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Regional Social Capital: Why it Matters

Edward J. Malecki

To cite this article: Edward J. Malecki (2012) Regional Social Capital: Why it Matters, Regional
Studies, 46:8, 1023-1039, DOI: 10.1080/00343404.2011.607806
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Regional Studies, Vol. 46.8, pp. 1023–1039, September 2012

Regional Social Capital: Why it Matters

EDWARD J. MALECKI
Department of Geography, The Ohio State University, 1036 Derby Hall, 154 North Oval Mall, Columbus, OH 43210-1361,
USA. Email: malecki.4@osu.edu

(Received November 2009: in revised form June 2011)

MALECKI E. J. Regional social capital: why it matters, Regional Studies. Social capital refers to a culture of interaction among people,
with productive economic outcomes. Social capital promotes regional learning both within a region and beyond, as it reinforces
openness to the ideas of others. Regional cultures vary in the degree to which people – individually and within their organizations
– trust and interact with one another, which is why regional outcomes vary. Innovation, learning and entrepreneurship – key pro-
cesses of regional development – take place largely within and among people as members of companies and territorial organiz-
ations. Innovative milieus, industrial districts and knowledge economies are among the regions with extraordinary pools of
social capital.

Social capital Learning region Innovation Learning

MALECKI E. J. 区域社会资本：有何相关性，区域研究。社会资本指一种人与人之间互动的文化，同时产生生产性经
济结果。由于强化了人与人之间理念的互通，社会资本能够促进区域内外的区域性学习。不同个体之间及其组织间
的信任与互动程度存在不同程度的差异, 这正是不同区域存在差异的原因。 作为区域发展中的核心过程，创新、学
习以及公司多出现在公司以及领域性组织成员内部及相互之间。创新、产业区以及知识经济往往存在于拥有突出社
会资本的区域。

社会资本 学习型区域 创新 学习

MALECKI E. J. L’importance du capital social régional, Regional Studies. Le capital social se rapporte à une culture d’interaction
humaine, dont les résultats économiques s’avèrent productifs. Le capital social promouvoit l’apprentissage régional à la fois au
sein de et au delà d’une région, car il renforce la notion d’ouverture pour ce qui est des idées d’autrui. Les cultures régionales
varient quant au point jusqu’auquel les individus – individuellement et dans leurs groupements – se font confiance et interagissent,
ce qui explique la variation des résultats. L’innovation, l’apprentissage et l’esprit d’entreprise – des étapes primordiaux de l’amén-
agement du territoire – ont lieu en grande partie au sein de et parmi les gens en tant que membres des entreprises et des organismes
territoriaux. Les milieux innovateurs, les districts industriels et les économies de la connaisance sont à trouver dans les régions où les
bassins de capital social sont extraordinaires.

Capital social Région d’apprentissage Innovation Apprentissage

MALECKI E. J. Regionales Sozialkapital: warum es wichtig ist, Regional Studies. Sozialkapital bezieht sich auf eine Kultur der Inter-
aktion zwischen Menschen mit produktiven wirtschaftlichen Ergebnissen. Sozialkapital fördert das regionale Lernen sowohl inner-
halb als auch außerhalb einer Region, da es eine Offenheit gegenüber den Ideen anderer verstärkt. In den regionalen Kulturen gibt
es Unterschiede hinsichtlich des Ausmaßes, in dem Menschen – einzeln und innerhalb ihrer Organisationen – einander vertrauen
und interagieren; hierin liegt der Grund, warum auch die regionalen Ergebnisse unterschiedlich ausfallen. Innovation, Lernen und
Unternehmertum – zentrale Prozesse der Regionalentwicklung – finden zum Großteil innerhalb und zwischen Menschen als Mit-
gliedern von Unternehmen und territorialen Organisationen statt. Zu den Regionen mit außergewöhnlichem Reichtum an
Sozialkapital gehören innovative Milieus, Industriebezirke und Wissenswirtschaften.

Sozialkapital Lernregion Innovation Lernen

MALECKI E. J. El capital social regional: por qué es importante, Regional Studies. El capital social se refiere a una cultura de inter-
acción entre las personas con resultados económicos productivos. El capital social fomenta el aprendizaje regional tanto dentro
como fuera de una región ya que refuerza la apertura a las ideas de otros. En las culturas regionales existen variaciones en la
medida en que las personas –individualmente y dentro de sus organizaciones– confían e interactúan entre ellas, motivo por el
cual varían los resultados regionales. La innovación, el aprendizaje y el interés empresarial –procesos clave del desarrollo regional–
tienen lugar en gran medida dentro y entre las personas como miembros de las empresas y organizaciones territoriales. Los medios
sociales innovadores, las comarcas industriales y las economías del conocimiento pertenecen a las regiones con fondos extraordi-
narios de capital social.

0034-3404 print/1360-0591 online/12/081023-17 © 2012 Regional Studies Association http://dx.doi.org/10.1080/00343404.2011.607806

