The Facebook Economy

What a difference a year makes. This week's second annual SoCap09 conference in San Francisco is serving again this year as Ground Zero for hundreds of social entrepreneurs bent on using social media and Web 2.0 technologies to invent a new economy—one that's focused more directly on global problem-solving. But unlike last year, when the collapse of the financial markets made the notion of Net-powered corporate altruism sound like a pipe dream, this year's gathering is striking an entirely different chord.

The talk among the 800-plus delegates gathering now at Fort Mason is all about finding proof—devising ways to use new Web tools to measure the social value and profitability of the hundreds of new socially-conscious businesses being invented in the wake of last summer's meltdown. In her opening keynote, Sonal Shah, the chief of the new White House Office of Social Innovation and Civic Participation, pledged growth capital to the most impactful of these new startups.

"A coherent industry seems to finally be coming together around the idea of social enterprise," said Economist writer Matthew Bishop, citing the half-dozen or so new Web platforms being launched in recent weeks and months purporting to be able to measure impact. [Kevin Jones, a co-founder of the SoCap conference, was using the conference to unveil his own version, called The Global Impact Investing Rating System (GIIRS), which includes a set of "impact reporting and investment standards"—an effort to define the main terms used in the social enterprise space. Says Jones: "People argue all the time about what constitutes a social impact. GIIRS is all about trying to settle those arguments."]

To be sure, many SoCap attendees believe they are building no less than a new "economy of integrity" fueled by social media, says Jonathan Greenblatt, a SoCap presenter and president of All for Good. "This new economy is like shoots growing out of the ground," he says, "and social media will allow this economy to take off. It will both cohere this moment of opportunity and catalyze it." Social networking is evolving into mobilization, he added, and brands are becoming increasingly focused on doing right by their customers' social networks. ["In a networked world where everyone is adjacent and everything can be known, we are seeing increasing evidence of the inequities around us," he told a group of Internet activists attending Mashable's social good conference on Friday. "When you are actually adjacent to ... the have-nots—when they know what we have—it puts a burden on the 'haves' [in society]." Social enterprises, he says, are "giving us different answers than the ones we've heard before to the questions we are facing."

Indeed, say Greenblatt and others, we are compelled to invent new alternatives. Steve Newcomb of Virgance, a SoCap09 presenter, told conferees earlier today that the buzz around social enterprise is now "more on par with the industrial revolution than the dot-com boom."[Dennis Whittle, CEO of globalgiving, says "we're in a period moving from Web 2.0 to Web 3.0, combining (in the social action space) online discussions with offline engagement."] Given the rapid pace of Web-powered innovation, said Sonal Shah, the director of the new White House Office of Social Innovation, "government should be supporting grassroots innovators, not replacing them."

The conference continues through Thursday. Watch this space for highlights and follow the conference on Twitter, #SOCAP09.

--By Marcia Stepanek

(Illustration: Miroslaw Pieprzyk)