Friday, May 26, 2006

Cash value of a social network!

Social capital - what's that?
To put it in a very simple terms, it means that "social networks have value". hmm...easy eh? What it refers to is a value created from the ties between people, groups, communities, societies - the value in a group and between the groups as well. And that covers all kinds of groups: social gatherings like going to a picnic with friends, business networks, proffessional organisations, etc; including both formal and informal networks. One of the visible indication of the value of the social network is that for example majority of working people - and not only in Estonia, but in other countries as well! - get their job through personal contact, friend of a friend etc, and not through an anonymous newspaper ad.

It could be even said that the cash value of the social network of an individual could be greater than the actual wealth accumulated by the person! And not only that. There are also evidences of measurable consequences of belonging to numerous groups: the latter is related to one's life expectancy, meaning that all other variables remaining the same (Pareto principle :)), one's life could be longer (happier :)), when one belongs to a variety of social and other groups, simply has ties with other people!! Can't recall right now, who was the one that called humans social animals!. Thus isolation from the society reduces possibilities of a long happy life (cheers to all friends!!). In contrary, people married or just belonging to clubs/societies are more likely to call themselves a happy people.

More to it - happyness as such as got very little to do with the financial wealth, but precisely more with the social capital. I have heard Nigeria being called the happiest nation in the world and that definitely is not linked to the purchasing power of people. Still certain level of financial security does raise the satisfation/happiness levels, but to a rather limited extent.

What's alarming is that the social capital is in decline globally. People have less ties with each other, they belong to a fewer number of groups and go less to, let's say, social gatherings, family picnics etc etc. Obviously there's a multitude of causes and effects that shape and result from these processes in societies - the globalisation including migration, transitional economies and new relationships between people created by transitions, use of telecommunication tools (the TV!!), women becoming more career oriented etc etc.

However it's obviously neither possible nor necessary to go back in time where no TV existed, instead innovation in creating solutions that help to create bonding (withing groups, with people similar to oneself) and bridging (between groups, between people that are different from oneself: religion, race, gender, nationality) social capital.

I'd be a good spot to write about social entrepreneurship, but that'll come some other time...:)

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Attended the Open Society Forum today, the keynote speaker being Robert Putnam - world's leading social capital guru. These above were some of the thoughts expressed mixed with mine...

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