social capital essay question

Social capital: Why we need it and how we can create more of it

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Isabel v. sawhill isabel v. sawhill senior fellow emeritus - economic studies , center for economic security and opportunity @isawhill.

July 16, 2020

The phrase “social capital” has been used to describe relationships between individuals that facilitate the kind of social trust that can strengthen communities. The lack of it may explain why Trump was elected, why our health and longevity have been deteriorating, and why economic growth has slowed. Some scholars have noted that social capital is eroding. But, to what extent is this true? And even if the diagnosis is correct, what could be done to remedy the situation?

In this essay, Sawhill unpacks the meaning of social capital, examines recent trends in the U.S., and makes a case for why it is important. She ends by suggesting a few ways in which we might create more social capital: universal national service, an enhanced subsidy for charitable giving, and additional resources and flexibility for local communities so that they can innovate and rebuild in ways that fit their own values and circumstances. Leadership that is at once moral and effective at every level from the neighborhood to the White House will be critical to that revival.

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Social Capital and the Economy Essay

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There is a connection between economics and society, but neither sociologists nor economists give this connection much attention. Economic transaction influence society just as society determines economic exchange. One of the obvious connections that have been identified between society and economy is social capital.

Money is not the only form of capital, although economists ignore other forms of capital such as social/cultural capital. Social capital is gained through education and personal connection with the elite or influential members of the society (Biggart and Guillen, 1999).

Some people have more of this capital due to being born into certain families and through inheritance. Influential people are members of certain exclusive clubs and being a member is very beneficial. Social exchange is maintained through the exchange of symbolic goods.

In the modern workplace, people are able to rise to the top are often those who are able to access senior managers and board members. These people are accessed in informal places such as exclusive clubs, churches, gatherings, and other social places.

Developing social networks is a form of investment as the networks are important in getting a job or a promotion. Networking is therefore an investment in creating social capital.

Being born into a rich and influential family gives a person contact with other rich and equally powerful people; hence, it is possible to get a good job or even capital to start a venture. Social capital introduces the element of inclusion as well as exclusions.

From an economic perspective, social capital suggests that money is more than a measure of economic value. It can create meaning and identity and meaning can be ascribed to it as well.

Economic theory discusses elements such as perfect competition and other forms of economic relations, but at the heart of exchange is a social relation. People do now want money only for what the money can buy but its impact on social relations with others.

A proper understanding of capital, therefore, goes beyond definition given in economic theory. Modern understanding of what capital was developed a few centuries ago after the rise of capitalism. The idea of capitalism has reduced all forms of exchange to mere mercantile exchange, which is oriented towards profit maximization.

Related to social capital is the cultural capital. Cultural capital is converted into other forms of capital. Cultural capital such as higher education cannot be measured simply in monetary values or return.

There are more returns achieved by investing in education that economists do not measure. It is through education that cultural capital is transmitted from one generation to the next.

Accumulation of social capital takes time, sacrifice, and not just monetary investment. Mastering calculus, for example, takes time and many sleepless nights. Possessors of education of some forms of cultural capital also gain additional benefits such as the distinction, respect, and even gains new friends and influence people in society.

These gains can be transmitted to future generations of a person. The function of money is to give a value to all forms of capital.

If membership of a certain club or possession of a degree gives a person the ability to make huge amount of money at some future date, then the social or cultural value accrued through the membership of the club of acquisition of the degree is tremendous.

In the modern world, money is becoming intangible and cultural. Relations matter a lot especially when getting credit. A person with a good reputation is likely to get a loan than a person who is not. In the article by Quinn (2008), the question about social relations within the society and economy is again highlighted.

Economic theory principally dwells on the forces of demand and supply as the soul of the market. However, the question is whether markets should be amoral or aligned with acceptable morals and social values. Most people believe that life in itself is valuable and wagering on it is immoral and completely unacceptable.

However, it is clear that some financial products created as a form of investment can be used wager on the death of others. From a market point of view, buying an insurance policy from a person who is terminally ill makes perfect sense. The buyer is likely to earn handsome profit, which is the essence of investment but is doing so right.

Markets are not perfect and often they fail. Government intervention in an industry is desirable if there are imperfections that may lead to market failure. Buyers for instance, may get deceptive information from sellers through advertisement and hence make wrong decisions.

In the long run, it is in the interest of the sellers to provide accurate information to avoid alienating potential buyers, but unscrupulous business people may want to maximize short-run revenue by duping buyers. Externalities also are a source of market imperfections that imposes a social cost on the society.

Externalities that results from operating in a certain industry may further entrench the position of natural monopolies due to decreasing costs. The presence of market imperfections makes a strong case for government intervention.

Health care is a scarce resource and like all resources, it should be rationed one way or another, either through market forces or through government intervention. Markets through prices ration better compared to government central planners.

The most obvious reason for government intervention in health care is not to achieve distributional objective or social equity, but correct informational failures in health care markets. Without regulation, a few players would possibly dominate healthcare and this justifies government intervention.

There is also the presence of externalities that call for regulation. Healthcare is an industry that does produce externality goods to some extent. For instance, vaccination and other devices supported by the government to curb some diseases do not only benefit individuals concerned but also the whole society.

Healthy people have lesser chances of contracting the disease once proper interventions are put in place.

Just as social capital is something that is generated from social relations and can be converted into economic capital, conditions in the market can affect the society. In the case of selling insurance in the secondary market, the basic premise on which insurance is built on refuse to hold.

In situations such as these, the prudent thing is for the government to intervene through law laws or changing of policies. Life insurance is taken in order to support dependents of the insured in case of death.

If so many people were left destitute and especially children after sudden death of their parents, the cost to the society would be tremendous. The actions of a free market can therefore negatively affect the society.

Consequently, the government has a role to play to ensure that market conditions align with social values and objectives. Economics and society are intertwined and should be studied together.

Biggart, N. W., and Guillen, M, F. (1999). “Developing difference: Social organization and the Rise of the auto industries of south Korea, Taiwan, Spain, and Argentina.” American Sociological Review (vol. 64, October 1999): 722-47.

Quinn, S. (2008). The Transformation of Morals in Markets: Death, Benefits and the Exchange of Life Insurance Policies. American Journal of Sociology, Vol. 114, No. 3 (November 2008), pp. 738-780

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Civil Society and Social Capital

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This chapter explores how humans collaborate with others outside their families and households to expand capabilities for wellbeing, particularly by creating and participating in civil society institutions. The chapter also analyses social capital and how it can be increased through mechanisms that include: learning in schools; participation in networks; enforcement of norms; development of societal aspirations; and efforts for social inclusion. There are tensions between cultural capital (discussed in the previous chapter) and social capital (this chapter) since access to the services of social capital—especially to bridging social capital—is much easier for people who share the cultural capital of the community’s dominant social group. Policy can enhance capabilities for wellbeing by ensuring persons are not disadvantaged as a result of ethnicity or other personal characteristic in their equitable access to services from all forms of capital.

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• Social capital
• Civil society
• Structural racism
• Interculturalism

We humans are social beings. Consistent with that observation, Chap. 3 has described how most of us cohabit with other people for long periods of our lives. This book now turns to how we humans collaborate outside our families and households to expand capabilities for wellbeing. This chapter focuses on collaboration in what is termed the third sector (Etzioni 1973 ; Corry 2010 ) or civil society (Seligman 1992 ; Dekker and van den Broek 1998 ; Fukuyama 2001 ; Office for Civil Society 2010 ).

Despite nuanced differences in definitions offered for this aspect of social life, there is general agreement that the institutional core of civil society is “constituted by voluntary associations outside the sphere of the state and the economy” (Flyvbjerg 1998 , p. 210; see also Kumar 1993 , and Seligman 2002 ). Persons support these associations by donating time and finance to pursue common interests and shared values. In the UK Community Life Survey of 2015–2016, for example, 47 per cent of respondents reported providing unpaid service to a volunteer organisation at least once a month (70 per cent reported doing so at least once a year), and 73 per cent reported making a financial donation to charity during an average four-week period (Cabinet Office 2016 ). The first section of this chapter discusses these civil society institutions and their contribution to wellbeing.

A closely related idea, which is adopted in many wellbeing frameworks, is social capital (see the survey in Scrivens and Smith 2013 , part 3). This conveys the idea that social collaboration is easier when people are strongly connected to each other through established relationships in diverse social networks and by sharing accepted social norms (such as trust and civic co-operation; see Knack and Keefer 1997 ). This concept is explored in the second section, with a discussion of how social capital can be strengthened through learning in schools, participation in networks, enforcement of norms, development of societal aspirations and efforts for social inclusion.

