Is Social Media Driving the Economy?

Social media is redefining the landscape of everything we do from the way we connect to family and friends, how brands and celebrities capture attention, to the way business and journalism function. Hundreds of millions of people across the world use social networks like Facebook, Twitter, and LinkedIn. If any technology promised to shatter the constraint of geography, overcome distance, and flatten the world, social media would be it.

But a quick look at the map below, from the NetProspex 2010 Social Business Report, shows this is not the case at all, certainly not for the United States.

The map shows the 50 leading social media cities in the United States. It is based on data collected by NetProspex on social media adoption and used by more than two million business professionals.

The level of geographic concentration is pronounced, though the leading social media metros are not surprising. San Francisco, San Jose, and Silicon Valley, top the list, with New York City, Austin, Boston, Seattle, Denver, Salt Lake City, L.A., and Atlanta rounding out the top 10.

But what are the characteristics of America's leading social media centers? What factors are associated with its greater adoption and use in certain kinds of metros?

With the steady statistical hand of Charlotta Mellander, I decided to take a look at a range of factors that might be associated with geographic centers of social media. We examined key factors like economic development and income; clusters of high-tech industry; the human capital; creative class vs. working class job structures; the presence of artists, musicians, designers, and other artistic creatives; and openness to diversity and tolerance for immigrants and gays and lesbians (see the note on sources at the end of this post). We ran a basic correlation analysis and generated a series of scattergraphs plotting social media centers against these factors.

The chart above summarizes the key findings of our analysis. These are preliminary, exploratory analyses that simply point to associations between variables. We don't make any claims about the direction of causality, and we acknowledge that intervening variables may come into play. So what do we find?

Economic Development and Income: It stands to reason that the adoption of the use of social media at the city level would rise alongside local incomes and the overall level of economic development. And that is what we find. Social media is associated with both economic output and income. The correlations for each are substantial (in the range of .6 and .7).

High-Tech Industry and Innovation: It also stands to reason that social media would be more commonly used in places with higher levels of high-tech industry and higher rates of innovation. And again that is what we find. The correlation between social media centers and concentrations of high-tech industry is about the same as for economic development (ranging from .6 to .7). While social media at the city level is correlated with the rate of innovation, measured as patents, the correlation is more modest (about .4).

Human Capital: Social media use is also associated with higher levels of human capital, measured as the share of adults with a bachelor's degree or more education (with correlations in the range of .55 to .6).

Creative Class vs. Working Class: The class structure of the economy also seems to play a substantial role. Social media centers are also associated with higher concentrations of creative class jobs in fields like science and technology; business, management, and finance; arts, culture, and entertainment; and health care and education (with correlations in the range of .55). Social media centers are also significantly associated with artistic and cultural creatives specifically (with correlations ranging from .525 to more than .7). On the other hand, places with a larger blue-collar working class labor force tend to have lower concentrations of social media (with correlations ranging from .-3 to nearly -.4).

Presented by

Richard Florida is Co-founder and Editor at Large of and Senior Editor at The Atlantic. He is director of the Martin Prosperity Institute at the University of Toronto and Global Research Professor at NYU. More

Florida is author of The Rise of the Creative ClassWho's Your City?, and The Great Reset. He's also the founder of the Creative Class Group, and a list of his current clients can be found here

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