Could increasing your online connections to friends and business contacts benefit your entire city? Maybe. Higher LinkedIn connectedness in a metropolitan area—the number of people each user is connected to, on average—is associated with faster job growth there. From 2010 to 2014, in the wake of the Great Recession, the U.S. metro areas with the highest average number of connections per user had more than twice the job growth of the least-connected areas, according to a study sponsored by LinkedIn. Of course, LinkedIn isn’t the only way for people to connect online, but the study’s author, Michael Mandel, says it’s reasonable to assume that where there are more LinkedIn connections, there are more social-media connections of all types. Four-year job growth in the most-connected U.S. metro areas: 8.2% In the least-connected: 3.5% Mandel, the president of South Mountain Economics, took the average number of connections per member in each of 275 areas and created a connectedness index ranging from 0 to 1. He then calculated the four-year job growth in each area. He found that each 0.1 rise in connectedness was associated with an average increase of about one percentage point in job growth. Was this a true correlation, or were other factors responsible? For example, could the results reflect the tech boom in cities such as San Francisco and New York if tech workers are especially heavy users of LinkedIn? To answer that question, Mandel filtered out tech users and redid the analysis; the association between connectedness and job growth remained positive and significant. He controlled for other factors as well, including region size. This limited study didn’t allow Mandel to determine whether there’s any causation here—whether a high density of connections has anything to do with job growth. But he believes that connectedness probably exerts an “accelerator effect.” A higher density of connections, he says, might spark new jobs through better exploitation of business opportunities—for example, an entrepreneur could tap online contacts for help with finance or marketing. It might also facilitate the matching of workers with available jobs. The study suggests, too, that there may be better ways to measure economic health than the methods currently in use. Policy makers still rely on metrics, such as monthly unemployment rate and the growth of national output, that go back to the early decades of the 20th century—indicators that are “too blunt to deal with today’s highly networked world,” Mandel says. The research on connectedness offers the possibility that other kinds of statistics might give us a clearer idea of what goes on among job seekers and businesses and why some regions grow faster than others. And if future research can demonstrate that connections stimulate growth, we might have a new tool for creating jobs, Mandel speculates. Areas that are able to help residents extend their personal networks could see an employment payoff. Based on “Low Prices Are Just the Beginning: Price Image in Retail Management,” by Ryan Hamilton and Alexander Chernev