The chapter’s third section focuses on social capital and ethnicity, observing that there are tensions between the concept of cultural capital discussed in the previous chapter and the concept of social capital discussed in this chapter. These tensions exist because access to services from social capital—especially from what is termed bridging social capital—is much easier for people who share the cultural capital of a community’s dominant cultural group. This creates and maintains privilege for the dominant group, to the disadvantage of outsiders’ wellbeing, so that reflective action is required to redress the balance. The chapter finishes with a brief conclusion.

The Institutions of Civil Society

In an open society, people create diverse social institutions to pursue common goals and shared values. Footnote 1 The National Council for Voluntary Organisations, for example, publishes data on UK institutions that inhabit the civil society space between state, businesses and individuals (NCVO 2017 ). Table 4.1 presents a count of the 390,000 formally incorporated organisations fitting that description. This sizeable number is not the full extent of voluntary collaboration by British citizens; the NCVO suggests 600,000 to 900,000 unincorporated associations could also be included in a broader definition of civil society (idem). The scale of activity that takes place in these incorporated and unincorporated institutions gives rise to our tenth proposition.

Proposition 10

Persons can access enhanced capabilities for wellbeing by participating in institutions of civil society to collaborate with others in the pursuit of common interests and shared values.

Civil society collaborations can be motivated by a desire to exclude outsiders (this is discussed below), but there are also strong elements of altruism and philanthropy. The largest category in Table 4.1 is comprised of general charities , which covers institutions that satisfy six criteria:

Registration as a general charity (including a public benefit test)

Formality (institutionalised to some extent)

Independence (separate from the state)

Non-profit distributing (profits not returned to owners or directors)

Self-governance

Voluntarism (some meaningful degree of voluntary participation)

Table 4.2 gives further details of this category, grouping the general charities in a list of primary activities adapted from Salamon and Anheier ( 1996 ). The largest group has social services as the primary purpose. Members in this group volunteer time and money to provide assistance to people in their communities who are experiencing difficulties. Thus, the common interests and values in these institutions centre on philanthropy and altruism, which can be recognised as important elements in civil society.

A good example is the network of Citizens Advice Bureaux operating in about 3000 locations throughout the United Kingdom. In 2015–2016, the Bureaux provided help to 3.1 million people directly, as well as many more who accessed Citizens Advice web pages. That assistance was offered by professional staff and more than 24,200 volunteers. The volunteered time was a substantial commitment, shown by calculating how much it would have cost for the same services to be provided by the professional staff (Citizens Advice 2014 , fn. 2, p. 4). In 2015–2016, this was estimated to be £114 million in England and Wales, and £10 million in Scotland. Footnote 2

Moving beyond this example, the Office of National Statistics uses survey data to estimate the value of volunteer time across all UK civil society institutions (ONS 2016 ; 2017 ). It focuses on people engaged in frequent formal volunteering; that is, residents who donate time at least once a month to a recognised institution. Figure 4.1 shows estimates for the decade 2005–2014. The impact of inflation has been removed from the series. Despite population growth over the same period, there is a downward trend. This is because the average time volunteered per person declined significantly over the decade, by 19.3 per cent (ONS 2016 , pp. 40–41).

Gross value added of frequent formal volunteering measured in 2014 prices, United Kingdom, 2005–2014. (Note: The impact of inflation has been removed using the GDP Deflator at Market Prices. Source : ONS ( 2016 , Fig. 8.2, p. 41) and HM Treasury ( 2017 ))

The estimates in Fig. 4.1 indicate the income volunteers might have earned if they had offered the same services in paid employment. Recall that Chap. 2 used this conceptualisation to estimate the opportunity cost of time spent by people in any valued activity (see the discussion around Fig. 2.1). The same understanding can be applied here, with some caveats. Volunteers participate in training and gain experience; hence, some of the time represents investment in developing human capital. Similarly, volunteering introduces persons to new social networks, opening up access to the community’s social capital (see the following section). Even allowing for these caveats, however, the high opportunity cost of volunteered time recorded in Fig. 4.1 suggests that, at least for some persons, living a valued kind of life includes helping other people (see Fujiwara et al. 2013 ; Jenkinson et al. 2013 ).

Social Capital

In 2008, the UK Government’s Foresight Project on mental capital and wellbeing commissioned the New Economics Foundation to develop a set of evidence-based actions that people can take to improve personal wellbeing. The resulting review of the science literature identified five actions that can be good for mental wellbeing if built into daily life. They are worth citing in full (Aked et al. 2008 , p. iii; Aked and Thompson 2011 , p. 8):

Connect… With the people around you. With family, friends, colleagues and neighbours. At home, work, school or in your local community. Think of these as the cornerstones of your life and invest time in developing them. Building these connections will support and enrich you every day. Be active… Go for a walk or run. Step outside. Cycle. Play a game. Garden. Dance. Exercising makes you feel good. Most importantly, discover a physical activity you enjoy and that suits your level of mobility and fitness. Take notice… Be curious. Catch sight of the beautiful. Remark on the unusual. Notice the changing seasons. Savour the moment, whether you are walking to work, eating lunch or talking to friends. Be aware of the world around you and what you are feeling. Reflecting on your experiences will help you appreciate what matters to you. Keep learning… Try something new. Rediscover an old interest. Sign up for that course. Take on a different responsibility at work. Fix a bike. Learn to play an instrument or how to cook your favourite food. Set a challenge you will enjoy achieving. Learning new things will make you more confident as well as being fun. Give… Do something nice for a friend, or a stranger. Thank someone. Smile. Volunteer your time. Join a community group. Look out, as well as in. Seeing yourself, and your happiness, linked to the wider community can be incredibly rewarding and creates connections with the people around you.

These five ways to wellbeing involve going outside a person’s immediate family and household . Moving beyond the relative safety of kith and kin, however, is also associated with risks to wellbeing, including potential harm arising from public shame and humiliation (Sen 1983 , p. 159; Zavaleta Reyles 2007 ). This was recognised in a famous passage of The Wealth of Nations (Smith 1776 , Vol. 2, pp. 399–400):

But in the present times, through a greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.

More recently, Wilkinson and Pickett ( 2009 ) have drawn on research by Scheff ( 1988 ) and Dickerson and Kemeny ( 2004 ) to argue that residents who live in countries with more inequality are vulnerable to greater anxiety about potential shame for low or falling social status. Anxiety leads to poorer national outcomes across multiple indicators of wellbeing. On this theme, Walker and Chase ( 2013 ) and Kent ( 2016 ) have documented how poverty debates in the United Kingdom have become dominated by private and public sector efforts to shame citizens judged as undeserving of welfare assistance.

Further social barriers exist when it is not always safe to trust others in day-to-day social relations (Fukuyama 1995 ), particularly if social and political institutions are not trustworthy (O’Neill 2002 ). In some countries, this can be because the State actively suppresses civil society institutions (Bernhard 1993 ; Chamberlain 1993 ). In some societies, it can be socially accepted for a person to promote interests of family and friends over the civil rights of a stranger, even when acting as a public official (Fukuyama 2001 , p. 9). Indeed, a country’s legal system can include laws and regulations designed to prevent members of specified social groups from participating in high status occupations or engaging in important public activities (Dasgupta 2005 ; Clark and Worger 2016 ).

Observations such as these lead to the idea that social collaboration is easier in some communities than in others. Expressing this idea using the capital stock metaphor, communities in which people find it easier to co-operate are said to have higher levels of social capital than communities where collaboration is more difficult (Knack and Keefer 1997 ; Woolcock 1998 ). This metaphor is not easily explained (Scrivens and Smith 2013 , p. 11), to the extent that Manski ( 2000 , p. 123) suggests “economists should use ‘social capital’ only as a lesson in the ambiguity of words”. Nevertheless, the following definitions capture different aspects of the term:

… “social capital” refers to features of social organization such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit. (Putnam 1995a , p. 67)

The social capital of a society includes the institutions, the relationships, the attitudes and values that govern interactions among people and contribute to economic and social development. (World Bank 1998 , p. 1)

Social capital is the shared knowledge, understandings, norms, rules, and expectations about patterns of interactions that groups of individuals bring to a recurrent activity. (Ostrom 2000 , p. 176)

… the definition of social capital is: networks together with shared norms, values and understandings that facilitate co-operation within or among groups. (OECD 2001 , p. 41)

Social capital generally refers to trust, concern for one’s associates, a willingness to live by the norms of one’s community and to punish those who do not. (Bowles and Gintis 2002 , p. F419)

A widely adopted classification recognises three forms of social capital (Szreter and Woolcock 2004 ; Keeley 2007 , p. 103; Poortinga 2012 ). Bonding social capital draws together groups of relatively homogenous people bound by considerations such as family, ethnicity, gender or social class. Bridging social capital supports collaboration among diverse social groups in a region or country. Linking social capital makes it easier for people to connect with the country’s major institutions exercising power, including local, regional and national government.

