Social Capital

A core task in a strategic partnership between a university and a company is to actively manage the creation of the social capital in the partnership. Social capital is an aggregate of all of the relationships, knowledge, intangible assets and resources that are involved in the partnership. In common with other forms of capital, social capital is a valuable commodity, and it can be accrued or depleted over time.

Social capital has a number of different dimensions:

Human – individual people and their skills and competencies, person-to-person networks, socialised knowledge.

Structural – companies, university organisations (faculties, schools, innovation centres), study programmes, hard and soft infrastructure.

Interrelational – interpersonal trust, confidence, shared vision, coherent or complementary values, behaviours, and culture.

Once a fund of social capital has been built, then if it is managed correctly, it can be compounded. A successful interaction or project between two partners leaves a positive halo effect. Problems were overcome together, trust between different team members has been developed, both organisations have flexed to achieve the common goal. This success has boosted the fund of social capital. If it is maintained, then the next project that arises between the partners can benefit from it. The organisations now understand more about themselves and their partner. The next project can be more ambitious, longer term, more complex, but still the partners will feel confident that their pooled resources and the social capital they have developed will make the project a success.

In common with financial capital social capital can be created through investment, harvested for value through careful exploitation, and wasted through inexpert or clumsy management. For that reason, relationship managers are crucial for developing and exploiting social capital.

Chapter 22 of the playbook.