What is the social effect?

We all live within the framework of society. It can be huge, such as international or inside the state, and maybe quite insignificant: a family or a small circle of friends.

What is the social effect?

Modern business sees its ultimate goal of increasing profits and, as a consequence, the increase in the cost of capital. And the producers, intermediaries, and retailers adhere to a simple rule: they bought for the minimum price, sold for the maximum, put the difference in their pocket. This is a kind of economic effect from the transition to a market economy and a capitalist way of managing and allocating resources.

The impact of market economy on society

The consequences of a market economy vary in the short and long term. Firms compete among themselves, fighting for the buyer, improving the product and advertising policy, produce a positive social effect, attracting additional labor. Their efforts force the development of infrastructure in the region, make public the machinations of unscrupulous competitors.

Large enterprises tend to constantly expand their sales markets. To do this, start to produce more goods than the consumer really needs. The price of the goods is reduced, and to compensate for the losses, the manufacturer begins to experiment with the technology, cut costs, look for more affordable raw materials and components. Demand increases, and consumer confidence declines. There is already a negative social effect. But the question does not end with consumers and manufacturers.

Through contact audiences, joint projects and investment, business has a tremendous impact on the social sphere. Youth culture, world outlook, vital values are changing . The policy adapts to existing trends. All major scientific research and development is financed by the private sector and forced to proceed strictly in the specified direction. The social effect is determined by the scale of the intervention of entrepreneurship in public life.

Social consequences of economic activity in time

Often this intervention is point, single, but over the years it is peculiar to accumulate and strengthen its positions. The development of computer technology in less than ten years has radically transformed the existing reality. The doors to innovative fields of medicine, robotics, aircraft construction, rocket building, automotive industry and, of course, the IT industry opened. At the same time, the total degradation of youth began, the military conflicts, cyber attacks, the number of terrorist threats increased. Not everything has a direct connection with the advent of computers, but electronic technologies have definitely made a powerful social effect, the consequences of which will be visible not only the next decade. In addition, the development of technology always leads to a change in the social sphere, regardless of the nature of such changes.

The social effect is

First of all, it is necessary to understand the very concept of this phenomenon. Economic dictionaries and textbooks give different interpretations to this definition, but they agree that the social effect is the result of the firm's activity in the fields of the national economy, which is reflected in the development tendencies of the society and does not lend itself to precise calculation. The enterprise by its actions or inaction changes the social environment, and these changes can be easily identified, both positive and negative.

Positive moments of social effect

Other researchers believe that the social effect is a kind of external effect - a visible reaction of society to changes in the internal environment of the functioning of the enterprise. It can be manifested in a positive way:

• Departure from manual manual labor;
• Reduction of work time;
• Growth of the creative component in the creation of goods and services and their promotion;
• Increase of the material standard of living of the able-bodied part of the population;
• Increased interest in environmental protection;
• Healthy way of life and careful attitude to the body and its needs;
• A variety of entertainment and cultural knowledge.

Negative moments of social effect

In contrast, it is worth mentioning about the visible negative aspects:

• Rising unemployment;
• Mixing and assimilation of crops;
• Income differentiation and polarization of the population layers: the difference between the way of life of the rich and the poor becomes more and more noticeable;
• There is no need to adhere to traditions and social norms of behavior;
• The increasing role of credit - the popularization of life "in debt";
• Substitution of values and concepts;
• The growth of popularity of the ideology of business: to live is to consume.

How to identify the cardinal changes in society?

The market economy slowly but surely undermines the social sphere, forcing it to think with its own concepts and categories. In statistical reports, you can see the growth of domestic gross product, national income, per capita income, but the real social effect is what usually remains behind the scenes in the annual report. Later, historians will take to analyze this passage of time, mark the starting point, the culmination and development of the consequences. And here and now you need to be content with dry figures.

World famous companies and large domestic market players take care of their prestige and seek to raise themselves in the public eye. Being engaged in socially useful activities, solving significant environmental and social problems, they conduct parallel statistics of growth or deterioration of the situation in the social environment.

Estimated indicators of social effect

1. Decrease or increase in the unemployment rate among the population. There is a numerically pronounced social effect of the project, an example is simple: the city-forming factory was closed, hundreds of people were left without work and means of subsistence, the indicator decreased. In place of the old factory built a new one - the figure is growing again.
2. Improving the quality of ecosystems. In this case, the economic effect implies a social effect. Economically, this indicator is expressed in increasing the company's costs for environmental activities, the purchase of innovative equipment for a closed production cycle and the payment of environmental fines.
3. Access to the public benefits and entertainment. Here we are talking about increasing the number of cafes, restaurants, cinemas, beauty salons, nightclubs, highly specialized shops, entertainment complexes, etc. The alternative to the absolute amount of "establishments" is the growth of a part of the income that the population spends on entertainment and on the domestic service industry. Usually these indicators are calculated together.
4. The growth of the poor in the total population with constant incomes. It is easy to calculate in absolute and percentage terms. And it serves as an indicator of the negative social effect. When the country, on the one hand, growing unemployment, and on the other - increases the capital of the richest layers of society, there is an economic imbalance. Money depreciates, jobs are reduced. On the accumulated money an employee can no longer acquire what he wants, and his social status falls. The poverty line is moving away, social tension is growing, social development is gaining a new turn.

You can also calculate such indicators as GDP, GNI, turnover balance and other macroeconomic indicators, but they are practically useless in determining the social effect, since they suggest measuring the economic rather than the social welfare.

Global manifestation

The change in the economic policy of a large enterprise affects not only the demand for its goods, but also suppliers from other industries, fluctuations in the labor market, public sentiment, fashion, and the political course of the region.

The social effect of the national scale project, such as the construction of the Baikonur cosmodrome, determined the prospects for the development of the whole region and made significant amendments to the country's political course. The construction and the first tests of the cosmodrome gave new jobs, a boost in the development of space technology rocketry, but there were also social upheavals and high-profile trials.