Bonding capital may be strong within each community of a country at the same time that bridging capital between different communities is weak. Sectarian conflict in Northern Ireland has been cited as an example (Leonard 2004 ; Campbell et al. 2010 ). Similarly, access to linking social capital may be far easier for members of some communities than for others, to the extent that some groups of citizens can be systematically disadvantaged in interactions with the country’s education, health, police and justice systems (Eddo-Lodge 2017 , Chap. 2; see also the following section).

The capital metaphor recognises that social capital can deteriorate with neglect, just as physical capital depreciates without maintenance, but can also be increased with suitable investment. Footnote 3 The first of these characteristics motivated Robert Putnam ( 1995a , 2000 ) to lament what he saw as the decline of social capital in the United States over the previous three decades, reflected in his symbol of an individual “bowling alone” rather than participating with others in organised competitions.

Putnam’s diagnosis has been criticised for overstating the extent of the problem and for failing to distinguish causes and effects of changes in the stock of social capital (Portes 1998 , pp. 18–21). Hall ( 1999 ), for example, found no evidence of an equivalent erosion of social capital in the United Kingdom (although this may be changing this century; see Richards and Heath 2015 , and Fig. 4.1 above). Nevertheless, there has been progress in understanding how investment in social capital can take place, summarised in the following proposition and explained in the remainder of this section.

Proposition 11

Investment in social capital can occur through mechanisms that include: learning in schools; participation in networks; enforcement of norms; development of societal aspirations and efforts for social inclusion.

Learning in Schools

Fukuyama ( 1999 , p. 257) observes that “one of the most important sources of social capital in contemporary societies is the educational system”. At school, young people learn how to collaborate with others outside their immediate family circle, including through participation in well-structured programmes of physical education (Bailey et al. 2013 ). Citizenship programmes may be included in a national curriculum (Department for Education 2013 ).

Putnam ( 1995b , p. 667) observes the powerful effects of schooling on later social and political participation, concluding: “highly educated people are much more likely to be joiners and trusters, partly because they are better off economically, but mostly because of the skills, resources, and inclinations that were imparted to them at home and in school”. Hall ( 1999 , pp. 435–437) similarly observes that radical transformation in the British education system between the 1950s and 1990s reduced segregation by class and gender, and increased attainment, which positively affected the country’s social capital.

Participation in Networks

A key idea in Coleman’s ( 1986 ) original essay is that social capital grows when persons participate in social networks, but this does not occur to the extent needed to maximise aggregate wellbeing because a large share of the benefits accrues to people other than the decision-maker. This is because the personal benefits of greater social capital are not restricted to a person’s own individual contribution.

Thus, social capital has a “public good” element (see Chap. 6 for further discussion on economic public goods), which tends to limit the scope for collaboration. To be successful, voluntary organisations must find ways to foster “a cooperative spirit, norms of reciprocity, and collective thinking beyond the boundaries of the group itself” (Stolle and Rochon 1998 , p. 49). The public good element of participation in social networks can justify supportive public policies (Hall 1999 , pp. 440–443). Footnote 4

Enforcement of Norms

The social capital definition of Bowles and Gintis ( 2002 ) cited above includes willingness to punish violations of community norms (see also Paldam and Svendsen 2000 , section 4, and Dasgupta 2005 , pp. S6–S7). To illustrate, suppose a person travelling on a bus is subjected to sustained verbal abuse; can the person rely on other passengers to intervene so that community norms of courtesy and respect are enforced? If the answer is no, then social capital is weak.

Similar to participation in networks, enforcement of norms has a public good element (benefits are enjoyed by a wider group than the enforcer), which is one of several reasons for funding judicial systems from the public purse. The development of human rights legislation has been important for building social capital, by providing a mechanism to enforce fundamental rights such as freedom from unfair discrimination and protection of private property.

Development of Societal Aspirations

There is a substantial literature on tensions between individual freedoms and societal aspirations. Margaret Thatcher famously claimed while UK Prime Minister that “there is no such thing as society”; instead “there is living tapestry of men and women and people” (Thatcher 1987 , pp. 30–31). That attitude reflects what Francis Fukuyama ( 1999 , pp. 5–6) has labelled a Great Disruption in social values from the mid-1960s to the early 1990s, which he suggests resulted in a culture of “intensive individualism” that “weakened the bonds holding families, neighborhoods, and nations together”.

In contrast, social capital can be strengthened when countries develop societal aspirations or common goals. This involves, but is not limited to, the political process. Societal aspirations must be supported by community rules that Fukuyama observes will always entail some limits to individual freedoms to facilitate new forms of collaboration and connectedness (idem, p. 15).

Efforts for Social Inclusion

In his UK study, Peter Hall reported that access to social capital is unevenly distributed among the British population, to the extent that “the more accurate image is of a nation divided between a well-connected and highly-active group of citizens with generally prosperous lives and another set of citizens whose associational life and involvement in politics are very limited” (Hall 1999 , p. 455). A later study similarly concluded that social capital in Britain operates to entrench privilege within and across generations, so that “encouraging greater formal civic engagement without tackling the root causes of socio-economic disadvantage may well aggravate rather than ameliorate social division” (Li et al. 2008 , p. 407).

These observations suggest that efforts to promote social inclusion, initiated in both the private and public sectors, are required to strengthen access by all citizens to the services provided by the country’s social capital. This is discussed in the following section.

Social Capital and Ethnicity

The social capital definitions listed in the previous section all refer to shared values or norms. Cultural values and accepted norms were discussed in Chap. 3 , which observed that they are learned by young persons within families and households . This was labelled as cultural capital, which differs from social capital in two important respects.

First, cultural capital in its primary sense is embodied in persons, whereas social capital “exists in the relations among persons” (Coleman 1986 , pp. S100–S101). Footnote 5 Second, while both types of capital are continuously transformed in a healthy society, cultural capital is conceptualised as connecting a person with previous and future generations (through the transmission of cultural heritage), whereas social capital connects a person with others in the current generation of living people.

There are inevitable tensions between cultural and social capital, since history shows repeatedly that access to services from a community’s social capital (as well as access to other private and public resources) is much easier for people who share the cultural capital of the community’s dominant social group. Indeed, this was a central message of Pierre Bourdieu’s ( 1973 , 1983 ) research, which developed the concept of cultural capital to explain why children from wealthy households achieve better results at school than children from lower socioeconomic groups.

Recall the example in the previous section of a bus passenger subjected to sustained verbal abuse. The answer to whether the passenger can rely on others to intervene may depend on the abused person’s ethnicity (see, for example, Qureshi 2017 ). If so, this is a community where access to services from social capital—especially from bridging social capital—is limited for people outside the dominant cultural group.

Further, shared norms held by the dominant group may include general acceptance, perhaps unvoiced, that it is legitimate for its members to treat people from other ethnic groups in a hostile manner that would be sanctioned if applied to anyone from the dominant group. This can include using humiliating language, acting with dishonest intent, providing discriminatory standards of service, denying entry to certain networks or clubs, or tolerating an ever-present threat of physical assault that generally goes unpunished (Coates 2015 ).

These possibilities represent “the dark side of social capital” (Portes 1998 , pp. 15–18; Gargiulo and Benassi 1999 ; Putnam 2000 , Chap. 22; Dasgupta 2005 , p. S17; van Deth and Zmerli 2010 ; Scrivens and Smith 2013 , p. 23). An often-cited study by Waldinger ( 1995 ) gave an example of how insiders of white ethnicity in the New York construction sector effectively mobilised social capital to sustain economic advantage at the expense of African-American, Caribbean and Korean outsiders. Footnote 6

Reni Eddo-Lodge ( 2017 , Chap. 3) has called this phenomenon “white privilege”, which a black person can only watch “as an outsider to the insularity of whiteness” (idem, p. 86). She goes on to say (idem, p. 87):

When I talk about white privilege, I don’t mean that white people have it easy, that they’ve never struggled, or that they’ve never lived in poverty. But white privilege is the fact that if you’re white, your race will almost certainly positively impact your life’s trajectory in some way. And you probably won’t even notice it.

