Social technology : summary of McKinsey’s “Social Economy” report

In July 2012 the McKinsey Global Institute released a social technology report titled “The Social Economy: Unlocking Value and Productivity through Social Technologies.” This is a breakdown of the essentials, with illustrations taken from the report. “In this report, we define ‘social technology’ as the products and services that enable social interactions in the digital realm, and thus allow people to connect and interact virtually.” Popular technologies include Google Drive, Facebook and Skype. However despite their fame, few companies overall use these to increase their productivity. The most striking figures they uncovered were the following:

  • There are 1.5 billion social networking users worldwide…
  • …Of this 1.5 billion, 80% regularly interact on social networks
  • 70% of companies use social technologies…
  • 90% of these companies state that it is beneficial
  • The average worker spends 28 hours per week on emails, searching for information and collaborating

McKinsey estimate that the social technology market has the potential to grow to $2.2 trillion.

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They believe knowledge workers (i.e. those who sell their knowledge as a way of living – scientists, programmers, architects and so on) are those that will drive this expansion to making social technologies in organizational life as the norm. The use of social technologies is especially low in SMEs. The proportion of SMEs relying on technology was not factored in so it is unclear whether they need social collaboration tools or not.

Pros and cons for business:

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“The benefits of social technologies will likely outweigh the risks for most companies. Organizations that fail to invest in understanding social technologies will be at greater risk of having their business models disrupted by social technologies.” Email has revolutionised how people interact, but as always there is a percentage of emailing that is a waste of time and distracts from productivity rather than contributes to it.

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Being able to increase productivity by 25% is a massive leap forward – it is an optimistic estimate, but even a 10 – 15% increase in productivity through social technologies would boost economic performance significantly. There is still a level of discomfort prevalent with using social technologies at work. It’s intangibility plus understanding how a “cloud” functions is enough to make most managers wary of implementing social technologies in their business. Distrust has been fostered by Wikileaks, whistleblowers and general tech sceptics. But ecommerce is growing exponentially year by year, and businesses that try to avoid social technologies as a platform are going to lose out on huge profits and customers.

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