http://www.regionalstudies.org
1024 Edward J. Malecki
Capital social Región de aprendizaje Innovación
JEL classifications: O1, O18, O31, R11
INTRODUCTION
In a knowledge-based world, knowledge transfer –
deliberate and unintended – is critical. In both formal-
ized transfer and informal interactions, social links and
the norms and values associated with them play an
important role. ‘[G]ood social relations facilitate knowl-
edge transfers while absence of relations or bad relations
do not’ (WESTLUND , 2006, p. 91). Social capital has
joined financial capital as a critical, ‘soft’ type of territor-
ial capital in regional development (CAMAGNI , 2008).
But there remain multiple understandings of what
social capital means, how it works and why it matters
(BHANDURI and YASUNOBU , 2009; WESTLUND and
ADAM , 2010).
COLEMAN (1988) popularized the concept of social
capital but also prompted much confusion.1 His defi-
nition – that social capital ‘is defined by its function’
and ‘inheres in the structure of relations between
actors and among actors’ (p. S98) – has proven less
than enlightening for many trying to apply it. Examples
of social capital remain ‘easier to provide than one
specific definition’ (SERAGELDIN and GROOTAERT ,
2000, p. 45).
As a metaphor, social capital is described as both a
glue and a lubricant. As a glue, it ‘facilitates transactions,
cooperation, and learning in an uncertain world’
(CAPPELLIN , 2004, p. 214; FOUNTAIN , 2001). It
keeps cooperation together but also hinders social
change (PALDAM , 2000). ‘Lubricant’ is an alternative
metaphor, implying that social capital helps to facilitate,
or lubricate, exchanges within a group (ADAM et al.,
2005). Social capital may be ‘both glue and lubricant,
in that social structures are formed and bound by
social capital yet social capital also facilitated the inter-
actions and flows within the structure’ (ANDERSON
and JACK , 2002, p. 206). The ‘glue’ is changeable or
organic, and can be adjusted and adapted depending
upon circumstances. Thus, the ‘gluing’ is a continuing
process of becoming bonded, and the amount of ‘lubri-
cant’ that social capital provides is dependent on the
state of the ‘gluing’ process. More valuable than the
metaphor used, then, is the observation that ‘social
capital is not a “thing” but a process’ – a bridge-building
process linking individuals, ‘creating a condition for the
effective exchange of information and resources’
(ANDERSON and JACK , 2002, p. 207).
Social capital allows regions to begin a ‘dynamic
spiral of development’ (SWEENEY , 2001, p. 161). The
web of social or network relations and the wider
social context together shape the way in which
Aprendizaje
collective learning and innovation take place (FALK
and KILPATRICK , 2000; RUTTEN and BOEKEMA ,
2007; WESTLUND , 2006). These are central processes
in a global economy in which competition is largely
based on knowledge.
This paper begins by defining social capital, its forms
and its measurement. Next, it outlines the development
process as fundamentally about innovation and entre-
preneurship. Within that process, social capital is
central to learning and knowledge creation. The
degree to which people interact and create knowledge
collectively is central to the innovation process, particu-
larly within organizations. Power relationships, uneven-
ness and over-embeddedness of social capital can reduce
or limit the benefits of social capital. The paper then
identifies innovative milieux as locales that are particu-
larly rich in social capital. It concludes with some
thoughts about what is missing in research on social
capital. Future regional studies research in this arena
will be better informed by contextualizing social
capital and developing a more nuanced understanding
of social capital as a process.
SOCIAL CAPITAL2
The concept of social capital was first used by HANIFAN
(1916), and it has become widespread since the 1980s
(FARR , 2004). It became a prominent topic in the litera-
ture during the late 1980s, marked by two seminal
papers by BOURDIEU (1986) and COLEMAN (1988).
A sociological ‘invention’, social capital has remained
of greater interest among sociologists than economists.
Sociologists tend to cite BOURDIEU (1986) as the
seminal text. PUTNAM (1995, 2000) popularized the
concept for policy-makers.
Applications of social capital are found throughout
the social sciences – in economic performance, health
and well-being, crime, education, and government
(HALPERN , 2005). The success of social capital as a
concept, according to DURLAUF and FAFCHAMPS
(2005, p. 1642), may be because ‘no social science has
managed to impose a definition of the term that captures
what different researchers mean by it within a discipline,
let alone across fields.’ For example,
all camps in the field of public health generally agree that
social capital ‘matters’ in some basic sense – unlike in say,
the field of economic development, where selected critics
paint it as a politically vapid distraction, and argue for its
abandonment.
(SZRETER and WOOLCOCK , 2004, p. 651)
 Regional Social Capital: Why it Matters
FISCHER (2005, p. 157) suggests that the term ‘social
capital’ is ‘unnecessary, because clearer and simpler
terms – such as membership, family, sociability and
trust – serve perfectly well.’
WESTLUND (2006) and CANNONE (2009) highlight
the contrast between the two major proponents of the
term, Bourdieu and Coleman. Although both recognize
the centrality of networks and groups,
Bourdieu regards social capital as a resource that is procured
via the links to the nodes (individual/group), whereas
Coleman’s standpoint is that social capital consists of the
links within and between networks/groups.
(WESTLUND , 2006, p. 1, emphasis in original)
That is, to Coleman, social capital cannot be the private
property of any individual; to Bourdieu, social capital is
the sum of the resources that accrue to a group or indi-
vidual by virtue of possessing a durable network of insti-
tutionalized relationships.3 These distinctions are
important because they focus attention on network
links or relationships rather than on what is possessed
by an individual or organization.
PUTNAM et al. (1993) explain stark differences in
development between northern and southern Italy as a
result of differences in social capital, as seen in civic
engagement. SABATINI (2008) attributes these persistent
differences in the quality of economic development to
an abundance of bonding social capital and low levels
of weak ties in the southern regions. NARDONE et al.
(2010) document the considerable variation in types
and levels of social capital among communities within
southern Italy. PUTNAM (1995, 2000) describes the
decline of civic engagement in American society as
one of people ‘bowling alone’ rather than with others.
This generalization must be tempered by the presence
of regional variations in social capital in the United
States (IYER et al., 2005; PUTNAM , 2000; RUPASINGHA
et al., 2006). An intriguing non-local dimension is seen
in lower levels of social capital in communities where
Wal-Mart stores are located, perhaps because these
‘big box’ stores have lower need for local businesspeo-
ple, such as bankers, lawyers and accountants (GOETZ
and RUPASINGHA , 2006).
Definitions
With this background, here are a few of the many defi-
nitions of social capital.
Social capital cannot be acquired by individuals acting
alone; it is created and transmitted through cultural
mechanisms like tradition, religion, or historical habit,
which created shared ethical values and a common purpose.
(FUKUYAMA , 1995, pp. 26–27)
Social capital is a self-organising system with many actors
connected in an amorphous web or network.
(WILSON , 1997, pp. 747–748)
1025
Social capital stands for the ability of actors to secure
benefits by virtue of membership in social networks or
other social structures.
(PORTES , 1998, p. 6)
Social capital refers to the norms and networks that enable
people to act collectively.
(WOOLCOCK and NARAYAN , 2000, p. 226)
Social capital is defined as social, non-formalized networks
that are created, maintained and used by the networks’
nodes/actors in order to distribute norms, values, preferences
and other attributes and characteristics, but which also
emerge as a result of actors sharing some of these attributes.
(WESTLUND , 2006, p. 8)
Social capital can be envisaged as a revolving mutual fund
of traded and un-traded interdependencies.
(ANDERSON et al., 2007, p. 265)
Social capital consists of social relations among agents com-
bined with social institutions that allow for co-operation
and communication.
(LORENZEN , 2007, p. 801)
Several observations emerge from these (and other) defi-
nitions. First, social capital explicitly represents the
overlap between the social and economic spheres of
human life. Consequently, attempts to construct econ-
omic models of social capital (for example, DASGUPTA ,
2003; GLAESER et al., 2002) are likely to miss important
elements. ARROW (2000) notes that
the essence of social networks is that they are built up for
reasons other than their economic value to the participants.
… [A]ttempts to understand the microfoundations of
social capital are probably doomed to fail.
(p. 4)
GIACCARIA (2009) suggests that most attempts to
understand the microfoundations resort to ‘magic’.
Others focus on understanding the behaviour of
groups rather than individuals (BOWLES and GINTIS ,
2002). The incentives and motivations of public or
social entrepreneurs are not well understood
(OSTROM , 2000), but BIRCH and WHITTAM (2008)
identify a number of objectives other than profit for
which social capital is an outcome.
Second, it is becoming clear that social capital is not
the same when it is barely present and when it is found
in abundance. UPHOFF (2000) proposes a social capital
continuum, shown in Table 1, which explicitly recog-
nizes that the presence of social capital to different
degrees sparks qualitatively different behaviours.
Third, although the importance of social capital for
development and growth requires a focus on the group
rather than on the individual, it is unclear on which scale
or level of analysis we should focus. As shown in
Table 2, the terminology as well as the conception of
social capital tends to change as the scale of analysis and
level of aggregation changes (see also TURNER , 2000).
1026 Edward J. Malecki
Table 1. The social capital continuum
Substantial social
Minimum social capital Elementary social capital capital Maximum social capital