The tendency for members of the dominant culture to be advantaged over outsiders is not restricted to individual behaviour. It can occur in the country’s state and civil society organisations, where it is labelled institutional or cultural discrimination (Dovidio et al. 2010 , pp. 10–11), or structural racism (Eddo-Lodge 2017 , p. 64). The Stephen Lawrence inquiry, for example, acknowledged institutional racism in the Metropolitan Police Service, which it defined as (Macpherson 1999 , section 6.34):

The collective failure of an organisation to provide an appropriate and professional service to people because of their colour, culture, or ethnic origin. It can be seen or detected in processes, attitudes and behaviour which amount to discrimination through unwitting prejudice, ignorance, thoughtlessness and racist stereotyping which disadvantage minority ethnic people.

Eddo-Lodge observes that the dominant group tend not to notice their advantage, while Macpherson speaks of prejudice that is unwitting. This is often how social capital operates. It is a resource that insiders find they can draw upon easily, or without conscious thought, while outsiders find they must collectively organise sustained social action to obtain some degree of equitable access to its services. Using terms introduced in Chap. 2 , the result of this social structure is that persons with similar personal abilities find they have unequal social capabilities depending on their ethnicity or some other personal characteristic.

Such an outcome is a fundamental challenge to policy. In the language of this book, equitable access to services from all forms of capital is necessary for citizens to have reasoned capabilities for leading valued lives. When large numbers of citizens, because of ethnicity or some other characteristic, face systematic limitations on their access to services from the country’s shared social capital, the capabilities of those citizens for leading valued lives are reduced and wellbeing is stunted. This leads to the following proposition.

Proposition 12

Policy can enhance capabilities for wellbeing by ensuring persons are not disadvantaged in their equitable access to services from the country’s capital stocks because of ethnicity or other personal characteristics.

Note that Proposition 12 goes well beyond the Pareto efficiency criterion for policy advice discussed in the opening chapter. This criterion supports economic policies if at least one person’s wellbeing is improved and no one is made worse off. In contrast, Proposition 12 sanctions proposals in which members of the dominant cultural group sacrifice historical privilege in order to improve equitable access of other people to the country’s social capital. It is possible that increasing the capabilities of people from minority groups would raise aggregate economic productivity to everyone’s potential benefit (see Arrow et al. 2000 ), but this is not presumed in Proposition 12 .

One way to address Proposition 12 is through efforts by individuals, private businesses, public officials and civil society institutions to foster interaction and dialogue among different cultural traditions. A term that has emerged for these efforts is interculturalism (Cantle 2012 ; Meer and Modood 2012 ; Taylor 2012 ; Zapata-Barrero 2015 ; Meer et al. 2016 ). The Council of Europe, for example, funds an Intercultural Cities Programme (Wood and Landry 2008 ; ICC 2016 ) that builds capacity, offers strategies and initiates projects to strengthen inclusive approaches that support diversity in cities.

Collaborations with people outside a person’s immediate family and household can greatly expand personal and social capabilities for wellbeing. In a free society, there is scope for a large number of diverse organisations to bring persons together to collaborate in the pursuit of common interests and shared values, supported by financial donations and volunteered time. These institutions make up the core of civil society.

Social capital is a metaphor reflecting the idea that interconnections among people contribute to wellbeing in a number of important ways. Social capital can be strengthened by conscious efforts in the private and public spheres, including through: learning in schools; participation in networks; enforcement of norms; development of societal aspirations; and efforts for social inclusion.

This chapter discussed social capital and ethnicity. This drew on Eddo-Lodge’s ( 2017 ) recent book, supporting its insistence that members of the dominant social group take active measures to sacrifice historical privilege in order to improve equitable access of other people to the country’s social capital. This finished by highlighting efforts by individuals, private businesses, public officials and civil society institutions to foster interculturalism.

Having considered choices made at the levels of individual persons, of households and families, and of communities, the stage is now set for the middle chapter of this book. It examines how participation in the market economy can contribute to expanded wellbeing, especially as a result of firms maintaining specialised capabilities for supplying goods and services needed by persons to live the kinds of lives they value.

The key philosophical text on open societies is Karl Popper’s The Open Society and Its Enemies , first published in two volumes in 1945, republished as one volume by Princeton University Press in Popper ( 2013 ).

These and other data in this paragraph are drawn from Citizens Advice ( 2016 ), Citizens Advice Northern Island ( 2015 ) and Citizens Advice Scotland ( 2016 ).

Bowles and Gintis ( 2002 , pp. F420–F421) object to this metaphor on the grounds that “capital refers to something that can be owned”. They therefore propose an alternative conceptualisation of “community governance”.

The value of participation in social networks leads Layard ( 2006 , p. C32) to warn economists not to advocate greater worker mobility (to generate higher incomes) without considering the associated effects on the quality of relationships in the community and in families.

Glaeser et al. ( 2002 , p. F438) object to the view of social capital as a community-level attribute “because economists find it difficult to think of communities as decision-makers” (ibid). They therefore define individual social capital to be embodied in a person, and aggregate social capital is calculated as a function of these individual social characteristics. We do think that approach is fruitful; the key issue in our view is access to services provided by social capital.

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100 Years of ‘Social Capital’

• The Evolving Concept of Social Capital: a Three-Stage Process
• Social Capital and the Creation of Collective Knowledge
• Social Capital, the Creation of Knowledge and Knowing Capacity, and Innovation
• Conclusion and Discussion Part of 2014 article “One Hundred Years of ‘Social Capital’”

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Corry.G.J.M. Ehlen. 2015. Co-creation of Innovation: Investment with and in Social Capital. Open University. Heerlen. The Netherlands. ISBN 97894 91825 77 4.

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Ehlen, C.G., Van der Klink, M., Boshuizen, H.P.A. (2014). One Hundred Years of ‘Social Capital’: Historical Development and Contribution to Collective Knowledge Creation in Organizational Innovation. Open University. Heerlen. The Netherlands.

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Home » One Hundred Years of ‘Social Capital’ » Conclusion and Discussion

• Conclusion and Discussion Part of 2014 article "One Hundred Years of ‘Social Capital’"

This article addressed the issue of the added value of the concept of Social Capital to innovation. The previous sections discussed the origins and evolution of this concept, presented its core and compared it with prevailing theories on innovation. This section reflects on the main question and discusses implications for further study of innovation processes from the perspective of Social Capital and for the use of the concept as guidance in the practice of sustainable change.

To summarize, the concept of Social Capital appears to have its origin in the field of educational innovation, almost 100 years ago. The renewed attention in social sciences, many decades later, proved its attractiveness for innovation purposes in different domains. Especially the three-dimensional model of Social Capital by Nahapiet and Ghoshal (1998) [1] presents clearly how the dynamics of Social Capital facilitate the exchange of knowledge and result in creation of new collective knowledge. In this way, Social Capital theory presents a holistic view on innovation processes, addressing different elements as networks, relations and affections, trust, common goals and shared understanding, tacit and explicit knowledge, knowing capacity, and interaction for collective knowledge. Especially research conducted in the past decade has led to more detailed insights into the dynamics and the multifaceted character of Social Capital and enhanced the use of this theory as a guideline for innovations.

Despite its origin and the increasing attention in very different domains, Social Capital theory remained fairly unknown in education field. In this domain, other theories and models prevail. Searching for the added value of Social Capital theory, this article has presented some leading theories that design and research innovations in education. All the theories discussed, emphasize important elements for understanding educational innovation. What they all have in common is that they are grounded in empirical research. But there are differences too. For instance, Rogers’s diffusion of innovation and the CBAM both elaborate on implementation of an topdown innovation, neither theory covers all phases of the innovation process as Social Capital theory does. Of the theories presented, the CBAM provides the most elaborate tools and instruments for guiding change, whereas the other discussed theories are much more generic. The main advantage of CHAT is its focus on creativity, but it does not consider the relational and affective elements. Social network theory emphasizes the importance of sharing information, but does not provide details about the process or does not show how this can be organized.

The main advantage of Social Capital theory for innovation seems to be its comprehensiveness, as it addresses many elements that play a role in innovations. It not only refers to investment in social networks or relationships, but also emphasizes  the necessary cognitive quality of connections and collective actions to produce new knowledge and knowledge products. It focuses on the powerful creativity of the connections and their collaboration.

