Social Media and its Economic Implications - Essay Sample

Introduction

Technological advancement has played a major role in the global economic world. The swift communication channels, payment procedure, customer accessibility channels which boost marketing platforms and the provision of the market base are just a few of the areas that have been streamlined by the application of technology (Srinivasan, 2014). The internet has increased the business opportunities across all corners of the world making all products advertised on the internet accessible to all interested internet users. Social media platforms are key beneficiaries of internet accessibility attracting a large mass of the global population. Social media, on the other hand, contributes to the globalization of the world and creating a common market for the world population. Recent years have realized an increase in the users on social network platforms which runs concurrently with the rise of social media platforms across the world. Most people across the world are conversant with different technology that contribute to the globalization of economic activities. The business world is also on the constant competition and the need to adopt new technology which on the result in large market coverage and economic output (Hajli, 2015). The use of social media by business organizations has realized a tremendous rise in previous years. This can be associated with the need to expand market coverage and improve market segmentation to boost business goals.

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Social media is applied by organizations in advertisements, product promotion, and job advertisements (Srinivasan, 2014). On the other hand, job seekers, customers, and potential market for new products are confined on social media platforms and therefore increasing interaction between employers, manufacturers, distributors, and customers. The large coverage of social media platforms guarantees an opportunity for the producers to reach consumers through marketing, provide employers with ease access to potential employees in a short span of time, and creation of a link between distributors, retailers, and manufacturers (Hajli, 2015). Facebook, twitter, LinkedIn, Instagram and YouTube are some of the most common social media platforms applied in the business world today.

The Gross Domestic Product (GDP) of the country is influenced by social media platforms. GDP accounts for all the market value of the final goods as well as services produced within the nation's borders over a year (Palacios-Marques et al., 2015). Social media platforms have increased the knowledge of the products and increased the accessibility through provisions of ease product access points which boosts the supply of the products in the market. On the other hand, the products offered are improved constantly in relation to customer reviews which are provided on social network platforms. This increases the total sales which result in an increase in production rates. Employment opportunities are created with the increase in demand of the products in the market. In addition to the impact of market coverage to job opportunities, social media also provides job opportunities for the specific social network handlers. Additionally, social media contributes to creating a job advertisement platform that reaches out to the wide coverage of qualified workforce to work in different economic sectors (Hajli & Sims, 2015). The salaries payed to the employees improve the country's GDP.

Social media platforms are associated with increased public spending. The provision diversification of products in the market provides the consumer with choice. Additionally, products are brought to the customer through online payment procedures which increases the consumption of the products. The role played by social media in product advertisement, and promotion increases the product market and the consumption scale which results in increased public spending.

Organizations are therefore tasked with deploying various market segmentation strategies which take into account the various markets served in terms of demography, taste and preference and the prevalent social media platform that reach out a larger market coverage (Hajli, 2015). The increase in market coverage may result in improved sales as well as a raise in the production rate. Regarding employment opportunities, organizations can deploy professional social media platforms such as LinkedIn to obtain high profile and qualified employees. Facebook and twitter are also used widely in the job advertisement. People also create and promote a personal brand on social networks.

Economic development, growth in high-tech industry and innovation, human capital, openness and diversity, and creative class, as well as working class, are all linked to social media (Palacios-Marques et al., 2015). These factors impact on the overall income of the country. Human capital is associated with the number of bachelor's degree graduates or educated adults which improve the workforce supply in an economy. Social media is common in organizations with the high-tech application and significant innovation rate. Therefore, the use of social media promotes innovation and high-tech applied in production which improves the production level. The creativity of the working-class group is tested along with the application of social media. New applications of different technology are shared on social media platform and therefore diversifying opportunities globally. Openness and diversity result in sharing of important ideas as well as opening up the market and the innovation field for new ideas from different people. This gives the marginalized groups an opportunity to present their opportunities to different stakeholders. Sharing of diverse information on social media creates awareness and sensitization to different people in the world and therefore creating an equal opportunity in improving the global economic state (Palacios-Marques et al., 2015).

