Social Capital & Sustainable Development

1. Social Capital & Sustainable Development

2. Market Value Model Market Value Financial Capital Intellectual Capital Human Capital Social Capital Structural Capital McElroy’s modified IC map

3. Human Capital • Human capital refers to the value of knowledge, skills and experiences held by individual employees in a firm;

4. Human capital is embodied in the individual • As usually defined, human capital is embodied in the individual, and the national stock of human capital can therefore be thought of as the sum total of the human capital of all those normally resident in its territory.

5. Special Form: Human Innovation Capital • Human innovation capital, is the sum total capacity of individuals to innovate • It is a Subset of Human Capital

6. The Problem of Focusing on Human Capital • The creation of knowledge is clearly a social activity so it is necessary to ask whether a simple aggregation of the human capital possessed by individuals is sufficient. • The development of individual human capital is therefore intertwined with the social and collective development of knowledge.

7. Social Capital • Social capital points to the value of relationships between people in firms, and between firms and other firms. • Trust, reciprocity, shared values, networking, and norms are all things that, according to social capital theory, add value in a firm, or between firms, by speeding the transfer of information and the development of new knowledge.

8. Interdependence • Social Capital relate to a broader concept of Interdependence. • All people have strengths and weaknesses – Interdependence is when we use our strengths to build relationships that help support our weaknesses.

9. Reciprocity • specific: “I’ll do this for you now, you do the same for me later” • generalized: “I’ll do this for you now, somebody else will do the same for me later” • Golden rule: “random acts of kindness”

10. Human vs. Social Capital

11. Special Form: Social innovation capital • Social innovation capital is the collective capacity of a group to innovate. • It originate from human innovation capital and social capital

12. Special Form: Social Innovation Capital • Collection of independent learners and communities of practice who collaborate with one another in self-organizing ways to develop and integrate shared knowledge.

13. Structural capital • Structural capital consists of embodiment, empowerment, and supportive infrastructure of an organization that enhances performance of human capital.

14. Special Form: Structural innovation capital • Structural innovation capital is the value of supportive infrastructure of an organization that enhances and increases the capacity of a group to innovate. • Structural innovation capital is a subset of structural capital

15. Innovation Capital • Innovation capital is the collective capacity of an organization to innovate • It includes • Human innovation capital • Social innovation capital and • Structural innovation capital • Innovation capital is a subset (special form) of intellectual capital

16. Social capital • Social capital consists of the networks, norms, relationships, values and informal sanctions that shape the quantity and co-operative quality of a society’s social interactions;

17. Types of social capital • Three main types of social capital can be distinguished : • Bonding social capital (e.g. among family members or ethnic groups); • Bridging social capital (e.g. across ethnic groups); and • Linking social capital (e.g. between different social classes);

18. Bonding Social Capital • The term “bonding” holds a negative connotation and generally refers to small circles of homogeneous people that do not cooperate with other outside the boundaries of the group.

19. Bridging Social Capital • Bridging social capital is given by horizontal ties shaping heterogeneous groups of people with different backgrounds. • The term bridging refers to the ability of such networks to create “bridges” connecting sectors of society that, otherwise, would have never come into contact. • The common claim is that such relationships have positive effects on the diffusion of information and trust, thus fostering transactions and economic growth.

20. Linking Social Capital • The term linking social capital describes ties connecting individuals, or the groups they belong to, to people or groups in position of political or financial power.

21. Linking Social Capital • For example, civil society organizations allow citizens to come into contact with the institutions to carry out advocacy activities through collective action. • This kind of networks is critical for leveraging resources, ideas and information beyond normal community linkages and, therefore, may play a significant role for social well-being.

22. Corporate Social Capital • Professional associations, labour unions and political parties that pursue the special interests of their members • Caution: Organizations can behave pro-socially as well as anti- socially Olson (1965)

23. The components of social capital • Social networks - who knows who; • Social norms - the informal and formal “rules” that guide how network members behave to each other; and • Sanctions - the processes that help to ensure that network members keep to the rules.

24. Increasing Interest

25. Social capital benefits • Social capital may contribute to a range of beneficial economic and social outcomes including : high levels of and growth in GDP; more efficiently functioning labor markets; higher educational attainment; lower levels of crime; better health; and more effective institutions of government;

26. Social capital benefits • Different types of social capital are relevant to different economic and social outcomes for example: • Bonding social capital is most important to health in early childhood and frail old age • Bridging social capital is most important in adult life when looking for employment;

27. The Importance of Social Capital • If you could wish for 3 things for yourself or for someone you love, what would they be? • Most Frequent Answers: • Healthfulness • Happiness • Longevity

28. Research Shows That • Healthfulness • Happiness • Longevity Are all related to – Social Capital!

29. Social Capital and Health

30. Social Capital and Health

31. Research on Social Capital and Health • More diverse social ties = fewer colds • Stroke victims recover faster and more fully • Protective effect of social capital roughly equivalent to quitting smoking! • Decreases depression and increases happiness • Fewer heart attacks

32. Social Capital and Happiness Geog 3432

33. Trends of social capital • There is evidence that overall levels of social capital have been declining in countries such as the United States and Australia. • Overall levels of social capital have generally been stable or rising in countries such as the Netherlands, Sweden, Japan and Germany; • The evidence for the UK is ambiguous, with some key indicators showing declines, such as social trust, while others appear to have remained stable, such as volunteering;

34. Stanley Milgram: Social Psychologist • Stanley Milgram created “the small world experiment” examining the average path length for social networks of people in the United States. • The research was groundbreaking in that it suggested that human society is a small world type network characterized by short path lengths.

35. Trends in Social Capital

36. Measurement of Social Capital • Social capital can be measured using a range of indicators but the most commonly used measure is trust in other people;

37. Social trust • Social trust is a core component of social capital, and is normally used as a key indicator of it, sometimes as the best or only single indicator.

38. Percentage of People Saying that Most People can be Trusted.

39. Why Focus on Trust? • Trust is “at the heart of social order” - (Luhman 1979) and essential to the conduct of everyday life • Without trust we must rely on limited effectiveness of government or the military

40. Social Cohesion • Cohesion is defined as a "field of forces that act on members to remain in the group" or "the resistance of a group to disruptive forces"

41. Social Cohesion • The presence of multiple paths, passing through different actors, implies that if any one actor is removed, alternative linkages among members still exist to maintain social solidarity • A group is strongly (as opposed to weakly) structurally cohesive to the extent that multiple independent social relations among all pairs of members of the group hold it together.

42. Dimensions of social cohesion • Belonging vs. Isolation • Which means shared values, identity, feeling of commitment • Inclusion vs. Exclusion • Which concerns equal opportunities of access • Participation vs. Non-involvement • Recognition vs. Rejection • Which addresses the issue of respecting and tolerating differences in a pluralistic society • Legitimacy vs. Illegitimacy • With respect to the institutions acting as mediator in conflicts of a pluralistic society

43. Community Vitality Collectiveefficacy Linking & Corporate Social Capital Capacity forcollectiveaction Civil Society Organizations Social Activities Bonding & Bridging Social Capital Social Commitment Social cohesion Social Trust Social Interactions

44. Thank You ! Any Question ?