Figure 3. Social Capital

Social Capital theory offers a holistic framework for the dynamic and complex process of co-creation. By doing so, it emphasizes the role of the actors/professionals as co-creators in innovation, and clarifies the necessary conditions in structure, relations, cognition and actions for the co-creation of new value. Social Capital theory does not provide procedures or rules for innovation, but its dimensions could be used as guideline for innovators.

In the last decade, educational innovation has comprised large-scale projects between several layers within an organization or between educational field and industries. This is often a diffuse process and it is not clear what will be the final result of the innovation. In these types of complex innovations positive social relations are necessary to connect the creativity and collective knowledge of the professionals. Such positive work climate will encourage them to be knowledge productive (Kessels & Keursten, 2002 [2] ) and ensure that the innovation is sustainable.

For this reasons, Social Capital theory seems to be most promising for explaining and designing these kinds of complex innovation processes. It specifies the value of the social processes for the creation of new collective knowledge, as Kessels and Poell describe (2004) [3] . The most important contribution of Social Capital theory is:  it makes clear that innovation should be viewed and guided from the perspective of the collectivity of professionals, because they are the intellectual and Social Capital of the organization, the hidden power that has to be revealed. Altogether the insights so far allow the conclusion that the theory of Social Capital appears to fit much better to the complexity of innovations in which professionals are perceived  as responsible innovators. In this way, innovating is a way of collective learning and acquiring of new knowledge and skills at the workplace.

It is worthwhile to conduct further research on innovation through the lens of Social Capital theory, to obtain more insights how professionals can handle complex innovations. The model of Nahapiet and Ghoshal offers a suitable framework for that purpose. Although it is promising as a theory, we are aware of possible limitations that need to be considered in further research. As researchers suggest (De Jong, 2010 [4] ; Kilpatrick, et al. , 2003 [5] ; Moolenaar, 2010 [6] ; Nahapiet & Ghoshal, 1998 [1] ) more clarity about the theory and its use can be provided by longitudinal or participative research in the complexity of the innovation processes, to see the dynamics of the components of Social Capital ‘at work’ and to discover factors that stimulate or hinder learning and innovating. Special attention could be given on the emotional aspect of the relational dimension, as previous research on the Social Capital model recommended this aspect (Weber & Weber, 2007 [7] ). It also would be interesting to focus on the collective actions, such as the decision-making process, because these elements are not yet worked out in the theory of Nahapiet and Ghoshal. Earlier scholars describe components of what we would call the ‘action dimension’ (Hanifan, 1916 [8] ; Coleman, 1990 [9] ; Lin, 2001 [10] ) but it is not yet connected to a coherent theory. A third important element to pay attention to in future research could be the ‘building’ of Social Capital. Then, as Woolcock (1998) [11] stated, ‘… it is logical that we would want to improve it, and at least maintain it, so as not to lose its significant benefits.’ In a society that needs creativity and innovation not only for economic purposes and educational goals, but also as a condition for life-long learning, the Social Capital perspective could become the power that drives sustainable innovation.

• Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage.  Academy of Management Review, 23 (2), 242-266 ^
• Kessels, J., & Keursten, P. (2002). Creating a knowledge productive work environment. LLinE, Lifelong Learning in Europe, 7 (2), 104-112 ^
• Kessels, J., & Poell, R. (2004). Andragogy and Social Capital Theory: The Implications for Human Resource Development. Advances in Developing Human Resources, 6 (2), 146-157 ^
• De Jong, T. (2010). Linking social capital to knowledge productivity: An explorative study on the relationship between social capital and learning in knowledge-productive networks . Universiteit Twente, Enschede ^
• Kilpatrick, S., Field, J., & Falk, I. (2003). Social capital: an analytical tool for exploring lifelong learning and community development. British Educational Research Journal , 417-433 ^
• Moolenaar, N. (2010). Ties with Potential: Nature, antecedents, and consequences of social networks in school teams. University of Amsterdam, Amsterdam ^
• Weber, B., & Weber, C. (2007). Corporate venture capital as a means of radical innovation: Relational fit, social capital, and knowledge transfer. Journal of Engineering and Technology Management, 24 (1-2), 11-35 ^
• Hanifan, L. J. (1916). The Rural School Community  Center.  Annals of the  American Academy of Political and Social Science, 67 , 130-138 ^
• Coleman, J. S. (1990). Social capital in the creation of human capital. American Journal of Sociology,  94 (S1), 95 ^
• Lin, N. (2001). Social capital. A Theory of Social Structure and Action. Cambridge University Press . New York ^
• Woolcock, M. (1998). Social capital and economic development: toward a theoretical synthesis and policy framework. Theory and society, 27 (2), 151-208 ^

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What Is Social Capital and Why Is It So Important?

Social capital is not a new term. In fact, social capital has been examined by many scholars for nearly 100 years. The importance of social capital is not unknown to us, but for some reason we seem to assign it a low value in modern society. We brush off the importance of social capital in exchange for convenience and “efficiency.” So what is social capital and why do we have so much trouble utilizing it correctly?

Simply put, social capital is the value derived from positive connections between people. In industry this is described as a set of various relationships, reputations, and assets, existing within an organization or with its partners and customers, that enable business processes to function as efficiently and effectively as possible. Additionally, for our purposes we will break it down into three constructs. The first construct is Relational Capital, which can be defined as the relationships we have with others in our world. The second construct is Cognitive Capital, which is the knowledge we have to share with the world around us. The third construct is Structural Capital, which is our individual brand and our processes.

Social Capital in Our World

You may think the statement “there is value in positive connections with others” is common sense. I would say that you are 100% accurate and it’s even supported by Yale University professor Dr. Laurie R. Santos. Santos asserts that the “sheer amount of time we spend around other people predicts how happy we are.” However, our society is in disagreement and this is demonstrated by the impacts of loneliness and the lack of trust we have with the institutions around us.

The Loneliness Epidemic

According to a 2018 survey conducted by Cigna, 48% of Generation Zers surveyed identified as lonely, 69% felt as though people around them are not “with them” and 68% feel like “nobody truly knows them.” Other generations also identified as being lonely overall. Millennials came in at 45%, Gen X came in at 45%, Boomers came in at 42% and the greatest generation came in at 38%. Historian and economist Neil Howe writes in Forbes that loneliness is no joke and can lead to psychiatric disorders as well as cellular changes that have been linked to heart disease, stroke, Alzheimer’s disease, and others. If we truly think there is value in positive connections with others, then why does nearly half of the current population of the U.S. feel lonely?

The Trust Landscape

Although there are several elements involved in social capital creation, trust is paramount. According to a 2019 survey conducted by Edelman , 49% of U.S. citizens distrust non-governmental organizations, businesses, government and media. A 2018 Gallup survey found only 48% of U.S. citizens have confidence in our institutions of higher education. Nearly half of the population doesn’t trust our institutions and nearly half don’t have confidence in our higher education systems. When trust collapses, relational capital collapses with it as trust is a key component to relationship building. Additionally, cognitive capital is no longer valued as its accuracy is called into question and structural capital is impacted by a lack of credibility.

Why Do We Not Trust?

In my view, trust is built over time through relationships and our society is not nurturing true relationships or being gracious with the amount of time we can spend with others. Our society, built on convenience and efficiency, only promotes relationships that exist on a transactional short-term basis. True human connection and genuine social capital are not necessary for efficiency and convenience and the idea of the “single-serving friend” is becoming all too real.

What’s Our Deal?

Once again, if you feel this is common sense and somehow doesn’t apply to you personally, let me pose a question. How much time do you spend bonding with others and how much time do you spend avoiding others? Mistakenly seeking self-isolation and convenience in our routines is hindering our ability to build social capital in our society.

According to Santos, automation in our society has increased efficiency, but at the cost of reduced interactions. A simple example of this can be seen in banks or retail establishments where ATMs and self-check stations. Although convenient, they are taking away what could be a positive human interaction. Another example would be our use of social media to keep up with the lives of friends and family where we opt out of actual face-to-face time or even a phone call because we can see that they are “doing ok” via a newsfeed. If we want to feel connected, why do we do these things?

According to Santos, we “feel” that we are busier than we ever have been in the history of human existence. We feel as though we don’t have time to have a face-to-face conversation with a teller or make time for those we care about with a phone call. Santos states that recent studies show that we actually have a lot more free time than we think and we are not truly as busy as we feel.

What Can We Do?

As individuals in our society we have to make a conscious choice to build social capital with those around us. We must take the time to form relational capital through trust and relationship building. We must make time to share and receive the cognitive capital we generate through conversation, and we must create bonds to build the structural capital that is needed to create institutions of good in our society.

