Building Bridges and Breaking Bonds : Aspects of social capital in a regional strategic network

Abstract: Investing in cluster formation or encouraging companies to network in regional strategic networks is a common strategy used by municipalities to promote regional growth in peripheral regions. Previous research has investigated the significance of creating regional advantages by building clusters and regional networks, but researchers have not provided much insight into the problems facing the project management trying to implement such collaboration. In my thesis I describe and analyze a network project in order to shed light upon some of the complications that such a collaboration project might entail. My theoretical framework of analysis rests upon the concept of social capital, a concept that investigates the value that social contacts might incur.I have studied a designed network situated in the Swedish municipality of Söderhamn called Firsam. After the closure of the telecommunications factory of Ericsson/Emerson and the military airbase F15 Söderhamn lost 10 % of its local employment in 2004.The need for regional growth programmes therefore became dire. The companies that prior to the closure worked in close collaboration with the Ericsson/Emerson factory were also looking for new revenue streams to compensate for their loss of business. Collaboration with the local manufacturing companies to create innovative projects and to take on joint tenders seemed to be a perfect solution to the problems facing them and the municipality. In this spirit a regional strategic network called Firsam (Företag i regional samverkan) was initiated.I analyze the Firsam project using two different aspects of the concept social capital:”bonding” and”bridging”. The bonding form of social capital is associated with small and homogeneous groups that build prerequisites for long-term collaboration by forming close contacts and building trust. The bridging form of social capital creates an open stance towards social relations that enables new contacts to be formed outside one’s own socially established context.The bonding form of social capital provides prerequisites for close collaboration but can also result in close-mindedness and over-embeddedness in one’s own social context. Building bridging connections outside one’s own social context might encourage innovative thinking and spur entrepreneurship. The somewhat fleeting connections that are associated with the bridging form of social capital might on the other hand make it difficult to cultivate a common sense of trust within an existing group.These different manifestations of social capital create a paradox that might be hard to handle in the design of a regional strategic network. Is it best to support already existing network structures and impose the risk of creating a less innovative environment, or should members from outside the established social context be included in the network design to encourage innovative thinking? There are both positive and negative effects associated with either strategy. I shed light upon this paradox by analyzing the regional strategic network of Firsam.