impact in the way people communicate today. While email had been the killer app of the Internet in the mid-1990s, and thereafter search and then user-generated content, we live in an era in which connectedness plays a highly significant role in both online and real-world economies.

Such is the case with Facebook (NASDAQ:FB), which recently claimed it has generated $227 billion in economic impact globally in 2014, with 4.5 million jobs attributed to activity arising from Facebook use. This is, of course, distinct from the actual business that the company reports on its own. The economic impact is cited as activity borne out of using Facebook as a platform for commerce, or at least as an enabler of business and business activities.

This figure is reported by a Deloitte study commissioned by Facebook itself. Indicators included the value of “Likes”, and the business generated by events organized through the platform, among others. The study even made a correlation between Facebook activity and smartphone sales. In fact, Deloitte attributes a sixth of the value of smartphone sales worldwide in 2014 to users’ desire for mobile access to the social network. “[I]t is assumed that 16% of the value from unique devices purchased in the given year which are used to access Facebook may be attributable to Facebook,” the study says.

Correlation vs. causality

Economists do agree that Facebook — and social networking in general — do have a positive economic impact to some extent. However, it is argued that the $227 billion figure may be overstated. Attributing smartphone sales figures to Facebook usage alone may likewise be unfair. There is a difference between correlation and causality, of course. While Deloitte (or Facebook) might argue that people want to buy smartphones to access Facebook, the reverse could also be the case — that more people are able to access Facebook due to the prevalence of cheap smartphones and data plans.

Causality is a point of contention here. In an interview with the Wall Street Journal, Stanford economist Roger Noll attributes Facebook’s meteoric rise as an effect of the growth in Internet usage, and not a cause. “Facebook is an effect, not a cause, of the growth of Internet access and use,” he says. Still, Facebook COO Sheryl Sandberg says the social network is one of the primary reasons people buy smartphones today, citing that Facebook access is “one of the main drivers of why people buy phones, particularly in the developing world.”

There is no question that Facebook is now a viable platform for B2C and even B2B marketing for anyone from small businesses to large enterprises. Businesses pay for sponsored listings. Facebook pays for wages, utilities and services. Facebook-owned startups and companies account for their own activities. Individuals get to use the platform to market their small businesses. Employers use Facebook to check out job applicants. It’s quite complicated to peg a value to all the business and economic activity arising from the social network itself.

Value added?

One thing that Facebook and Deloitte forgot to account for is the productivity loss that can be attributed to unnecessary Facebook and social network usage in the work setting. How many aggregate man-hours are lost from sharing viral cat videos, incessant selfie-posting, and falling victim to clickbait headlines and personal chats on company time? How much bandwidth do companies unnecessarily consume (and often pay for) with such activity? How many students waste valuable time stalking exes instead of studying for potentially better grades and subsequently improved earning potential in future? By some rough estimate, productivity loss can be estimated at around $28 billion annually. This is an un-scientific estimate, but the logic follows — there are both benefits and losses.

If anything, then the net economic impact of Facebook may be closer to neutral than the hundreds of billions a year that the company claims. There is increase in consumption and activity, but one might question the value added of these activities. Are we using Facebook to build things, or are we wasting our time on trivial pursuits through the platform?

The post Facebook Claims $227B Global Economic Impact, but Doubts Prevail appeared first on VR World.

Taiwan’s Minister of Economic Affairs John Deng (鄧振中) said on Jan. 12 he would believe that Taiwan and China will be able to sign a trade-in-good agreement sometime this year, while the pending cross-strait service trade pact shall be approved as well.

“Taipei has continued to contact with Beijing in the hopes of setting a date for the next round of negotiations on the trade-in-goods pact,” Deng said. “The Ministry of Economic Affairs will increase communication with Taiwanese business and other sectors of society to make them understand the benefits of the agreements.

The minister made his remarks when he was briefing the legislature the latest plans and development of the ministry’s achievements. The cross-strait service trade pact has been signed in June 2013 but has been pending at the legislature for final approvals ever since. The trade-in-services agreement, a part of Taiwanese government’s efforts on economic liberalization, has failed to be approved by the legislature amid protests over a perceived lack of transparency and distrust of the Chinese government.

In the meantime, the minister said that the ministry will take advantage of all kinds of media to increase explanation and introduction of the ministry’s work, regarding the process of these agreements and pacts.

“We will do our best to introduce them so more people will have a better picture of what we are doing. It will also help reduce potential misunderstanding,” Deng said. “I must say, that I am pretty optimistic on that.”

Meanwhile, regarding the plunging gas prices, Deng said that it will help increase Taiwan’s GDP up to 0.2% to 1%. Quoting an analysis by the ministry, Deng said that the plunging of gas prices will gradually stop during the third quarter of this year, while the price will remain somewhere between US$60 and US$80 per barrel.

“Most economists would believe the same way like me. Some foreign banks predicted that the nation’s GDP will go up 1%, while some think tanks believed it would be somewhere around 0.2% at least. But, there is no negative comment on that, not that I have heard,” he said.

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HTC plans to enter lower-end 4G phone market in 2015

HTC (TPE: 2498) said on Dec. 2 that the company is preparing to manufacture lower-end 4G LTE-enabled phones as the segment gains popularity in Taiwan.

HTC Desire 620 is now the cheapest 4G phone which costs US$225 each, while the company intends to launch new 4G phones with a lower price tag in 2015.

“The segment accounts for some volume in the overall market, and HTC will not be absent from it,” said Jack Tong (董俊良), president for HTC North Asia.

Tong, however, declined to give a specific timetable or actual pricing for the upcoming low-cost 4G phones.

IDC, tech research firm, said in a Nov. 27 report that Taiwan’s smartphone shipments for the third quarter hit a record high of 2.45 million units on the back of the launch of Apple’s two new iPhone models as well as strong demand for mid-range models from other brands.

Local business urges the government to keep Duh Tyzz-jiun in his office after the Cabinet reshuffle

Lin Por-fong (林伯豐), chairman for the Chinese National Association of Industry and Commerce , Taiwan, said on Dec. 3 that Minister of Economic Affairs Duh Tyzz-jiun (杜紫軍) should remain in his office after the Cabinet reshuffle.

“Duh is very well acquainted with Taiwan’s industrial development, and his departure would be a loss for the country,” Lin said.

On behalf of the association’s members, Lin described Duh as a “decent person” and experienced official.

Duh, along with Premier Jiang Yi-huah (江宜樺) and other ministers, resigned after the Kuomintang’s (KMT) being defeated during the elections on Nov. 29. Duh said that he will not return to the post even if nominated by the new premier.

Duh took oath of his office four months ago, when then-minister Chang Chia-juch (張家祝) resigned over the gas blasts in Kaohsiung on July 31, which was an accident that killed 30 people.

Vice Premier Mao Chi-kuo will succeed the premier’s office

Taiwan’s Presidential Office confirmed on Dec. 3 that Vice Premier Mao Chi-kuo (毛治國) will take oath of office on Dec. 4 and become Taiwan’s new premier.

Mao’s new job came from Jiang Yi-huah’s (江宜樺) stepping down after the Kuomintang’s being trounced during last Saturday’s elections. Mao will be President Ma Ying-jeou’s (馬英九) last premier before his presidential term ends in 2016 if there are not other surprises.

An anonymous source said that Mao does not plan to carry out any major reshuffle for the Cabinet at this moment, while most ministers will be kept in their offices.

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