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

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    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 romoting social capital.
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherDRUID - Danish Research Unit for Industrial Dynamics
    Number of pages21
    ISBN (Print)8778731887
    Publication statusPublished - 2005
    SeriesDRUID Working Paper
    Number05-22

    Cite this

    Lorenzen, M. (2005). Localized Learning and Social Capital: The Geography Effect in Technological and Institutional Dynamics . DRUID - Danish Research Unit for Industrial Dynamics. DRUID Working Paper, No. 05-22