Interests No interest in others’ welfare; Primarily interested in one’s own wel- Commitment to com- Commitment to others’ wel-
self-interest at others’ expense fare; cooperate only if it serves one’s mon enterprises fare; concern for the public
own advantage good
Values Self-aggrandizement Efficiency of cooperation Effectiveness Altruism regarded as good in
of cooperation itself
Issues Selfishness Reduction of transaction costs How to sustain collec- Self-sacrifice
tive action
Strategy Autonomy Tactical cooperation Strategic cooperation Merger of the submergence of
individual interests

Source: Based on UPHOFF (2000, pp. 224–225).

National scale studies have had a tremendous influence
(KNACK and KEEFER , 1997), yet the community or
locality is more appropriate than the nation (WOOLCOCK ,
1998; SZRETER and WOOLCOCK , 2004). Perhaps the
even smaller ‘neighbourhood’ is most appropriate
(FORREST and KEARNS , 2001; MOULAERT and NUSS-
BAUMER , 2005; SCHUTJENS and VÖLKER , 2010).
Overall, it seems that the intermediate, or meso-scale, of
analysis (such as firms and regions) is where the social
capital process affects development more directly.
Types and forms of social capital
The variety of definitions and understandings of social
capital has prompted the construction of typologies to
delineate the distinct contexts of social capital. Among
the most widely adopted is the typology of WOOLCOCK
(2004) to account for three types of relational assets that
people have access to in varying degrees:
. Bonding social capital: immediate family, friends,
neighbours.
. Bridging social capital: more distant colleagues and
associates.
. Linking social capital: connections to people in pos-
itions of authority.
The distinctions among the three types are highlighted
in recent work. For example, the greatest constraint
on Indonesian entrepreneurs is a lack of linking social
capital – that is, that able to penetrate the financial
system (TURNER , 2007). While bonding and bridging
social capital ‘support the day-to-day survival of an
enterprise’, only linking social capital can provide ‘the
Table 2. Social capital at different levels of aggregation
Level Terms used for social capital
Nation National cultures
Region Regional culture, regional mentality
Local level (place) Local relations, spirit of place
Group Relations, norms, networks
Individual Behaviour, preferences, opinions, values,
attitudes
Source: Adapted from WESTLUND (2006, fig. 3.1).
more substantial support necessary for enterprise
advancement’ (TURNER , 2007, p. 415; see also
STORPER , 2005; KLOOSTERMAN , 2010). SVENDSEN
and SVENDSEN (2004) identify ‘the destruction of
social capital’ as
bridging social capital giving way to ‘bonding’ social
capital … and ‘inward looking networks’. … [B]ridging
social capital enforces personal contact and acts as a ‘lubri-
cator’ for human co-operation, whereas bonding social
capital enforces distance between people and, conse-
quently, acts as a ‘super-glue’, increasing distrust and,
thus, transaction costs.
(p. 2)
GROOTAERT and VAN BASTELAER (2002, p. 3)
suggest that there are only two distinct types of social
capital: structural and cognitive. Structural social
capital – seen in the social networks of actors – facilitates
information sharing, collective action, and decision-
making through established roles and social networks
supplemented by precedents, rules and procedures. It
is relatively objective and externally observable. Cogni-
tive social capital refers to shared norms, values, atti-
tudes, beliefs and trust. Like its components, it is
relatively subjective and intangible. Illustrating the lack
of consensus, LIAO and WELSCH (2005) add a third
type to these two: relational capital, which incorporates
trust and trustfulness. These three types are used most in
business and management research, with emphasis on
structural social capital (LEE , 2009).
Typologies avoid confronting the question: to what
extent is social capital ‘capital’? That is, how does it
accumulate? What are the rules of accumulation and
the rules of depreciation? Social capital is one of
several kinds of hybrid capital, which pose problems for
those who see them as identical – not merely analogous
– to financial capital, and reduced to a homogeneous
value form (DEAN and KRETSCHMER , 2007). Its
intangibility and irreproducibility provide a double
challenge for those who create policies to generate
social capital (LUNDVALL et al., 2002). WESTLUND
(2006) sees social capital as diversified and complex,
with resultant similarities and dissimilarities with other
forms of capital; he concludes that there is only a
 Regional Social Capital: Why it Matters
weak basis to call social capital a form of capital. GIAC-
CARIA (2009), however, believes that social capital is
capital in the Marxist sense of the term.
FISCHER (2005, p. 157), for whom social capital is a
‘dreadful metaphor’, asks ‘Where can I borrow social
capital? What is the going interest rate? Can I move
some of my social capital off-shore?’ Yet, BOURDIEU
(1986) focuses on the convertibility of social capital
into economic capital:
[T]here are some goods and services to which economic
capital gives immediate access, without secondary costs;
others can be obtained only by virtue of a social capital of
relationships (or social obligations) which cannot act instan-
taneously, at the appropriate moment, unless they have
been established and maintained for a long time … i.e., at
the cost of an investment in sociability which is necessarily
long-term because the time lag is one of the factors of the
transmutation of a pure and simple debt into that recog-
nition of nonspecific indebtedness which is called gratitude.
(p. 252)
The greater problem of the use of metaphors to describe
social capital is tendency to make the latter ‘magical’,
ignoring ‘issues such as who has it, who instead has no
access to it, how it is reproduced and who takes advantage
of it’ (GIACCARIA , 2009, p. 76). Social capital also
depreciates or decays if it is not renewed. ‘Social relation-
ships die out if not maintained; expectations and obli-
gations wither over time; and norms depend on regular
communication’ (COLEMAN , 1990, p. 321). ROBISON
et al. (2002) say that decay occurs without maintenance
in the relationship; such ‘disinvestment’ in a relationship
destroys social capital. For precisely this reason, social
capital can disappear if it is not continually reinforced
and built upon. A region rich in social capital today
might be social capital-poor tomorrow if it is not actively
maintained. Attempts to measure social capital, therefore,
should recognize that it is a process, not easily measured,
rather than a thing which is measureable.
Can social capital be measured?
Social capital is difficult to measure directly; for empiri-
cal purposes the use of proxy indicators is necessary.
Years of education and work experience are common
proxies for human capital. No such consensus exists
for the study of social capital, and the search for the
best proxy indicator continues (GROOTAERT and VAN
BASTELAER , 2002). Among the most common proxies
are responses to surveys, such as the General Social
Survey in the United States, Eurobarometer surveys,
the European Values Survey, and the World Values
Survey, concerning generalized trust (‘Most people
can be trusted’ or ‘Most people are honest’), and mem-
bership in voluntary organizations (ranging from
churches to labour unions) and other questions (WES-
TLUND and ADAM , 2010).
A degree of consensus has emerged around Wool-
cock’s three forms of social capital, but ‘there are few
1027
existing instruments to measure bridging social capital,
