Social Capital

Social Capital has become an engaging factor and we all are serious to build up social capital. Many people are wondering about this unique scientific term. Social capital does not have a clear, undisputed meaning, for substantive and ideological reasons (Dolfsma and Dannreuther 2003; Foley and Edwards 1997).

Man is by nature a social animal; an individual who is unsocial naturally and not accidentally is either beneath our notice or more than human. Society is something that precedes the individual. Anyone who either cannot lead the common life or is so self-sufficient as not to need to, and therefore does not partake of society, is either a beast or a god. ( Greek Philosopher Aristotle  384 – 322 BC)

Social capital is about the value of social networks, bonding similar people and bridging between diverse people, with norms of reciprocity (Dekker and Uslaner 2001; Uslaner 2001).

Social capital means a network of relationships between individuals and various entities. John Field’s (2003: 1-2) social capital theory emphasizes on ‘relationships matter’. Dekker and Uslaner (2001) wrote that social capital is fundamentally about how people interact with each other. So, how can we define the term social capital? The World Bank defines:

‘Social capital refers to the institutions, relationships, and norms that shape the quality and quantity of a society’s social interactions… Social capital is not just the sum of the institutions which underpin a society – it is the glue that holds them together’ (The World Bank 1999).

According to Robet Putman, the social capital guru:

Whereas physical capital refers to physical objects and human capital refers to the properties of individuals, social capital refers to connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them. In that sense social capital is closely related to what some have called “civic virtue.” The difference is that “social capital” calls attention to the fact that civic virtue is most powerful when embedded in a sense network of reciprocal social relations. A society of many virtuous but isolated individuals is not necessarily rich in social capital’ (Putnam 2000: 19).

So, Social capital is all about a relationship between individuals, entities and other social norms. It is very unique that it focuses on trusting relationship that add values, opportunities and possibilities which helps in promoting a quality life. It depicts about cultivating cultures, engagement, equality, trust, tolerance and solidarity.

Social capital is, in my view, an engaging experience of relationship of networks. It is all about how we are related to each other. We are considering three important factors – individual interest, shared interest and common interest. So, when these three interests mutually are engaged that provide an incentive in building social capital. With good quality of social capital, we can better deal with a ‘wasted opportunity’. The quality of our existence comes from the quality of social capital.

Social capital provides incentives to globalization, knowledge spillover, community development and human progress. When a society is unable to meet growth, it means, it is facing a huge deficit of social capital. Today’s non-profit organizations are undoubtedly helping the society creating social capital but the government and international bodies should provide appropriate platform to build social capital in order to face the future challenges.

The Challenges of Global Innovation

Innovation has no longer been a passive word. What is innovation? Innovation means doing of something new for the first time from research and experiments.  Baregheh et al. (2009) within the organizational context, defines innovation as:

Innovation is the multi-stage process whereby organizations transform ideas into new/improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace.

Schumpeter defined innovation as the ‘process of creative destruction’ (1942)  and identified innovation as the critical dimension of economic change. He argued technological innovation often creates temporary monopolies, provides right platform and necessary incentive for firms to develop new products and helps in processes innovation.

So, why do firms do innovation? Firms generally do innovation at manufacturing level and Innovation can be supply- pushed (based on new technological possibilities) or demand-led (based on market requirements and new markets). Increasing competition forces the firms to do innovation in order to stay in the market and compete with their rivals. As no firms want  a negative profit and some firms want to dominate the market creating market power and innovators face unsubtle competition from the rivals in the form of imitation, which of course costs something to the rivals. International trade and globalization have made the world a global village and the world becomes a solid platform for competitors to face the global challenges.

The rising growth of global innovation often provides firms to widen their knowledge through global networks and international projects. It helps to access new knowledge, skills, customers, collaboration and technology. Technological innovation, no doubts, plays an important role and force the firms to become technologically independent in order to exploit better benefits than their rivals, and to meet difficult challenges in the global market.

Finally, How do the firms meet this global challenges? In order to sustain in the competing market, firms do find new sources of knowledge and they engage themselves through collaborators in specialist clusters and Research and Development to create new knowledge with new ideas. And it does have a significant impact on future pattern of growth both planned and usual growth.

Picture courtesy: mfauscette.com

  • Follow ganeshone on Twitter
  • EconaCalender

    May 2017
    M T W T F S S
    « Sep    
    1234567
    891011121314
    15161718192021
    22232425262728
    293031  
  • “some random thoughts on socio-economic issues”

  • Enter your email address to follow this blog and receive notifications of new posts by email.

    Join 138 other followers