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Business Clusters: Promoting Enterprise in Central And by Organisation for Economic Co-Operation a

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Additional resources for Business Clusters: Promoting Enterprise in Central And Eastern Europe (Local Economic and Employment Development)

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The success of the concept has been associated with a double use: both in a purposefully economic sense and metaphorically. The “capital” nature of social capital is increasingly documented through economic analysis dealing with its accumulative nature and its key role in lowering transactions costs. Meanwhile, the term is also used metaphorically, aimed at underlining the critical significance of social interactions. This leads to the popularisation of the concept together with a certain dilution of the original economic perspective.

Clusters and social capital are both deeply rooted in a local culture where overlapping social and business ties create a complex social fabric. Nevertheless, other empirical studies have shown that public support to social capital through promotion of business networks can have a positive impact on cluster building and on the performance of firms (Cooke and Clifton, 2002). Wales, for instance, sought to create supplier clubs and business networks to compensate for a lack of spontaneously forming networks, and this with a positive response.

Can social capital contribute to cluster construction? Social capital and economic performance Social capital has been identified as an integral component of social and economic development at both macro and micro levels. At macro level, Putman (1993), Helliwell (1996) and Fukuyama (1995) have found that regional measures of social capital correlate positively with various indices of economic performance. These studies seem to show that greater social capital translates into improved economic performance, although these conclusions have nevertheless been contradicted by research done in the Denmark, Ireland and Wales, which shows the complexity of the social capital notion applied to regional performance, and will be discussed further below (Cooke and Clifton, 2002).

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