Recently, scholars have started labeling two forms of social capital: bridging, or external connections between two groups; and bonding, or internal connections between people within the same group. To provide some simple examples: We can “bridge” by forming partnerships between collaborative work groups and we can “bond” by refilling a co-workers coffee. Going beyond the favors we can do for one another, we can make it a point to talk to others on a regular basis. Choose to wait in line and start a conversation with a stranger or reach out to those you love by phone or go visit them in person.

We have to commit to truly connect with those around us and choose time with others over self-isolation. We must realize that the less time we spend talking to one another, the less time we spend understanding one another as individuals. If we take the time to connect with others and build some social capital, maybe we can also take the time to overcome our own biases and help de-polarize our society.

Dr. Rick L. Mask, author of "Social Capital 2.0," received his Doctorate of Business Administration from the Department of Business Management at Capella University. He holds a master’s degree in education from Bethel University and is currently continuing his educational journey by working toward an MBA in Economics  from Southern New Hampshire University.

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Network effects: How to rebuild social capital and improve corporate performance

Social capital —or the presence of networks, relationships, shared norms, and trust among individuals, teams, and business leaders—is the glue that holds organizations together. When teams feel connected, they tend to get more work done and do it faster. When colleagues trust their managers and one another, they tend to be more engaged, more willing to go beyond minimum work requirements, more likely to stick around, and, as research shows , more likely to recommend that others join their organization. 1 Mark S. Granovetter, “The strength of weak ties,” American Journal of Sociology , May 1973, Volume 78, Number 6. Social capital matters to an organization’s performance.

Since the onset of the COVID-19 pandemic, however, connections in the workplace have been in short supply. We recently surveyed about 5,500 US workers on the state of their internal and external networks and connections. 2 The survey was administered in March 2022 to 5,583 US workers; 93 percent of the respondents were employed full time, 73 percent worked in the private sector, and 51 percent were women. More than three-quarters of the respondents working in “traditional” roles 3 A “traditional” role refers to a full-time job at a single company rather than a part-time, contract, or gig position with multiple companies. —especially women and frontline workers—report that they are connecting with others less frequently, have smaller networks, and spend less time and effort on relationship building since the start of the pandemic.

The decline is concerning, especially at a time when employees around the world are continuing to leave jobs at unprecedented rates, often without another in hand, despite a looming economic downturn. In McKinsey’s most recent Great Attrition research , for instance, nearly two out of five employees in a global sample spanning about 13,000 workers in six countries across 16 industries say they are considering leaving their jobs within the next three to six months. 4 Aaron De Smet, Bonnie Dowling, Bryan Hancock, and Bill Schaninger, “ The Great Attrition is making hiring harder. Are you searching the right talent pools? ,” McKinsey Quarterly , July 13, 2022.

Their employers, meanwhile, are left to manage the financial and opportunity costs associated with this level of attrition—according to Gallup, for example, the cost of replacing an individual employee can range from one-half to two times that employee’s annual salary, 5 Shane Mcfeely and Ben Wigert, “This fixable problem costs US businesses $1 trillion,” Gallup, March 13, 2019. and companies can experience significant productivity and knowledge losses.

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In a postpandemic environment, referrals, personal connections, and perceptions of how inclusive and communal  a company is will loom ever larger in people’s decisions about where to look for work—and whether to stay at their current jobs. 6 Sundiatu Dixon-Fyle, Kevin Dolan, Vivian Hunt, Sara Prince, Diversity wins: How inclusion matters , McKinsey, May 19, 2020. It’s imperative, then, that business leaders manage social capital in the same way they manage financial, human , and other forms of corporate capital: systematically and intentionally. They can start by assessing the company’s social capital along three dimensions 7 Paul S. Adler and Seok-Woo Kwon, “Social capital: Prospects for a new concept,” Academy of Management Review , January 2002. :

• Motivation. Are employees motivated to build and maintain relationships, and are they in an environment that encourages such relationship building?
• Access. Do employees have access to the networks and relationships they are looking to build?
• Ability. Do employees have what they need (such as time, resources, and skills) to build and maintain those networks and relationships?

Based on this assessment, leaders can use multiple levers  and a combination of organizational and individual initiatives to build or strengthen connections in the workplace. At the organization level, for instance, business leaders may embed network or community-building requirements into performance evaluations. At the individual level, they may offer coaching and mentorship to employees on ways to boost engagement and connections in the workplace.

In this article, we’ll share the findings from our research on the state of social capital and suggest ways that business leaders can help employees and teams rebuild, maintain, and use social capital to their benefit. Paying more attention to this form of corporate capital can help organizations bring people back to the office, cultivate distinctive workplaces, and improve productivity—and ultimately create better overall organizational performance.

The state of social capital

Decades of academic research on social capital have revealed its clear benefits for individuals and organizations—among them, lower turnover, improved team and individual performance, increased knowledge transfer, greater innovation, and increased career mobility. 8 See Daniel J. Braff, Martin Kilduff, and Ajay Mehra, “The social networks of high and low self-monitors: Implications for workplace performance,” Administrative Science Quarterly , 2001; Michael Bucy, Bill Schaninger, Kate Van Akin, and Brooke Weddle, “The science behind transformations: Maximizing value during implementation,” McKinsey, June 6, 2022; Jeffrey R. Hanson and David Krackhart, “Informal networks: The company behind the chart,” Harvard Business Review , July–August 1993; Andrew C. Inkpen and Eric W. K. Tsang, “Social capital, networks, and knowledge transfer,” Academy of Management Review , January 2005, Volume 30, Number 1; Jill E. Perry-Smith and Christina E. Shalley, “The social side of creativity: A static and dynamic social network perspective,” Academy of Management Review , January 2003, Volume 28, Number 1; Raymond T. Sparrowe et al., “Social networks and the performance of individuals and groups,” Academy of Management Journal , 2001, Volume 44, Number 2; Wenpin Tsai, “Knowledge transfer in interorganizational networks: Effects of network position and absorptive capacity on business unit innovation and performance,” Academy of Management Journal , 2001, Volume 44, Number 5.

Our own research on social capital shows that employees who feel more connected with people in their networks are two times more likely than those who feel less connected to report higher levels of sponsorship (or advocacy from a senior leader or colleague for their career advancement), one and a half times more likely to report a sense of belonging at work, and one and a half times more likely to report being engaged at work.

Employees who feel more connected with people in their networks are one and a half times more likely than their peers to report being engaged at work.

But the survey also reveals a slowdown in the development of exchange-based relationships in the workplace since the onset of the COVID-19 pandemic.

Motivation to build social capital

Less than half the respondents in our survey report making an effort to build their networks. Since the onset of the COVID-19 pandemic, only 24 percent of the nearly 5,500 respondents are focused on getting in touch with old contacts within their professional networks. Only 28 percent are focused on building new relationships, and 31 percent say they are focused on strengthening existing relationships. These data are in line with other research showing that, during the pandemic, employees have turned inward and focused mostly on maintaining connections with close associates and members of their own teams rather than building or maintaining relationships with newer colleagues or other indirect associates. 9 Nancy Baym, Jonathan Larson, and Ronnie Martin, “What a year of WFH has done to our relationships at work,” Harvard Business Review , March 22, 2021.

The lack of motivation to build social capital existed across all industries, although the percentages varied by sector. Some 53 percent of employees in the technology industry, for example, report that they are more likely to invest in strengthening existing relationships, compared with only 12 percent of employees in the public sector. There is a range of reasons for this disparity—among them, technology workers’ greater access to the tools and platforms needed to build and maintain remote communications.

The difference in motivation across genders and corporate roles is striking. About one-third of the men in our survey report investing energy in getting in touch with old contacts, building new relationships, and strengthening existing ones. By contrast, only one-quarter of women in our survey are doing the same, raising questions about the diminishing strength of women’s networks at a time when they are leaving the workforce in greater numbers  (Exhibit 1). 10 “ Women in the Workplace 2021 ,” LeanIn.Org and McKinsey, September 27, 2021. Meanwhile, about half of the senior leaders in our survey report investing energy to build their networks, compared with only about 15 percent of frontline workers.

Less surprising is that roughly half of the nontraditional workers (that is, those working freelance jobs or doing gig work) in our survey report an almost equal investment of energy in nurturing old and new contacts. After all, nontraditional workers need an abundance of connections to generate work assignments.

