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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Josh Bernoff is the co-author of "Groundswell: Winning in a World Transformed by Social Technologies," a comprehensive analysis of corporate strategy for dealing with social technologies like blogs, social networks and wikis, and is a VP-principal analyst at Forrester Research. He blogs at blogs.forrester.com/groundswell.