How Will the Recession Affect Social Technology Job Growth?

The recession has had an undeniable impact on the overall economy, but it is unclear how it will affect positions working specifically with social technologies. Many job cuts in late 2008 have come from industries with considerable stake in either physical goods or production, such as manufacturing and publishing. Even those in the information economy have been altering their strategies. Sun has moved away from server sales, and Google is working more with distributed “cloud computing” in an attempt to diversify.

The biggest question is to what degree companies integrate social media in their overall digital strategies. This seems to be stable or growing. In the most recent Online Community Strategy blog post, Bill Johnson identified 55% of respondents in a recent survey (N=90) as being in companies whose “internal stakeholder’s considered their online community more valuable because of the current economic pressures.” Use of social technologies such as blogs, viral marketing, and social network sites is comparatively inexpensive, and widely viewed as the next logical step for certain industries, such as entertainment. That said, it is unclear to what degree this consideration equates with job growth. For instance, it is unknown how many positions in community management and cultivation are new and how many are converted from old positions, or at what level these positions exist. They range from the relatively low-level – employees crawling MySpace in search of risqué content in violation of TOS – to managerial and higher positions.

One certainty is that venture capital money is more difficult to come by, as VCs are unable to unload companies they have invested in. Two polls in early 2009 showed that the number of IPOs fell by 90% between 2007 and 2008, with none in the last quarter of 2008. Also, new ventures and established companies alike have been forced to downsize in the recession. Negroponte’s One Laptop Per Child initiative recently cut their work force in half. Sun plans to eliminate between 15 and 18 percent of its workforce in the next year. While VC money is available, it’s going to be increasingly competitive. It might be time for entrepreneurs to either move into either bootstrap mode, or attach themselves to a more established company interested in expanding into the digital space.