January 22, 2015
A study commissioned by Facebook found that the social network currently accounts for $227 billion in global economic impact and has helped create 4.5 million jobs. The company claims that its social network drives smartphone purchases and creates job in both tech and non-tech industries. However, independent economists believe those numbers may be overstated because Facebook and Deloitte, the company that prepared the report, may have used incorrect assumptions.
One of those assumptions is about Facebook’s influence on smartphone sales. According to the study, Facebook is responsible for 16 percent of sales. Deloitte cited a statistic in a European survey that said 16 percent of respondents could not live without social media, reports The Wall Street Journal.
“The value of smartphones is that they help you read Facebook — in addition to other benefits — not vice versa,” said Tyler Cowen, a professor of economics at George Mason University.
Another professor believes that Facebook agreed the study reversed the role of the social network in the findings. Economist Roger Noll of Stanford University wrote, “Facebook is an effect, not a cause, of the growth of Internet access and use.” In the study, Deloitte assigned economic values to each Facebook like or the people who RSVP’d to Facebook events.
Facebook Chief Operating Officer Sheryl Sandberg will speak more about the findings at the World Economic Forum this week, but she stood by the results. She said the company wants to show that they are creating jobs and wealth outside of the tech industry.
The study estimates that in North America alone, Facebook has a $108 billion impact and creates 1.2 million jobs.