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Support Networks and Trust: How Social Capital Facilitates Economic Outcomes for Small Businesses

By Sue Kilpatrick and Rowena Bell


Social capital (networks, values, trust and commitment) facilitates learning and change in communities by ‘oiling ’ the processes of accessing and acquiring new knowledge, skills and values. The literature on social capital argues that high levels of social capital lead to strong economic performance (Putnam, 1993). Development and maintenance of a strong economy requires an ability and willingness to adapt in the light of external pressures and opportunities. This in turn requires businesses to make appropriate and successful changes to their practices. This paper considers how social capital is used by a group of small businesses as they make changes which improve business outcomes. The paper examines a learning community of farm businesses (a communityof-practice rather than a geographic community). It traces the way in which the community deliberately structures its activities so as to develop and accumulate social capital. The paper also examines the outcomes of the use of social capital in learning processes of members. Much of the literature on social capital focuses o

Year: 2001
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