and none (that we are aware of) that taps linking
social capital’ (KAWACHI et al., 2004, p. 688). Most
empirical work focuses on bonding social capital,
perhaps not because it is the best proxy but because
measures of trust and of civic engagement are readily
available, and can be fine-tuned. For example, KNACK
and KEEFER (1997) distinguish between ‘Olson-type’
groups, or rent-seeking organizations, and ‘Putnam-
type’ groups, which are not rent-seeking but involve
social interaction that promotes trust and cooperation.
‘Obtaining a single, true measure of social capital is
probably not possible’ (WOOLCOCK and NARAYAN ,
2000, p. 239). They suggest two principal reasons.
First, the most comprehensive definitions of social
capital are multidimensional, incorporating different
levels and units of analysis. Second, the nature and
forms of social capital change over time, as the balance
shifts between informal organizations and formal insti-
tutions. At The World Bank, which sees social capital
as the ‘missing link’ in sustainable development and
part of the ‘intangible capital residual’ (WORLD BANK ,
1997, 2006), economists recommend a shift toward
formal institutions (BEBBINGTON et al., 2004; STIGLITZ ,
2000).4 This is illustrated by BARTOLINI and BONATTI ’s
(2008) model in which an economy tends to grow faster
when it is relatively poorer in social capital, and more
rapidly in the presence of formal institutions. Attention
only to formal institutions may be flawed where infor-
mal institutions – such as the presence of corruption –
are more significant (FIDRMUC and GËRXHANI , 2008).
ANDERSON et al. (2007) suggest that the measure-
ment issue is related to the definition:
Unlike a normal ‘stock’ social capital is not owned but
merely represents a pool of goodwill residing in a social
network. … Thus, networks of connected individuals can
apply the social capital present in the network to unlock
or gain access to other resources. Seen this way social
capital is more akin to a key, rather than the resource itself.
(p. 264)
Accordingly, LANDRY et al. (2002) attempt to measure
social capital through five forms of structural social
capital and one form of cognitive social capital (reciprocal
trust). They find that firms’ decisions to innovate and to
introduce radical innovations are more likely among
firms whose social capital (in the form of participation
assets and relational assets) is greater (see also
CARMONA -LAVADO et al., 2010; HAUSER et al., 2007).
Among communities, SVENDSEN and SORENSEN
(2007) show how social, organizational and cultural
capital – all forms of intangible capital – account for
differences in community economic performance. The
most explicit statement of this idea is that of social
capital as a regional resource – a dynamic, innovative
capability (PIHKALA et al., 2007). As a regional resource,
‘social capital is not owned socially, it is simply (re)pro-
duced socially’ (GIACCARIA , 2009, p. 75).
1028 Edward J. Malecki
Because social capital is difficult to see and measure,
measures vary widely (WESTLUND and ADAM , 2010).
Some believe that qualitative techniques are necessary
for measurement (ANDERSON et al., 2007; FALK and
KILPATRICK , 2000; STABER , 2007). In part because
social capital ‘is not as easy to find, see, and measure as
is physical capital’, OSTROM (2000, p. 180) believes
that it ‘may be almost invisible’ unless researchers
inquire about the ways in which individuals organize
themselves and the rights and duties that guide their be-
havior – sometimes with little conscious thought. Even
when asked, local residents may not fully describe the
rules they use.
Recent research has attempted to detect individual
differences via factor analysis and has used cluster analysis
to detect groups of people and types of social capital,
which are personal rather than organizational in origin
(KALLIO et al., 2010; PIHKALA et al., 2007).
DEVELOPMENT AS INNOVATION AND
ENTREPRENEURSHIP: THE ROLE OF
SOCIAL CAPITAL
The development process is fundamentally about inno-
vation and entrepreneurship – that is, creating new
products, new firms and new industries (CAPPELLIN ,
2003; MALECKI , 1997). Innovation – change rather
than stability – is increasingly necessary in a knowledge
economy, and ‘only the territorial production systems
which are able to learn how to adapt continuously to
the new conditions imposed by globalisation will
remain competitive’ (MAILLAT , 2001, p. 137). In
this sense, regional social capital is what transforms
technology into regional economic development
through regional innovation networks (RUTTEN and
BOEKEMA , 2007). However, because of both uncertainty
and inability to control networks, top-down planning is
not effective (GUTH , 2005). At the regional scale, it is
even more unlikely that knowledge and innovation
capabilities can be created by decree, since few, if any,
regions have sufficient top-down power.
The primary relevance of social capital to the process
of economic growth derives from its presence in interac-
tive learning (FALK and KILPATRICK , 2000; LUNDVALL
et al., 2002). Social capital, along with interaction, net-
working, cooperation and spatial proximity, are
‘elements of collective learning processes promoting
the innovativeness and competitiveness of firms,
regions, and nations’ (ASHEIM et al., 2007, p. 657). Inno-
vative learning is about finding, assembling and absorbing
relevant knowledge from many sources to create new
combinations. Innovation ‘is a process where the
outcome is highly dependent upon interaction and com-
munication between people’ in which actors operate ‘in
a context where the resources they need to mobilize
are shared with others and actually change in the very
process of interaction’ (LUNDVALL and CHRISTENSEN ,
2004, p. 5, emphasis in original).
Firms invest in social links with suppliers, demanding
and collaborating customers, and research and develop-
ment partners. To validate and critique the ‘proliferating
rivers of knowledge’ requires reliance on social capital,
via formal or informal networks (SCHULLER , 2006).
These network ties provide several benefits, such as
faster access to information and knowledge, lower infor-
mation and knowledge costs, and increased quantity and
quality of information and knowledge (WESTLUND and
NILSSON , 2005). These, in turn, result in faster inno-
vation processes, a higher quality of innovations and
increased innovation potential (KOKA and PRESCOTT ,
2002). This is seen also at the regional level (FROMHOLD -
EISEBITH , 2004).
Geography influences social capital in that
while not all types of social relations are subject to distance
costs, the interdependencies of different types of social
relations make dense combinations of them dependent
upon geographic proximity.
(LORENZEN , 2007, p. 805)
The advantage of proximity – and of urban agglomera-
tion – is the potential for frequent as well as unplanned
interactions (STORPER and VENABLES , 2004). At a col-
lective level, all firms can potentially benefit from proxi-
mity. However, firms and inter-firm relations vary
considerably, and this results means that agglomeration
and clustering do not guarantee interaction (OINAS ,
2002); nor do they guarantee that learning can occur.
Learning is an interactive, socially embedded, and localized
process, and therefore requires an analytical framework
broader than that offered by economics alone
(LUNDVALL et al., 2002). LORENZEN (2007) cites the
‘shared social codebooks’ in a place that provide ‘cogni-
tive co-ordination’ which in turn facilitates learning.
Knowledge and learning embedded in social capital are
