Localized Learning and Social Capital The Geography Effect in Technological and Institutional Dynamics

Mark Lorenzen

No 05-22, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: Providing a concise working definition of social capital, this conceptual paper analyses why social capital is important for learning and economic development, why it has a regional dimension, and how it is created. It argues that with the rise of the Knowledge Economy, social capital is becoming valuable because it organizes markets, lowering business firms’ costs of coordinating and allowing them to flexibly connect and reconnect. Thus, it serves as a social framework for localized learning in both breadth and depth. The paper suggests that a range of social phenomena such as altruism, trust, participation, and inclusion, are created when a matrix of various social relations is combined with particular normative and cognitive social institutions that facilitate cooperation and reciprocity. Such a matrix of social relations, plus facilitating institutions, is what the paper defines as “social capital”. The paper further suggests that social capital is formed at the regional (rather than national or international) level, because it is at this level we find the densest matrices of social relations. The paper also offers a discussion of how regional policies may be suited for promoting social capital.

Keywords: Social capital; knowledge economy; regional dimension (search for similar items in EconPapers)
JEL-codes: D83 Z13 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-cbe, nep-geo, nep-ino, nep-knm, nep-pke, nep-soc and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:aal:abbswp:05-22

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