How social network software can save the world

I see a number of applications of social network software to policy issues. One of the great challenges to economic growth that many emerging economies face is that the society is highly stratified. If you are born poor in Brazil, you have very limited access to capital, international trading partners, lawyers, government officials, or other resources helpful to building a business. However, let us say that you do know just one Brazilian who is better educated and has access to the wealthier members of society. Spoke and similar services can help you to leverage your toeholds into the wealthier classes and thereby expedite economic growth. Some of the academic studies of poverty have shown that the shortage of social ties between the poor and their potential employers and role models is one of the key drivers of continued poverty.

Another application of social network software is to facilitate international trade. One of the reasons why certain ethnic tribes, e.g., the “bamboo network” of overseas Chinese, are so successful as international traders is that they are the beneficiaries and members of an international web of trusted relationships. By contrast, a sixth-generation American sitting in Minnesota is liable to feel wary of doing business with strangers in the Philippines, whom he does not know or trust. Free trade among countries is clearly a great driver of economic growth, but the Minnesotan and the Filipino may not complete a mutually beneficial business deal because they do not trust one another enough. Social network software can reduce this “trust friction” among countries. If the Minnesotan trusts a local Filipino businessperson with whom he has developed ties, the relevant software tools can help the Minnesotan to get access to the entire Philippines through that local Filipino.