largely localized and do not ‘travel’ well because they
are bound historically to local circumstances, involving
unique bonds and accumulated routines:
The formal and informal networks between people in a
common location, which have often been developed
through long-term interaction, and the resulting evolution
of local institutions form part of the social capital surround-
ing innovation processes.
(MALMBERG et al., 1996, p. 92)
Localized learning has become a focal issue for
research, because whether – and where – it takes place
opens opportunities for dealing with change, inno-
vation, and disruptive innovation. An important comp-
lement to the focus on localized learning is what might
be called dispersed learning (AMIN and COHENDET ,
1999). Small and medium-size enterprises (SMEs), as
they internationalize, gradually extend the geographical
scope, from a local or regional to an international level,
of those relationships of trust and collaboration that
 Regional Social Capital: Why it Matters
were originally common only within their local clusters
(CAPPELLIN , 2004).
As firms stretch their boundaries to include a wider
array of sources of knowledge, this must include both
sources in close proximity, or local sources, and those
located anywhere else – that is, non-local sources
(OINAS and LAGENDIJK , 2005; WOOLCOCK , 1998).
Areas and their populations must be receptive to new
ideas from new sources. Horizontal networks within
the community need to be complemented by vertical
networks (or pipelines) to other places (FLORA and
FLORA , 1993). This necessity of both local ‘buzz’ and
‘pipelines’ to global knowledge has been emphasized
recently by BATHELT et al. (2004) and ASHEIM et al.
(2007). Access to technology and knowledge embedded
in other milieux is particularly difficult to obtain
(MALMBERG et al., 1996); to do so it is critical to
‘anchor’ projects, that is, to create a milieu that is both
locally autonomous as a dynamic knowledge-rich
locale and capable of existing within a network of
distant interactions, ‘on the map’ in certain specific
areas (CREVOISIER and JEANNERAT , 2009). In some
fields, venture capitalists provide international social
capital to complement the local social capital of innova-
tive regions (MÄKELÄ and MAULA , 2008).
The economic focus on formal institutions and on
minimizing transaction costs tends to detract from atten-
tion to learning and innovation and to relational capital
(LUNDVALL , 2006; SAKO , 1998). Relational capital
is defined as all relationships – market relationships, power
relationships and cooperation – established between firms,
institutions and people, which stem from a strong sense of
belonging and a highly developed capacity of cooperation
typical of culturally similar people and institutions.
(CAPELLO and FAGGIAN , 2005, p. 77; CAMAGNI , 2008)
It has similarities to the substantial social capital found in
Table 1 (UPHOFF , 2000).
Social capital, however, does not develop automati-
cally from interactions. Instead, it takes time for trust
and credibility to form (MAC KINNON et al., 2004).
MASKELL (2000) suggests the benefits of investment in
the time-consuming process of social capital accumu-
lation. Partners save search costs by staying in contact
with one another and, through repetitive knowledge
exchanges, they benefit from lower costs and increased
quality of the knowledge transmitted. The relation-
specific sunk costs support a continuous stream of
innovation.
Trust as a meso-scale concept
Trust is central to the concept of social capital (DAS-
GUPTA , 2000; GLAESER et al., 2002; OSTROM and
AHN , 2003; PALDAM , 2000). A large literature has
grown around the concept of trust (see the reviews by
MURPHY , 2006; and RING , 1997).5 Trust is not only
an individual or micro-scale phenomenon, but also it
1029
functions within and among organizations and groups
– at the meso-scale (FALK and KILPATRICK , 2000;
SEPPÄNEN et al., 2007). Trustful relations tend to be
self-reinforcing and thereby strengthen cooperation.
Mistrust, on the other hand, tends to cycle in a negative
direction, which weakens relationships and cooperation
(FOUNTAIN , 2001). Research inspired by PUTNAM
(1995, 2000) and KNACK and KEEFER (1997) has
focused on macro-scale and society-wide conditions,
using survey data on trust and cultural characteristics.
However, it is difficult to translate or generalize across
spatial scales, because trust is context dependent and
sector dependent and, most importantly, an economic
benefit is more likely to arise from social capital in econ-
omic and business networks rather than social networks
(WESTLUND and ADAM , 2010).
Business reliability, or competence trust, concerns tech-
nical and managerial competence to carry out a task,
such as accepting goods from a supplier without inspect-
ing them (SAKO , 1992). Competence trust exceeds
contractual trust, the mutual expectation that promises
made are kept, which is the trust typically described
by economists. Indeed, trustworthiness is considered a
source of competitive advantage (BARNEY and
HANSEN , 1994) and contributing to social capital
(BOWEY and EASTON , 2007).
A third, higher-level trust, goodwill trust, refers to
mutual expectations of open commitment, seen in a will-
ingness to do more than is formally expected, such as
sharing of non-routine information (GELSING , 1992;
SAKO , 1992). Higher-level types of trust are the basis of
Uphoff’s substantial and maximum social capital (Table
1). Note that such trust is not the civic engagement
trust of Putnam, nor the general trust found in popu-
lations, but a relation-specific trust found in contexts of col-
lective innovative learning. Like social capital, such trust
is more a property of collective units and relationships
than of isolated individuals (BLOMQVIST , 1997). Collab-
oration for learning and innovation are facilitated by a
richer set of relationships, which enhance the volume,
diversity and richness of information exchanged (KOKA
and PRESCOTT , 2002). Continuous interaction
between firms offers the opportunity for innovation as
well as the existence of a known and predictable environ-
ment in which innovation can be realised (EASTON ,
1992). The relation-specific skills between firms formed
through this process are a form of social capital in
which both parties invest and from which both benefit
(PATCHELL and HAYTER , 1995). For example, innova-
tive firms tend to make greater use of collaboration and
information exchange, be involved in higher trust
relationships, and make greater use of non-local net-
works (COOKE et al., 2005). The problem lies in how
such trust between actors in the business and economic
sphere is related to generalized trust within larger popu-
lations (WESTLUND and ADAM , 2010).
The concept of relational capital would seem to focus
attention at the micro scale – that is, on people, rather
1030 Edward J. Malecki
than on groups or organizations, including firms.
However, because people and interpersonal interaction
are the basic building blocks of networks, different and
possibly conflicting goals arise in an individual’s knowl-
edge networks: personal interests, project goals and the
firm’s aims (GRABHER and IBERT , 2006). From the per-
spective of two companies attempting to learn from each
other within a strategic alliance, KALE et al. (2000) suggest
a typical conclusion: the trust and respect necessary for
learning to take place emerge from relations among the
individuals in the firms. This suggests, in turn, that it is
a significant challenge for companies to learn deeply
from external sources. After acquiring knowledge, it is
