A Demos report on social networking commissioned by Orange has reached the unlikely conclusion that social networks provide the best hope for companies in the economic downturn.

The report interviewed workers from six companies - including Orange but not limited to those in the IT sector - about how professionals are using social networking, and what lessons can be learnt from those that are using it successfully. The conclusions, which should come as no great surprise, are along the lines that social networking is a useful tool which shouldn't be restricted within an organisation.

Of course, someone like Orange is unlikely to publish something saying we should spend more time having face to face meetings, but anyone who's used instant messaging in a business environment will know how valuable it can be, particularly for dispersed teams or home workers. In fact, the way in which the report lumps IM together with social networking websites is something of a problem with the report, as the business case for the former is much more compelling than allowing employees to spend their days updating Facebook entries.

The important thing, emphasises the report, is not to distinguish between personal and professional networks. Some companies are still running instant messaging systems limited to employees, reducing their value in a real world where contacts span company borders, and demanding that employees maintain two separate networks. The report argues against this, pointing out that "distinctions between purely personal and professional life are becoming increasingly blurred and that this is particularly the case with younger employees".

Smokers will already know the value of being part of an informal network, albeit a declining one, which often provides channels of communication closed to others. For workers depending on their knowledge and problem-solving there is real value in being able to consult with friends as well as colleagues, though the report acknowledges that too much recreational use should be stomped on quickly.

So no massive surprises, but if you're looking for evidence to back up your argument that Facebook should be allowed through the corporate firewall then this (pdf) is a good place to start.

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