META Meta Platforms Inc

By Paul Hannon 

Social-media giant Facebook Inc. is teaming up with the World Bank and the Organization for Economic Cooperation and Development to pioneer a new way of collecting data, taking the first step on a path to what they hope will be broader, less expensive and more timely insights into the state of the global economy.

The three partners on Wednesday launched a new measure of business sentiment based on questioning companies that use their Facebook pages to connect with customers. Known as the Future of Business Survey, the report has been in testing since February and received responses to 15 queries from a total of 90,000 small and midsize firms across 22 countries.

Its first public release shows that those businesses are more optimistic about their prospects than other companies surveyed by more traditional means.

But the real interest for the three partners is the potential to drill down into the factors that affect the growth of small businesses, a process that until now has involved great expense and time, since it involves face-to-face interviews by polling professionals that are carried out over many months and are infrequently updated.

"What I feel is appealing about this particular survey is that it's potentially a more powerful tool for getting information more quickly and at a fraction of the cost," said Agusto Lopez Claros, director of the Global Indicators Group at the World Bank.

Even in developed countries with well funded and equipped statistics offices, timely information on very small businesses is hard to come by. In developing countries, that scarcity can be more acute. The ability to connect with business owners via Facebook or other social-media platforms could make it possible to gather such information, and acquire a more complete picture of what is happening in those economies.

The new approach to data gathering could even enable some smaller developing countries to skip the process of enlarging their statistics agencies. That is an opportunity Mr. Lopez Claros compares to the advent of mobile telephones, which enabled many African countries to skip the construction of expensive fixed-line infrastructure and improve communications at a fraction of that cost.

It could also help identify emerging obstacles to the expansion of smaller businesses early enough to aid their removal, which could help boost economic growth.

"When you listen to small businesses, you can find new ways to help them grow," said Nicola Mendelsohn, Facebook's vice president for Europe, the Middle East and Africa. "This is just the beginning of what we see as a long term effort."

For now, neither the World Bank nor the OECD see the Facebook project as supplanting their traditional data gathering. One immediate obstacle is that Facebook doesn't operate in China.

"That is why we cannot just rely on this," said Martine Durand, the OECD's chief statistician. "We need to continue to look at regular sources. China is a big limitation if you want to understand what's happening in the global economy."

One of those regular sources is the OECD's annual report on entrepreneurial activity, also released Wednesday. It found that the pace at which new businesses are being created remains below precrisis levels, but has begun to pick up across many of the Paris-based research body's 35 members.

Write to Paul Hannon at paul.hannon@wsj.com

(END) Dow Jones Newswires

September 28, 2016 12:16 ET (16:16 GMT)

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