absorbed through the complex and time-consuming
spiral of knowledge acquisition proposed by NONAKA
and TAKEUCHI (1995).
Trust emerges at the meso-scale through face-to-face
encounters and on the basis of group memberships or
other characteristics associated with trustworthy individ-
uals (such as race, religion or social class) (MURPHY ,
2006). Moreover, building trust requires time, effort
and the right spaces for interaction (LAZARIC et al.,
2008). This is a large challenge when trying to create,
from the top down, relationships within which learning
and innovation can take place, such as global teams and
strategic alliances.
Absorptive capacity
As the highest-level capability, learning allows a firm to
adapt to changed circumstances in its competitive
environment. Learning has attained new significance
through the concept of absorptive capacity: the firm’s
ability to evaluate potential knowledge, assimilate it,
and apply it (COHEN and LEVINTHAL , 1990). Learning
is specific to each firm–firm dyad and the relationship
between their knowledge-processing systems (LANE
and LUBATKIN , 1998). As the relationship grows, and
absorptive capacity increases, absorption mechanisms
become more diverse. Firms with high absorptive
capacity extend learning to all kinds of knowledge and
many sources, but especially personal contacts, which
enhance the exchange of tacit knowledge
(MANGEMATIN and NESTA , 1999). RUSH et al. (2007)
have devised an operational measure of absorptive
capacity, resulting in four types of firms: unaware,
reactive, strategic, and creative.
Rather than micro- (individual) or macro-
(national or societal) scale, social capital is primarily
a meso-scale process, centred in communities and
organizations and comprised of intermediaries,
knowledge brokers and institutions (FALK and KILPA-
TRICK , 2000; GUTH , 2005; MURPHY , 2006). At this
level, non-proprietary and intangible assets are shared
among a group of firms. Through knowledge extern-
alities and untraded interdependencies, these higher-
order capabilities become sticky, enhancing absorptive
capacity (FOSS , 1996).
Territories as well as firms, then, have absorptive
capacity. GIULIANI (2002) describes cluster absorptive
capacity as a function of three components: the knowl-
edge bases of firms, the intra-cluster knowledge system
and the extra-cluster knowledge system. While a few
firms may be isolated from the networks in the cluster,
most firms play one of three roles: absorbers of knowl-
edge, mutual exchangers, or technological gatekeepers,
transferring knowledge from external sources to local
firms (GIULIANI and BELL , 2005; MORRISON , 2008;
WINK , 2008). Gatekeepers or brokers, filling structural
holes in a social network, provide links to new ideas
and encourage creativity (BURT , 2000, 2004). Gate-
keepers act as the ‘network go-between’ who ‘primes’
the relationship between newly introduced actors by
setting expectations for trust and reciprocity and by equip-
ping it with resources that are ‘rolled over’ from the go-
between’s existing embedded tie to one of the new
network partners.
(UZZI , 1996, p. 694)
Among the important gatekeepers who bridge a struc-
tural hole between two unconnected people are social
entrepreneurs or community entrepreneurs (BIRCH
and WHITTAM , 2008; JOHANNISSON and NILSSON ,
1989). Within a community or locality, people vary
greatly in their skills and personalities – independent of
the organizations in which they work – and these indi-
vidual variations in turn give rise to three forms of
social capital: organizational bonding social capital,
regional bridging social capital and personal creative
social capital. Organizational bonding social capital is
beneficial in the assimilation and transformation of
knowledge. Regional bridging social capital helps in
the acquisition of diverse knowledge. Personal creative
social capital describes the personal will to take risks
and continue positively after mistakes. Of the various
types of social capital, PIHKALA et al. (2007) suggest that
creative social capital is most needed in regional develop-
ment. All types are needed to generate a regional absorp-
tive capacity (KALLIO et al., 2010).
CAPELLO (1999, p. 357) notes that the internal
capacity of each firm to exploit collective learning is
one of the preconditions for collective learning to take
place in a milieu; the second is the strategy of each
firm, which depends on the nature of the innovation
and the size of the firm. Not only knowledge, but also
the scope of competition must be global (MOROSINI ,
2004). Global competition and awareness, combined
with strong local knowledge integration, together
stimulate higher economic performance of industrial
clusters (GIULIANI , 2002).
WESTLUND (2006) compares biotechnology firms in
Sweden, Japan and California. He finds that the stron-
gest social capital of Japanese firms is internal to the
firms – to a large degree, an intentional product of
efforts to build ‘knowledge-creating companies’
(NONAKA and TAKEUCHI , 1995; NONAKA and
 Regional Social Capital: Why it Matters
TOYAMA , 2005). In California and Sweden, by contrast,
firms use the region as a spatial counterpart to Japanese
firms’ corporate internalization. Only in California,
however, did interactions within the regional environ-
ment include both high enterprise-internal social
capital as well as diversified networks, perhaps drawing
upon Silicon Valley’s ‘peculiar’ social capital (COHEN
and FIELDS , 1999). GREUNZ (2005) draws a similar con-
clusion within Europe: social capital appears to be at
work in the successful regions, with private–private
and private–public cooperation.
Social capital within organizations
Social capital is not only a territorial process and attri-
bute; it also is ‘created’ within firms, both large corpor-
ations and SMEs. Firms are another meso-scale entity
between individuals and nations. Companies devote
considerable effort to optimizing interactions and trust
among workers at dispersed locations and, perhaps a
more difficult challenge, between workers in different
companies in alliances. In effect, within organizations,
social capital can be interpreted in the context of cor-
porate culture (CHUNG and GIBBONS , 1997). Thus,
social capital, like trustworthiness, can be seen as a stra-
tegic resource – not uniformly available, mobile, or
easily traded or imitated (OLIVER , 1996).
Just as collective knowledge in a firm is greater than
the sum of the individual knowledge possessed by the
firm’s employees (NAHAPIET and GHOSHAL , 1998),
social capital benefits the firm collectively more than it
does individual employees (LEANA and VAN BUREN ,
1999). Through its employment practices, especially
stable employment relationships and investment in
training and learning, firms can manage organizational
social capital. As a result, social capital is exchanged
and combined to create new knowledge, or intellectual
capital, from which the firm as well as the individual
benefits. In this view, the co-evolution of social and
intellectual capital underpins organizational advantage
(NAHAPIET and GHOSHAL , 1998).
SMEs ‘cannot function’ without social capital
(COOKE , 2007). COOKE et al. (2005) show that social
capital within and among small firms affects their per-
formance, even if effects of regional social capital are dif-
ficult to discern. Because of its benefits, the ‘use of social
capital by SMEs is, effectively, ubiquitous … a kind of
entry-ticket to doing business’ (COOKE , 2007, p. 173).
In other words, SMEs rely on cooperation as a learning
process, and their networks reinforce one another,
building the absorptive capacity of firms (BOUGRAIN
