BY PATRICIA RATTRAY
I have dedicated the last 20 years of my life to real estate, small business development, and community engagement. The most important factor that links these three passions is their reliance on social capital for success.
Daily, I see the importance of social capital in community and economic development. Successful local businesses, developers, and non-profit organizations with high levels of social capital navigate their networks like well-oiled machines. They rely heavily on referrals from the people they trust for information and services; they have more access to existing resources, and they can expand their resources more efficiently when needed. Furthermore, Social capital enables the identification of others’ skillsets that go far beyond what is reflected in a professional role or title. Business owners and investors who understand social capital can tap more deeply into the resources of their employees, neighbors, partners, and customers to discover the maximum potential benefits and build reciprocal trust. These behaviors also foster more equitable, inclusive interactions and cross-sector interactions.
Local consumers and real estate investors with high levels of social capital often prefer trusted vendors over unfamiliar, though potentially less expensive, options because buying decisions are never just about cost. By relying upon trusted networks, goodwill can more easily spread among mutual connections, along with high quality information exchanges, more efficiency, and increased predictability. When we choose vendors and products based solely on cost or quality, we forego the non-monetary benefits of social capital. This miscalculation diminishes opportunities for increased access to resources in all areas of life.
Scholars define social capital in numerous ways. Pennar describes social capital as a network “of social relationships that influences individual behavior and thereby affects economic growth” (Pennar 154). Alternatively, Janine Nahapiet and Sumantra Ghoshal describe it as “the sum of the actual and potential resources…derived from [this] network…” (Nahapiet and Ghoshal 243).
So, social capital points to our network, the resources that we gain from it, and the behaviors and interactions that result from and enable it. Such resources can be external, including gifts, tools, technology, knowledge and labor; and internal such as confidence, agency, a sense of belonging, status and safety.
Decades ago, high levels of social capital in most communities were taken for granted. On the East Coast of the US, each wave of immigrants arrived from a common homeland, and neighbors had frequent and sustained interactions across all areas of life. Neighbors shared the same language, culture, values, friends, intergenerational bonds, job opportunities and social circles (Côté and Erickson). These bonds flourished due to proximity, familial connections, and neighborhood homogeneity, which contributed to high-trust relationships and commercial transactions.
Nowadays, people are more transient, and neighborhoods are more multicultural, multilingual, and less multi-generational (Farrell and Lee). As a result, social capital is not built by the same traditional mechanisms. Yet, it is still essential for a high quality of life.
In the 2000 book, Bowling Alone, Robert Putnam explores how our nation has been suffering from a steady decline in social capital and civil society since the 1950’s (Putnam 288-289). Fundamental changes in how we work, go to school, and participate in civic organizations, in addition to increased engagement with electronic entertainment and technology, are some of the factors that have contributed to this decline.
Putnam’s research helps us “understand how social capital works its magic.” In summary, social capital in America allows citizens to:
- Resolve collective problems more easily
- Reduce the cost of everyday business and social transactions
- See how our fates are linked
- Test the veracity of our own views
- Enable the flow of information that facilitates achieving our goals
- Cope better with traumas and fight illness more effectively
Putnam encourages us to start rebuilding social capital by showing up again to those events and relationships that create it. This begs the question, how do we rebuild social capital if the very things that fostered it have been dramatically declining for so long, and entire generations lack role models for building it? According to Putnam and Feldstein, the “one key to creating social capital is to build redundancy of contact. Common spaces for common place encounters are prerequisites for common conversations and common debate” (291).
So, we must start getting together again in new ways, in our neighborhoods, towns and cities, but we must do it strategically. At minimum, building social capital requires us to commit to a sustained series of community interactions. I have created the Capital Conversation model for this purpose.
WHAT ARE CAPITAL CONVERSATIONS?
Capital Conversations are discussions that help build the social capital required for strong communities. They create regular opportunities for interaction across community spheres, creating the common ground, trusted networks and the modelling of effective social skills required for social capital to grow.
Capital Conversations are designed with these features to ensure the growth of social capital:
- Regular access to new people
- Low-barrier opportunities to make small contributions
- Intersecting social circles
- The identification of common ground & shared values
- The modelling of effective social and communication skills
There are 5 areas of common ground that I recommend for exploration through Capital Conversations. People from all industries, sectors and socio-economic levels can relate to these topics and bring rich perspectives to the table.
|The 5 Conversations|
|The Visitor Experience|
Copyright © 2021 Patricia Rattray.
I recommend Capital Conversations for anyone or any group that wants to be more resourceful and productive, seeks advancement at work, plans to gain leadership skills, hopes to make a difference in the community, intends to develop real estate, or expects to grow or start a business.
For more information about how social capital impacts your life and communities, please email Patricia Rattray at email@example.com.
Patricia Rattray has over 19 years of experience as a Realtor and 15 years of experience in business consulting. She works with homebuyers, investors, and developers; and she helps small businesses with strategy, operations, and growth.