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Innovation and Small Enterprises in the Third World

Innovation and Small Enterprises in the Third World

New Horizons in the Economics of Innovation series

Edited by Meine Pieter van Dijk and Henry Sandee

Innovation is crucial for small enterprises to become and remain competitive in the global economy. In this book, the authors have combined theoretical insights with comprehensive case studies on innovation among small-scale enterprises in developing countries, paying particular attention to technological change in clusters of small firms.

Chapter 13: Social Capital and Technological Innovation Processes in the South

Árni Sverrisson

Subjects: development studies, development economics, economics and finance, development economics


Chapter 13 15/3/02 8:52 am Page 1 13. Social capital and technological innovation processes in the South Árni Sverrisson The purpose of this chapter is to explore the idea of social capital, which is economically useful social connectivity, and its potential for understanding technological innovation in small enterprise clusters or enterprise collectives in the South. The chapter draws on field research carried out by the author over a number of years in different African countries and literature describing other experiences there and elsewhere,1 under different research contracts, which are gratefully acknowledged. The concept of social capital provides us with an opportunity to sharpen the focus of earlier findings based on network analysis and clustering concepts (Van Dijk and Rabellotti, eds, 1997). Although social capital is obviously related to modes of networking which in turn often presuppose spatial clustering, the concept of social capital opens interesting avenues for exploring how economic development is shaped by social contexts. More specifically, the concept of social capital, in distinction from more general ideas about networks and clusters, poses issues of how social networks are managed; how connections are accumulated, rationalized, and eventually devalued; how network connections established for other reasons take on economic significance; and how economic connections achieve social significance. The assumption frequently implicit in discussions about networks in clusters, that these are more effective the denser, more intense and more frequently observed they are, is thereby questioned. Perhaps a little less but more focused networking and somewhat sparser but more...

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