Access to social capital

Employees overall report having less access or feeling less connected to people within and outside their company networks. Of the more than 5,500 respondents to our survey, only 14 percent report that their networks have grown since the onset of the COVID-19 pandemic; 22 percent report feeling more connected with those in their company network; and 17 percent say they have had more contact with people outside their company network.

Again, the lack of access to social capital is uneven across industries. For example, about 30 percent of employees in the banking and technology sectors report having more contact with their networks since the start of the pandemic. By contrast, fewer than 10 percent of employees in the consumer and retail, education, healthcare systems and services, and public sectors report the same (Exhibit 2).

The lack of access is amplified for women and frontline workers. Only 11 percent of women in our research base (compared with 17 percent of men) say their network has grown over the past two years or so. Only 16 percent of women (compared with 28 percent of men) report feeling more connected, and only 12 percent of women (compared with 24 percent of men) report having more contact with their networks. In part, this may be a reflection of the additional demands women have taken on  during the COVID-19 pandemic. 11 “ Women in the Workplace 2021 ,” September 27, 2021.

Meanwhile, only 9 percent of frontline workers report feeling more connected with their networks over the past few years, compared with 22 percent of middle managers and 45 percent of senior leaders (Exhibit 3).

Access to social capital has remained steady for nontraditional workers compared with traditional workers. Twenty-eight percent of the nontraditional workers in our survey report that their network has grown, compared with 12 percent of traditional workers, and 45 percent report feeling more connected to their network, compared with just 19 percent of traditional workers.

The overall lack of employee access to social capital is amplified for women and frontline workers.

Overall, the respondents to our survey report engaging more frequently with contacts inside their companies than with those outside. 12 “Inside” contacts refer to a direct boss or manager; other leaders in the company; coworkers from respondent’s team, function, and department; coworkers from different functions and departments; and people in respondent’s company with similar interests, hobbies, or backgrounds (for instance, in employee resource groups and affinity groups). “Outside” contacts refer to industry peers, clients, customers, coworkers from past employers, and alumni networks. And the numbers suggest that these interactions are mostly transactional: 57 percent of respondents report sharing work-related information with contacts, 48 percent report sharing career advice, and only 29 percent report engaging in social activities with contacts in their networks.

Ability to build social capital

Our research reveals that about half of all the respondents feel like they know how to build and maintain their networks. Forty-six percent of those surveyed say they believe building their professional connections is part of their job; 47 percent report having the time to build or maintain their networks—although those numbers are lower for frontline workers than for senior leaders and middle managers, likely because of the structure of frontline jobs and the emphasis on short-term tasks.

The previously mentioned gaps between traditional and nontraditional workers’ motivation and access seem to close when it comes to ability to build social capital. Forty-nine percent of nontraditional workers report that they feel like they know how to grow and maintain their networks, compared with 54 percent of traditional workers. Forty-four percent of nontraditional workers report that they believe building their professional network is part of their job, compared with 46 percent of traditional workers. And about half of both nontraditional and traditional workers (46 and 47 percent, respectively) report having the time to build or maintain their networks.

How to build (or rebuild) social capital

Our research reveals the shortfalls companies are experiencing when it comes to workplace connections, but business leaders will need to conduct their own systematic assessments of the state of social capital in their organizations and, based on their starting points, develop a targeted set of organization-wide and personalized initiatives  to close any gaps. McKinsey research shows that changes are more likely to stick  when leaders clearly and frequently communicate why changes are needed, update formal processes and systems to reinforce the changes, model the new ways of working themselves, and ensure that employees receive the coaching and training they need to be successful.

Motivation: Redefine roles and responsibilities

Companies can introduce social capital as a critical factor in employees’ career development, encourage them to build it, and hold them accountable for doing so. Senior leaders at one retail company, for example, are reevaluating their KPIs to determine whether they need to include more relational indicators (such as metrics tied to collaboration, apprenticing, and making connections) and reduce operational targets to give employees more time to build relationships and community. The team believes this approach will pay off over time by increasing knowledge sharing and employee engagement.

Business leaders should also take the time to determine where the motivation gaps are—our own data reveal concerns for frontline workers and women, for example. Business leaders could build heat maps of current employee resource groups and other affinity groups formed for those interested in connecting with others. Such an assessment may point to critical groups who are feeling left out. Once business leaders have this information, they can invest in programs that encourage employees’ participation in external networks (for instance, at professional conferences), facilitate interactions among current or former colleagues, and build alumni connections. Or they might dedicate resources toward networking opportunities for women, frontline workers, and other disproportionately affected groups.

Longer term, business leaders could aim to rewire their entire talent system—from recruiting to performance management—to motivate employees to focus on social capital. That might mean building terms like “connectivity” and “collaboration” into job descriptions, citing social capital explicitly as a core value for the organization, and rewarding employees at all levels for finding, building, and sustaining social capital. A US industrial services company, for example, instituted a national referral program that rewarded employees for recommending potential candidates for any role in any city and has used the resulting connections to strengthen its recruiting process. Meanwhile, some companies are recasting their exit interviews as introductions to alumni networks so employees can maintain connections with the organization.

Access: Map your networks

Our survey results show that access to social capital is a particular sticking point for employees, many of whom report feeling less connected to people both within and outside their company networks since the onset of the COVID-19 pandemic. To increase access, business leaders must first understand who has it—and who doesn’t. Advanced analytics can make it easier than it’s ever been to provide that understanding.

One electronics company, for instance, is using HR, facilities, and operations metadata (calendar invitations, email, HR information systems, and so on) and advanced analytics to map knowledge flows and other interpersonal exchanges across the organization. The company was able to identify the most plugged-in and influential employees and has systematically engaged these influencers  as critical partners in creating more connections among individuals and groups that likely wouldn’t have gotten together otherwise. Through its knowledge mapping, the company has created a reliable, repeatable process for monitoring community clusters and identifying opportunities to build or strengthen social capital.

Other companies have used sponsorship and mentorship programs to facilitate connections among employees and institutionalize the importance of social capital. One technology company, for instance, has established a mentor-matching service for female software developers after a survey revealed that fewer than a third of them had reported having a mentor at the company. And one multinational company makes a point of acknowledging “super sponsors” each year across geographies and business units. The annual awards have prompted others to raise their hands to become sponsors and mentors, thereby upping the social-capital quotient at the company.

Ability: Break through organizational barriers

Business leaders may consider assessing not just employees’ capabilities but also their mindsets and behaviors when it comes to building social capital. Leaders can hold focus groups with employees to learn more about what stands in the way of them building and maintaining their network. For in-person interactions, for instance, business leaders can redesign office spaces  to enable spontaneous collisions among employees who might be feeling less connected. To that end, they may build more meeting rooms to encourage collaboration. Or they may ensure that private office spaces are available for individuals who want or need them but also establish some open seating areas to encourage random interactions. The retail company mentioned earlier restructured its workweek to ensure that when employees are on-site, the time is intentionally used to create connections (such as brainstorming sessions and round-robin status updates) rather than to engage in “heads down” solo work that might be better suited to when an employee is working remotely.

Another good step is for business leaders to embed discussions about social capital into their learning programs—especially into their leadership development programs—to ensure that everyone understands its importance, how to build and maintain connections, and how to encourage others to do the same.

Business leaders often assume that workplace relationships just happen—and maybe that was more true before the onset of the COVID-19 pandemic. For a postpandemic, hybrid world of work , however, where the watercooler is likely a virtual one and team members’ in-office hours may be staggered, business leaders should think differently about collaboration and connectivity. Employees are looking for connection, meaning, and purpose at work. Social capital is no longer just nice to have. It’s becoming a core lever business leaders can use to attract, retain, and bring out the best in employees, enabling them to achieve (and even exceed) their performance goals. But leaders should manage social capital in the same way that they manage other types of corporate capital: intentionally.

Taylor Lauricella is an expert in McKinsey’s New York office, John Parsons is a senior partner in the Calgary office, Bill Schaninger is a senior partner in the Philadelphia office, and Brooke Weddle  is a partner in the Washington, DC, office.

The authors wish to thank Aaron De Smet, Samuel Lee, Laura Pineault, and Jane Qu for their contributions to this article.

This article was edited by Roberta Fusaro, an editorial director in the Waltham, Massachusetts, office.

