I published this in the Future of Communities a week ago.

It is absolutely facinating that some metrics can capture the
imagination of the masses very quickly. Some examples include the
airline industry (which I am told before the advent of SouthWest) did not care about cost per passenger
mile until this new metric has become a key determinant of
profitability. Similarly the Hotel industy used to care more about
Occupancy Rate until a few years ago, when RevPar became a more important number.

The question that I have been asking several experts in the community area is:
At the macro level what impact will communities and social networks have in economic terms?

I have heard several responses which I am trying to summarize below,
but to be honest I have not done a detailed assessment enough to claim
what I am sharing below is comprehensively thought out.

1.  Employee Productivity:
This is a number that a few Wall Street analysts have been tracking for
a few years. In simple terms take the total revenue, divide it by
number of employees. Since internal communities (collaboration
networks) will allow for employees to tap into the large knowledge,
contacts and networks of all the employees of the organization, we
should see a vastly improved employee productivity rate for companies
that adopt communities faster than those that dont.

2. Transaction Friction Loss:
Several prominent thinkers and experts have talked about reducing the
friction “tax” that is paid due to inefficiency of information
availability. In simple terms, I know something about X, but its
useless to me for most parts. Someone else is looking for information
about X but she knows how to monetize it. How do we connect her with me
at the quickest time to monetization? Google, as an example has reduced
the friction from lack of information (to a certain extent). Its not an
easy metric to track or come up with, but this metric should reduce
since networks will reduce the time, effort and money required to
connect each other.

3. Degree of Seperation. Degree, Network and Betweeness Centrality.“Social
network analysis [SNA] is the mapping and measuring of relationships
and flows between people, groups, organizations, animals, computers or
other information/knowledge processing entities. The nodes in the
network are the people and groups while the links show relationships or
flows between the nodes. SNA provides both a visual and a mathematical
analysis of human relationships. Management consultants use this
methodology with their business clients and call it Organizational
Network Analysis [ONA].”

Measuring how connected people are should reduce the degree of
seperation with communities from 6 to less than 4 is what many people
are expecting. The next question is:

“What is the value of reducing our degree of seperation?”

What do you think?