and HAUDEVILLE , 2002).
These findings reinforce the long-standing empirical
observation: that social networks evolve into business-
focused networks, whereby firm formation takes
place, and then into strategic networks, which allow
firms to innovate and to thrive by their links to other
organizations. The importance of networks to the
1031
formation and success of SMEs is well established
(JOHANNISSON , 2000; MALECKI and TOOTLE , 1996).
At a regional, collective level, the characteristic of asso-
ciationalism captures the fact that networking is
common between and among institutions as well as
firms and individuals (ANDERSON and JACK , 2002;
COOKE and MORGAN , 1998). Social capital and asso-
ciationalism do not emerge by themselves everywhere.
Instead, an animateur or a community entrepreneur is
needed to catalyse local capabilities (MORGAN , 1997).
Particularly useful research in this regard is the work
of the Lahti Unit in Finland, which has aimed to
measure regional capabilities for a visionary new
regional development (HARMAAKORPI and UOTILA ,
2006; KALLIO et al., 2010; PIHKALA et al., 2007;
TURA and HARMAAKORPI , 2005). This work corre-
sponds generally to the steps recommended by
COOKE (2003) for regional technology foresight and
the creation of a regional innovation and learning
system (RILS); see also BENNEWORTH (2007).
PIHKALA et al. (2007), for example, who find that
several types of social capital characterize the perceptions
of regional development in the region, and that ‘creative
social capital’ is most related to visionary thinking.
Indeed, social capital is a capability-like resource rather
than an asset, such as physical capital (KALLIO et al.,
2010). The combination of various types of social
capital, cemented by leadership, is perhaps most com-
monly noted in rural regions (FLORA and FLORA ,
1993; HORLINGS , 2010).
SOME LIMITATIONS OF SOCIAL CAPITAL
The importance of social bonds, in comparison with
their absence, appears at first glance without question.
However, the benefits from social capital are likely to
be unequally distributed and even exclusionary
(FAFCHAMPS , 2006). More generally, focus on the
benefits of social capital ignores the unequal power
held by the actors in a network (GRABHER , 2006).
Power may result more from weak ties than from
strong ties (GRANOVETTER , 1973). Issues such as who
has social capital and who does not – central to BOUR-
DIEU (1986) – greatly affect the process and the outcome
of community planning and governance (GIACCARIA ,
2009; TAYLOR , 2000). Strong ties can
separate excluded people further from the society around
them. … The tragedy for today’s excluded communities
is that they neither have the strong ties of the past nor
the weaker ties that are an essential ‘currency’ in today’s
society.
(TAYLOR , 2000, p. 1027)
Too much bonding social capital becomes negative,
creating conformity rather than variety, and restricting
both business initiative and individual freedom.
Notably, social capital may restrict entrepreneurial
1032 Edward J. Malecki
initiative: ‘entrepreneurship-inhibiting social capital’ is
distinct from ‘entrepreneurship-facilitating social
capital’ (WESTLUND and BOLTON , 2003). Innovation
is stifled in some companies and places with ‘high’
social capital, because they are less open to newcomers
and especially to innovative collaborations (FLORIDA
et al., 2002). Bonding social capital is potentially unhelp-
ful, leading to exclusion of outsiders, excess claims on
group members, restrictions on individual freedoms,
and lowering norms (PORTES , 1998).
Social capital also can be a liability if too dependent
on a core network player or if over-embeddedness
characterizes the network (UZZI , 1997). TURA and
HARMAAKORPI (2005) identify two ‘lock-ins’ of
social capital: the closure of the network and collective
blindness. The first is a particularly negative feature in a
knowledge economy, where ideas from outside the firm
or the region are essential. Collective blindness is diffi-
cult to combat without the infusion of new knowledge
flows from new sources. That is, the shared values and
common purpose of a group can reinforce existing
activities and close it off from new ideas.
Entrepreneurs’ network ties tend to be homo-
geneous rather than diverse, and to favour local over
distant ties. This means that entrepreneurs face limited
access to new resources and knowledge. The benefits
of social capital are seen in entrepreneurs who are able
to develop broader, more diverse networks. Weak,
distant ties provide access to new information or
resources (KIM and ALDRICH , 2005). For example,
access to resources, such as financing, connections, tech-
nology, market information and gossip, may provide the
incentive for having relationships (BOWEY and
EASTON , 2007). Thus, investment by SMEs in social
capital ‘may be purely manipulative’ (COOKE , 2007).
If decisions are made purely for emotional or familial
reasons, businesses can fail (SPENCE et al., 2003).
THE INNOVATIVE MILIEU: OPTIMAL
SOCIAL CAPITAL
Perhaps the ideal examples of localized learning systems
are innovative milieux and industrial districts. In these
places, associationalism is high, involving knowledge
sharing among firms, among institutions, and between
institutions and firms (CAPELLO , 1999; COOKE and
MORGAN , 1998; HARRISON , 1992; INKPEN and
TSANG , 2005; POMA and SACCEHETTI , 2004). In
short, each such milieu has a unique, optimum combi-
nation of the various component parts or types of
social capital.6 A firm in such a locale can become
endowed with high-order capabilities, which are at
the meso-level, neither within the firm alone nor
generally available at the national or macro level
(FOSS , 1996).
An innovative milieu is characterized by several fea-
tures: stable inter-SME linkages and a stable local
labour market, the presence of cultural and organiz-
ational proximity, the presence of strong and stable
innovative synergies among local actors and labour
force, and exploitation of collective learning
(CAMAGNI , 1991, CAPELLO , 1999). These conditions
are not found everywhere, and may be called knowledge
economies (COOKE , 2002; CREVOISIER , 2004). Most
importantly, today’s ‘combinatorial knowledge
dynamics’ develop and operate across multiple
locations and across scales in ways that require various
types of links (CREVOISIER and JEANNERAT , 2009;
MALECKI , 2011).
In short, an innovative milieu reinforces and extends
the benefits from social capital for actors within the
milieu. FROMHOLD -EISEBITH (2004) finds that the
innovative (or creative) milieu is more useful for effect-
ing change, whereas social capital is more about stable
and stabilizing relationships. Thus, milieu relationships
and social capital relationships fulfil different tasks. The
milieu mainly enables the move from invention to inno-
vation, from idea to commercialization, and from
business plan to new enterprise. Social capital helps
companies to obtain other kinds of support and to
master management challenges, to become and stay
profitable (FROMHOLD -EISEBITH , 2005; PARTANEN
et al., 2008). ‘Through the combinations of economic
and social relationships in the network, the information
becomes rich, redundant and cheap’ (HERTZ ,
1992, p. 110).
In innovative milieux and industrial districts, econ-
omic space becomes a ‘relational space’, a field of inter-
actions, synergies and collective social actions that
stimulate innovative capability and local economic
development (CAMAGNI , 1991). Trust and the embedd-
edness of economic relationships into the ‘deeper social
fabric’ or the communal, noneconomic institutions of