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The Onset of the Gilded Age: a Historical Overview

This essay is about the onset of the Gilded Age, a period in American history roughly spanning the 1870s to 1900. It explores how the post-Civil War Reconstruction era laid the groundwork for rapid industrialization and economic expansion. Key developments, such as the completion of the Transcontinental Railroad and the rise of powerful industrialists like Andrew Carnegie and John D. Rockefeller, are highlighted. The essay discusses the laissez-faire political environment that allowed corporations to grow unchecked and the resulting economic growth and social inequalities. It also touches on the social challenges of the time, including poor working conditions and labor unrest, which eventually led to the Progressive Era reforms.

How it works

The Gilded Age, a term you might have come across in history classes, conjures images of opulence, towering skyscrapers, and sprawling mansions. Yet, beneath this surface glitter lies a complex narrative of economic growth, social upheaval, and technological innovation. The question of when this era truly began isn’t straightforward, as it didn’t start with a bang but rather evolved gradually through various significant events. Generally, historians agree that the Gilded Age roughly spanned from the 1870s to the turn of the century, around 1900.

However, to understand its onset, we need to delve into the post-Civil War period and the remarkable transformations that took place.

After the Civil War ended in 1865, the United States entered a period of Reconstruction, aiming to rebuild the devastated South and integrate formerly enslaved people into society. This era also laid the foundation for what would become the Gilded Age. One of the most pivotal developments was the completion of the Transcontinental Railroad in 1869. This massive engineering feat connected the East and West coasts, revolutionizing transportation, commerce, and communication. It symbolized a new era of national unity and economic potential, as goods, people, and ideas could move more freely and quickly across the country.

The 1870s are often pinpointed as the true beginning of the Gilded Age due to several key developments. The discovery of vast mineral resources like coal, iron, and oil fueled industrialization and drew significant investments. The steel industry, in particular, took off, thanks to innovations like the Bessemer process, which allowed for the mass production of steel. Andrew Carnegie’s rise in the steel industry exemplifies this period. His company, Carnegie Steel, revolutionized manufacturing and construction, paving the way for the modern skyscrapers and infrastructure we associate with this era.

During this time, the U.S. saw the emergence of powerful business magnates, sometimes called “robber barons,” who built vast fortunes and wielded enormous influence. John D. Rockefeller, for instance, founded Standard Oil and became one of the wealthiest individuals in history. Cornelius Vanderbilt, a railroad and shipping magnate, exemplified the entrepreneurial spirit and ruthless business practices that characterized the era. These industrialists could dominate entire industries, manipulate markets, and often exploited labor to maximize profits. Their monopolistic practices and the concentration of wealth in their hands contributed significantly to the era’s social and economic landscape.

Politically, the Gilded Age was marked by a laissez-faire approach, where the government largely refrained from regulating business activities. This lack of oversight allowed corporations to grow unchecked, leading to significant economic expansion but also rampant corruption. The infamous Credit Mobilier scandal of 1872, involving the Union Pacific Railroad and corrupt government officials, is a classic example of the era’s political corruption. Such scandals highlighted the close ties between business leaders and politicians, often at the expense of the public good.

Despite the era’s glittering achievements in wealth and technology, the Gilded Age was also a time of significant social challenges. Rapid urbanization led to overcrowded cities with poor living conditions for many. Industrial workers, including a large number of immigrants, often faced grueling working hours, low wages, and unsafe conditions. Labor unrest was common, with strikes and protests highlighting the growing tensions between workers and employers. The Great Railroad Strike of 1877 was one such event that underscored these issues, as workers protested wage cuts and poor working conditions, leading to violent clashes with authorities.

The social inequalities and hardships faced by many during the Gilded Age eventually set the stage for the Progressive Era, which sought to address these problems through reforms. Efforts to improve labor conditions, regulate businesses, and expand democratic participation aimed to correct the excesses and abuses of the Gilded Age. This subsequent period of reform highlights the enduring impact of the Gilded Age on American society and its legacy of both progress and inequity.

In summary, the Gilded Age didn’t have a precise start date but emerged gradually from the transformative post-Civil War period. The 1870s marked a significant turning point with the completion of the Transcontinental Railroad, the rise of powerful industrialists, and a political climate that favored economic growth over regulation. While the era is often remembered for its wealth and technological advancements, it also brought about significant social challenges and inequalities. Understanding the onset of the Gilded Age requires appreciating both its glittering achievements and the complex social dynamics that defined this fascinating chapter in American history.

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Wide majorities of Biden and Trump supporters oppose cuts to Social Security

Table of contents.

• Views on the efficiency of government
• Views on the government’s regulation of business
• Confidence in the nation’s ability to solve problems
• Views on the effect of government aid to the poor
• Views on government’s role in health care
• Views on the future of Social Security
• Trust in government
• Feelings toward the federal government
• Acknowledgments
• The American Trends Panel survey methodology

Pew Research Center conducted this study to understand Americans’ attitudes about U.S. government, such as its size and role.

This report is based primarily on a survey of 8,709 adults, including 7,166 registered voters, from April 8 to 14, 2024. Some of the analysis in this report is based on a survey of 8,638 adults from May 13 to 19, 2024.

Everyone who took part in these surveys is a member of the Center’s American Trends Panel (ATP), an online survey panel that is recruited through national, random sampling of residential addresses. This way nearly all U.S. adults have a chance of selection. The survey is weighted to be representative of the U.S. adult population by gender, race, ethnicity, partisan affiliation, education and other categories. Read more about the ATP’s methodology .

Here are the questions used for the report and its methodology .

While the economy, immigration and abortion have emerged as major issues in the 2024 election, Joe Biden and Donald Trump also have dramatically different ideas about the size and role of government.

These differences reflect decades-old divisions between Democrats and Republicans over the scope of government.

Among registered voters, large majorities of Biden supporters – roughly three-quarters or more – favor a bigger, more activist government.

• 74% say they would rather have a bigger government providing more services.
• 76% say government should do more to solve problems.
• 80% say government aid to the poor “does more good than harm.”

Trump supporters, by comparable margins, take the opposing view on all three questions.

The Pew Research Center survey of 8,709 adults – including 7,166 registered voters – conducted April 8-14, 2024, examines Americans’ views of the role and scope of government , the social safety net and long-term trends in trust in the federal government .

Democratic support for bigger government is little changed in the last five years but remains higher than it was a decade ago. Republicans’ views have shifted less over the last 10 years.

Among all adults, about three-quarters of Democrats and Democratic-leaning independents favor a bigger government, up from about six-in-ten in 2014 and 2015. The share of Republicans and Republican leaners who prefer a bigger government has increased only modestly over the same period.

Democratic support for bigger government, while slightly lower than in 2021 (78%), remains at nearly its highest level in five decades. During Bill Clinton’s presidency in the 1990s, fewer than half of Democrats said they preferred a bigger government with more services.

Voters continue to express very different views about government’s role in specific areas than about the government generally.

A large majority of voters (80%) – including 82% of Biden supporters and 78% of Trump supporters – say that in thinking about the long-term future of Social Security, benefits should not be reduced in any way.

However, Biden supporters are more likely than Trump supporters to say Social Security should cover more people with greater benefits.

• 46% of Biden supporters favor expanding Social Security coverage and benefits, compared with 28% of Trump supporters.

Most Americans (65%) continue to say the federal government has a responsibility to make sure all Americans have health care coverage.

Democrats overwhelmingly (88%) say the federal government has this responsibility, compared with 40% of Republicans.

The share of Republicans who say the government has a responsibility to provide health coverage has increased 8 percentage points since 2021, from 32% to 40%.

There are wide income differences among Republicans in opinions about the government’s role in health care:

• 56% of Republicans with lower family incomes say the government has a responsibility to provide health coverage for all, compared with 36% of those with middle incomes and 29% of higher-income Republicans.

When asked how the government should provide health coverage, 36% of Americans say it should be provided through a single national program, while 28% say it should be through a mix of government and private programs. These views have changed little in recent years.

Democrats continue to be more likely than Republicans to favor a “single payer” government health insurance program (53% vs. 18%).

Other key findings in this report

• Americans’ trust in the federal government remains low but has modestly increased since last year. Today, 22% of American adults say they trust the government to do what is right always or most of the time, which is up from 16% in June 2023.
• While the public overall is divided over the nation’s ability to solve important problems, young adults are notably pessimistic about the country’s ability to solve problems . About half of Americans (52%) say the U.S. can’t solve many of its important problems, while 47% say it can find a way to solve problems and get what it wants. Roughly six-in-ten adults under age 30 (62%) say the nation can’t solve major problems, the highest share in any age group and 16 points higher than two years ago.

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ABOUT PEW RESEARCH CENTER  Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of  The Pew Charitable Trusts .

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