Two years ago, I commented in a newspaper article that, “the future will bring the globalisation of free speech, trial by Twitter, revolutions won through interactivity, anonymity as the new celebrity and, for the business world, the realisation that social media is a force to be reckoned with, managed, massaged, even manipulated”.
Some of the predictions I made in the interview were ‘spot on’ and others were not even close. However, this week has certainly confirmed one prediction, that is, we undeniably live in an incredibly hyper-connected world, and social media is driving this. This hyper-connectivity is impacting business in ways no one could have thought possible.
The highly regarded Internet researcher, Mary Meeker of KPCB released her annual Internet Trends report in May this year, noting that both tablet and smartphone shipments have eclipsed and are growing faster than Desktop PC’s ever did. The smartphone has revolutionised the speed in which we can both receive, share and publish information. There are both significant opportunities and risks that come with this. The World Economic Forum 2014 Risk Report makes the compelling point that whilst all these innovations via smartphones, the internet and social media are delivering clear commercial benefits ranging from increased productivity and speedier transactions – the same dynamic, that ‘everything is connected’ including markets, also represents a significant risk and threatens to undermine these gains
The media cycle of today is 24 hours a day, with information and opinion seemingly interchangeable. Whether it is end of year financial results, geopolitical issues, natural disasters or human tragedies – social media is increasingly a source for news and a medium to comment on the news. We have witnessed an amazing shift where the consumer now plays a small role in creating the news, whether by contributing images or comments from any number of social media platform.
The fact that ‘tweets’ are fed into Bloomberg terminals across the globe in the same manner as other traditional market information illustrates how far this ‘need for speed’ and information has come. But of course, social media can be a notoriously unreliable source. The manipulation of the market has been around since its beginning, but it was given a new lease of life by some unscrupulous types who use social media to “pump and dump” shares and on a much larger scale, we have seen the hacking of Associated Press’ Twitter account, which then sent a false tweet suggesting a plane had crashed into the White House, wiping 150 points of the markets within minutes.
Understandably, in large part due to the origins of social media, many still perceive it as a frivolous activity that has ‘little’ to ‘no ‘ impact on the day-to-day to activities of large institutions like banks or the market generally.
It would be unwise to maintain this line of thought, whether it’s the rate of uptake of social media by people across the spectrum of society or the continued growth of smartphone use in developed and emerging markets – the power of information and its speed will only increase in importance and its potential impacts will be felt in more substantive and far-reaching ways than previously unimaginable.
About the authorJames was NSW Young Business Person of the Year (2011) and listed as ‘Australia’s Top Entrepreneurs Under 30’ in 2010 and 2011. He joined KPMG in 2014 as part of its acquisition of SR7.