The Learning Region: Impact of Social Capital and Weak Ties on Innovation

Abstract

Theories that emphasise the role of proximity and tacit knowledge in innovation processes highlight the importance of social interaction and networking for the diffusion of knowledge. A concept that captures the impact of human relations on economic activity is Social Capital. Using factorial analysis with data from the European Values Study we demonstrate empirically the multi-dimensionality of Social Capital. The obtained independent dimensions serve as inputs in a knowledge production function estimated for a sample of European regions. One of our major results is that the impact of Social Capital on regional innovation processes is significant and comparable to the importance of Human Capital. However, not all dimensions of Social Capital exhibit the same explanatory power. The dimension “Associational Activity” represents the strongest driving force for patenting activity. Hence, empirical evidence for the significance of weak ties in innovative processes is given.