the local area distinguish industrial districts from other
localized agglomerations of firms (HARRISON , 1992).
Three paradigms are at work in an innovative milieu
(CREVOISIER , 2004). First, the technological paradigm
stresses innovation, learning and know-how as the
most important competitive advantages. Second, the
organizational paradigm emphasizes the role of net-
works, competition, and rules of cooperation, as well
as relational capital. Third, the territorial paradigm
accounts for the role of proximity and distance and stres-
ses the fact that competition occurs between regions.
‘Relational capital’ rather than social capital is the pre-
ferred term in research on industrial districts
(CAMAGNI , 2008; CAPELLO and FAGGIAN , 2005;
MOLINA -MORALES and MARTINEZ -FERNANDEZ ,
2006). The ‘industrial district stands out in every
respect as a highly integrated texture encompassing all
network strands; it appears to be a self-organizing
arena for entrepreneurship’ (JOHANNISSON et al.,
1994, p. 351). Others similarly identify a ‘district
effect’ – the benefit from location within an industrial
district (BECCHETTI et al., 2007).7
 Regional Social Capital: Why it Matters
The additive beneficial effect of the milieu consists of
the complex combination of bonding and bridging
social capital which take on different meanings across
scales (WESTLUND et al., 2010). It is the optimal combi-
nation of local and non-local links and, more specifi-
cally, links to key innovative centres elsewhere, that
provide an innovative milieu with its competitiveness
(CREVOISIER and JEANNERAT , 2009).
CONCLUSIONS
The paper ends by emphasizing a few key points. First,
social capital is a concept that embodies how people
function productively with other people, primarily
locally but also at a distance. Non-local ties are at least
as important as local ones. Second, social capital is part
of a region’s ‘collective personality’, out of which inno-
vation takes place (WESTLUND and BOLTON , 2003).
Third, social capital is central to the development of
regions; while hard to identify and challenging to
measure, its effects are visible in many ways. Across-
the-board policies will not work, since both public
intervention and public–private cooperation are
needed to stimulate network formation through the
building up of social capital in each region (ASHEIM ,
2007). ‘Local circumstances are the only meaningful
point of departure’ (MORGAN , 2004, p. 18). Social
capital and networks open to new members and new
ideas are necessary for entrepreneurial social infrastructure,
which converts social capital into organizational forms
that facilitate collective action (FLORA , 1998; FLORA
and FLORA , 1993). These are similar to four meta-pro-
cesses that CAMAGNI (1995) suggests must take place in
less-favoured regions: the involvement of local
resources, the creation of synergies among local actors
and factors, a link-up with external energies, and a con-
tinued process of innovation.
The research reviewed here reinforces the idea that
social capital can be created and that it matters for devel-
opment. LORENZEN (2007, p. 813) recommends
‘inspiring and forcing regions with a low stock of
social capital to invest in it.’ Social capital appears to
facilitate the visionary capability of a group and its
ability for collective learning (HARMAAKORPI and
UOTILA , 2006). As a regional personality trait,
however, it is difficult if not impossible to imitate one
region’s social capital process in other places. Social
capital is a unique, locally specific process.
Perhaps most ignored in discussions of innovative
milieux and social capital, in their focus on the local
or regional level, is attention to the global level. It is
understood that the global economy is global, but that
does not always translate into how to bring the global
sphere into the local region in a real manner, employing
both local buzz and global pipelines (HASSINK , 2007).
Future research on social capital should acknowledge
that although it tends to be locally, industry and
1033
network specific, it also connects with institutions and
networks elsewhere.
Methodologically, new methods are required that
take account of the processes of social capital – when,
why and how social capital is built and exchanged.
‘Ordinary’ business purposes are certainly different
from the pursuit of innovation, for which fewer, more
knowledgeable partners are needed (GIULIANI , 2007).
To distinguish these situations, richer and more detailed
research – mainly qualitative in nature – is needed
(ANDERSON et al., 2007; STABER , 2007). This may
tend to ensure that social capital is likely to remain
within the domain of regional studies, as opposed to
regional science (MC CANN , 2007). Regional research
and other interdisciplinary fields need more concepts
such as social capital to bridge and link, rather than to
bond, the like-minded more strongly.
Acknowledgments – Earlier versions of this paper were
presented at the ‘The Learning Region Comes of Age?’
seminar held at Tilburg University, Tilburg, the Netherlands,
in June 2007; and at the North American Meetings of the
Regional Science Association, Savannah, GA, USA, in
November 2007. Thanks are extended to Frans Boekema
and Roel Rutten for prompting the author to undertake
this research. The author is grateful for the comments of
James Baginski, Roberta Capello and two anonymous
reviewers. However, all remaining errors are the author’s
alone.
NOTES
1. Following COLEMAN (1988), KEELEY (2007, pp. 105–
106) maintains that human capital and social capital ‘are
inextricably linked … social capital promotes the develop-
ment of human capital and human capital promotes the
development of social capital, although the mechanics of
the process are complex.’ In chicken-and-egg fashion,
social capital forms human capital through improved edu-
cation and health; human capital forms social capital as
education boosts civic and social engagement.
2. It is not claimed that this is a comprehensive review. There
is no way to review the entire field on social capital, a
phrase found in 4637 articles in March 2011, according
to ISI’s Social Science Citation Index (SSCI). To this
number must be added hundreds of books and chapters
not searchable in the SSCI. The website Social Capital
Gateway (SABATINI , 2011) is a useful resource.
3. HOLT (2008) extends Bourdieu’s individual focus to
embodied and internalized social capital, and the various
starting points of individuals depending on their gender,
race, sexuality and disability. Similarly, WARR (2006)
suggests that building social capital in circumstances of dis-
advantage is a particular challenge and must be a socially
transformative ‘art’. MILES and TULLY (2007) see a role
for regional development agencies in the distressed com-
munities in which many such individuals live.
4. In general, although The World Bank lent a great deal of
visibility to the concept of social capital, its predominant
1034 Edward J. Malecki
focus is on minimal social capital, in UPHOFF ’s (2000) 6. The author thanks an anonymous reviewer for suggesting
typology, emphasizing social capital that can be replaced this interpretation.
by institutions. For critiques of The World Bank’s role, 7. ‘Relational capital’ rather than social capital is the preferred
see FINE (1999, 2007). term in research on industrial districts (CAMAGNI , 2008;
5. The literatures on trust and social capital appear to have CAPELLO and FAGGIAN , 2005; MOLINA -MORALES and
developed largely independently; few works on one MARTINEZ -FERNANDEZ , 2006).
topic cite work on the other.

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