The global economy is constantly fueled by the social media through the democratization of information, product promotion which extends knowledge of different brands beyond borders, and creation of employment of opportunities (Schivinski, B., & Dabrowski, 2016). The consumer base spends an average of 9-hours a day online and therefore making the social networks the appropriate avenue to access the consumers rather than the use of old tradition customer access methods. As opposed to the old traditional methods of product promotion and marketing where the producer had to meet an extra dollar for online advertisement, organizations can adopt their own promotional adverts on their own social media platforms and access a significant customer coverage (Srinivasan, 2014). In this case, the barriers to accessing the product market and meeting new customers are eliminated. In that light, the social media has promoted the business and improved the product markets.

Marketing is one area that has benefited immensely from social media. The connection created among families, friends, marketers, brand ambassadors and celebrities improve the functioning of businesses. Consumer feedback provides other customers, channel partners, competitors and investors with important information which results in improved quality of production and customer satisfaction.

Customer feedback is important to stakeholders and investors. The performance of a product can be evaluated by consumer feedback and therefore allow potential investors to evaluate the areas of concern in meeting the maximum output of the product (Saxton & Wang, 2014). The changing market demands can be addressed with frequent alterations of the social media adverts. The flexibility of social media in readjusting the customer access strategy equips business in the competitive mood adopted by the current business world. In this light, organizations maintain long-term market dominance. The access of social media platforms across the world increases the market coverage promoting an international business (Saxton & Wang, 2014). Knowledge of different products from diverse countries spreads over the media and therefore promoting the access of the products to foreign markets. This increases the generation of foreign currency. However, uprising industries may struggle to rise. Well established companies may conquer the market by denying young companies rising opportunities. Competition from international companies such as Japan and European Automotive industry may curtail the growth of US automotive industries. On the other hand, the market for the local workforce is likely to face competition from Asian, European and African counterparts. The advancement in technology by the Chinese industries pose a threat to the market competition in the telecommunication industry. Russian telecommunication industry shows significant advancement which results in higher market competition for telecommunication services. Tourism industry can also face a wide range of competition from global competitors (Dijkmans et al., 2015).

A decade ago, social media platforms were mainly used for social interactions but not for business purposes. Legitimization of social media communication has however enhanced the use of social media for business communication. The U.S Trade and Development Agency (USTDA) puts in use the social media opportunities in creating employment in export developing markets.

Conclusion

Social media plays a big role in the economy of the country. It impacts on information democratization, economic distribution control and provision of new ecosystems. Information democratization improves the public knowledge on organizations and their products. Facebook and Google control over 60% of media spending which impact on the distribution control. New ecosystems are created from social media on which entrepreneurs build off from as well as creation and promotion of job opportunities (Dijkmans et al., 2015). The issue of fake news can be regulated through legislation. Fake news affects the efficiency of social media platforms in disseminating relevant economic information. Policy makers can come up with legislation that guards against malpractices that hamper the effective operation of the social media platforms in public sensitization and education (Allcott & Gentzkow, 2017).

Social media platforms are on the rise with most youths and adults embracing their presence. The wide range of information along with the population diversity increases the scope of coverage. Most people spend an average of 9 hours a day online making the internet the most suitable avenue to reach out to consumers. Social media is the epicenter of the success of business opportunities in future. The fun in the social media content eliminates boredom, through entertainment which causes the attachment to social media content. This promotes the large audience coverage to social media content.

Allcott, H., & Gentzkow, M. (2017). Social media and fake news in the 2016 election. Journal of Economic Perspectives, 31(2), 211-36.

Dijkmans, C., Kerkhof, P., & Beukeboom, C. J. (2015). A stage to engage: Social media use and corporate reputation. Tourism Management, 47, 58-67.

Hajli, N. (2015). Social commerce constructs and consumer's intention to buy. International Journal of Information Management, 35(2), 183-191.

Hajli, N., & Sims, J. (2015). Social commerce: The transfer of power from sellers to buyers. Technological Forecasting and Social Change, 94, 350-358.

Palacios-Marques, D., Merigo, J. M., & Soto-Acosta, P. (2015). Online social networks as an enabler of innovation in organizations. Management Decision, 53(9), 1906-1920.

Saxton, G. D., & Wang, L. (2014). The social network effect: The determinants of giving through social media. Nonprofit and Voluntar...