McKinsey Weighs In on the Future of the Social Economy


McKinsey & CompanyDespite the popularity of social media with businesses, new research from McKinsey suggests that businesses are leaving value on the table, to the tune of billions of potential dollars. When McKinsey released new research this July on the changing face of the social economy dubbed ‘The social economy: Unlocking value and productivity through social technologies’, we eagerly devoured it. We present some of the key takeaways from the report below:

Adoption and Benefits

The report revealed fascinating figures around social media adoption and business benefits realized. Consumers have adopted social technologies, defined as products and services that enable social interactions in the digital realm, at an unprecedented speed and scale. In fact, social technologies have been adopted at a faster rate than any other media technology. While it took commercial television 13 years to reach 50 million households and Internet service providers three years to sign 50 million subscribers, it took Facebook just a year to hit 50 million users and Twitter – a total of nine months.

 

However, while 70% of companies use social technologies, only 3% report deriving substantial benefit from this usage across all stakeholders – customers, employees, and business partners. More broadly, 90% of those companies who use social technologies report some business benefit from them. It’s clear here that businesses can better leverage social technologies to drive more value from their investments.

Influence on Social Commerce

McKinsey reports that up to 1/3 of consumer spending is subject to influence from social shopping. This growth indicates the almost primal appeal of social technologies, which bring speed, scale, and economics of the Internet to social interactions. Consumers can now rapidly search for, find and compare various offerings for their needs. Combine that information transparency with the ability to garner peer feedback on potential purchases and you develop a very attractive market for online shopping.

Economic Impact of Social Technologies: $900 Billion to $1.3 Trillion

McKinsey identified ten specific ways where social technologies can add value to businesses.  These value-added levers include:

  • Product development – Use social technologies to derive customer insights and co-create product
  • Marketing and sales – Use social technologies to derive customer insights; for marketing communications and interactions; to generate and foster sales leads; social commerce
  • Customer service – Use social technologies to provide customer care

McKinsey estimates that the use of social technologies can contribute $900 billion to $1.3 trillion in value (based on estimates across four industry sectors), with $500 billion added from marketing, sales and after-sales support activities. Specifically, consumer goods companies, with their dependence on brand recognition, can use social technologies across all value chain steps to recognize margin increases of as much as 60%. McKinsey cautions that simply shifting advertising and consumer insights budgets to social media will not suffice; advocating instead for well-planned and well-executed programs which incorporate non-social components such as mass media to capture the potential value of social technologies.

Truly capturing the business value will be a challenge for most enterprises, as they will have to transform their organizational structures, processes, and cultures to become “extended networked enterprises.” Extended networked enterprises connect both internally as well as externally with customers and partners. For these technologies to deliver value, enterprises must embrace information sharing and create cultures of trust and cooperation.

Business Opportunities

The McKinsey study also highlights areas in which business can use social technologies to improve. For instance, many companies have found these social technologies can generate rich consumer insights cheaper and faster than traditional methods. Companies are tapping into what consumers do and say to one another on social platforms, gathering unfiltered feedback and behavioral data (e.g. do people who like this movie like that brand of soft drink?).

Additionally, leveraging of social platforms provides the potential to tap the great “cognitive surplus” of society by using leisure time for creating content and collaboration, rather than consuming. McKinsey refers to the growth of self-publishers and video creators, who add their own content to the social sphere.

Beyond 2012

As we move beyond 2012, we expect to see companies further leveraging emerging social technologies to drive distinct and measureable business value. We believe marketers will use social marketing to identify new prospects based on sophisticated monitoring, profile collection and social scoring.

 

By Mike Lewis | September 4, 2012

Read more: http://www.socialnomics.net/2012/09/04/mckinsey-weighs-in-on-the-future-of-the-social-economy/

 

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The global competiteveness review 2012-2013


Global competiteveness review 2013

Pdf format:

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf

 

Part 1: Measuring Competitiveness 1
1.1 The Global Competitiveness Index 3
2012–2013: Strengthening Recovery by Raising Productivity
by Xavier Sala-i-Martín, Beñat Bilbao-Osorio, Jennifer
Blanke, Roberto Crotti, Margareta Drzeniek Hanouz,
Thierry Geiger, and Caroline Ko
1.2 Assessing the Sustainable Competitiveness 49
of Nations
by Beñat Bilbao-Osorio, Jennifer Blanke, Roberto Crotti,
Margareta Drzeniek Hanouz, Brindusa Fidanza, Thierry
Geiger, Caroline Ko, and Cecilia Serin
1.3 The Executive Opinion Survey: The Voice 69
of the Business Community
by Ciara Browne, Thierry Geiger, and Tania Gutknecht
Part 2: Data Presentation 79
2.1 Country/Economy Profiles 81
How to Read the Country/Economy Profiles …………………………….83
Index of Countries/Economies ………………………………………………..85
Country/Economy Profiles ……………………………………………………..86
2.2 Data Tables 375
How to Read the Data Tables ……………………………………………….377
Index of Data Tables ……………………………………………………………379
Data Tables ……………………………………………………………………….381
Technical Notes and Sources 519
About the Authors 523
Acknowledgments 527

China boosts economy with £99bn!


Stock markets across Asia soar on hopes world’s second largest economy will drive global recovery

 

China has announced a trillion yuan (£99bn) of infrastructure projects in a bid to revive economic growth, raising hopes that the world’s second largest economy will drive a recovery across the globe.

Stock markets in Asia soared on the news, with the main Chinese share index up 3.7% on the day. Markets were already buoyed by the announcement of the ECB’s plan to save the euro by buying up the bonds of distressed eurozone countries in unlimited quantities.

Over the past two days, Beijing has announced plans to build highways, waterways, urban rail projects and waste water treatment plants, estimated to cost more than 1tn yuan, some 2% of China’s total economy.

The Chinese government did not describe the investments as a stimulus package, but analysts said the approvals signalled a shift in policy. Zhang Zhiwei, economist at Nomura, said: “Apart from the large sizes of the projects, the announcements were all made in two days, which is very intense. It signals a change in policy stance, which is now much more proactive.”

He said the projects were likely to begin in the coming months and the impact could be reflected in fourth quarter GDP. Chinese growth slowed to 7.6% in the second quarter, its lowest in three years, and grim economic data out in the past few weeks suggests the slowdown could be even steeper in the third quarter.

The Chinese government has been expected to act to boost growth for some time, but has been wary of reinflating a property bubble and overstimulating the economy. It is thought the leadership has also been preoccupied with the once-in-a-decade leadership change taking place later this year.

Crucially, these new projects have been signed off by the central planning agency, meaning they are likely to proceed. Local governments in China have announced around 7tn yuan worth of projects over the past two months but analysts said funding shortages would scupper the plans. Once projects have Beijing’s approval, however, funding is seen as a formality.

Read more: http://www.guardian.co.uk/