Information Society and Media Commissioner Viviane Reding argued in a speech at the Safer Internet Forum in Luxemburg today that social networking sites can have a positive impact on European industry by boosting productivity and internal communications.

"The result is that clients are for the first time truly engaged in a company's product innovation and development services, which should eventually lead to an increased client loyalty and more purchases," she said.

"Other companies have opened specific networking sites for their own employees, giving them the possibility to operate as a community no matter where they physically are.

"This gives employees the chance to feel involved in company decisions which helps engagement and increases productivity."

Reding added that social networking sites can provide new opportunities for advertising and recruiting new members of staff, and may even boost the success of the mobile web.

However, she warned that concerns still exist around child safety on these sites.

The statement on social networking sites rounds off a busy week for the European Commission in terms of technology.

Yesterday, the Commission announced plans to ensure that all Europeans have access to broadband internet by 2010.

Earlier this week, Reding unveiled proposals to reduce the cost of text messages and data services by as much as 60 per cent by July 2009, while a single telecoms market for Europe was voted in on Wednesday.