Social media and business: Tweeting while Rome burns?

Paul Marks, senior technology correspondent

Businesses across Europe expect their use of social network technology to boost their ability to collaborate, innovate and hire the smartest people, according to a Google survey.?But the flagging economic performance of the most enthusiastic social-network-using nations suggests these expectations may go unmet.

Funded by Google UK, market researcher Millward Brown of London asked 2700 people in seven European countries a raft of questions about how they think always-on connectivity with their customers (and their rivals, from whom they can poach staff) will impact their businesses. Some 63 per cent of respondents say using LinkedIn, Facebook and Twitter has the potential to change the way they work, with 70 per cent saying they have already changed some strategies because of it. Nearly 20 per cent say productivity will be boosted by their ability to better understand what customers and retailers want.

Just over half say companies who do not embrace social networks will go under. And email, that old business staple, looks set to take a hiding, with some 31 per cent saying emerging social tools have already slashed the volume and length of their internal and customer emails.

"We now have data validation on why people are using these social networking tools," says Thomas Davies, of Google UK. "Whether its for Google+, Facebook, Twitter, Pinterest, shared Google docs or other networks, what we are interested in is quantifying how companies expect to add value using social networks. We've found a tight coupling between a company's ability to collaborate and its ability to innovate."

But the research also revealed that the nations whose businesses are currently the most enthusiastic users of social networks are Spain and Italy - whose economies are flagging the most?(measured by GDP per capita in 2011)?out of the seven countries surveyed (see graphic). While this is only correlation and not causation, it at least raises a question over the ability of social tools to boost business.

"This is just a first dip into this subject," explains Allan Hyde, account director at Millward Brown. He says what's really needed to test the business efficacy of social networks are control groups of high-growth businesses who do, and who do not, use social networks. Only this way can their performances be properly compared.

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