Bonding Social Capital in Entrepreneurial Developing Communities - Survival Networks or Barriers?

Abstract

This paper focuses on the interaction between social capital and entrepreneurship in Aboriginal communities in Canada. Using statistical and interview data from three First Nations communities in northern Ontario, I examine if and how bonding networks turn into tangible resources for business development. The paper also highlights ways in which community relationships hinder entrepreneurship and turn into barriers to economic development. The paper concludes with examples of how insight into the interaction between public policy and social networks can help understand the barriers and opportunities facing community developers in marginalized communities around the world. ABSTRACTThis paper focuses on the interaction between social capital and entrepreneurship in Aboriginal communities in Canada. Using statistical and interview data from three First Nations communities in northern Ontario, I examine if and how bonding networks turn into tangible resources for business development. The paper also highlights ways in which community relationships hinder entrepreneurship and turn into barriers to economic development. The paper concludes with examples of how insight into the interaction between public policy and social networks can help understand the barriers and opportunities facing community developers in marginalized communities around the world.

The Downside of Social Capital in New Industry Creation

“…Even if social capital within a community is high, this does not imply that the resources that are percolating through social networks are necessarily valuable. In fact, given that social capital creates demands for conformity in ideas and values following from group participation and social control, the resources that group members can access may well be redundant and of little relevance for starting a new venture, let alone ventures in new industries (see also Levitte 2004;Florida, Mellander, and Stolarick 2008;Echebarria and Barrutia 2013). Following this line of reasoning, social capital within a regional community may be a limiting factor on the success of new business initiatives by its members (Westlund and Bolton 2003).…”

Impact of Information and Communication Technology on Social Capital in Aboriginal Communities in Canada

“…Levitte (2004) researched social capital in the context of aboriginal economic development in Canada. Social capital has been used to analyze traditional forms of Indigenous governance (Hunter, 2000;Schwab & Sutherland, 2001), sustainable development (Altman, 2001), welfare reform (Smith, 2001), and Indigenous learning communities (Schwab & Sutherland, 2001).…”

Healthy communities equal healthy ecosystems? Evolution (and breakdown) of a participatory ecological research project towards a community natural resource management process, San Miguel Chimalapa (Mexico)

“…Flora et al (2004) move beyond governmental powers, asserting that "Political capital consists of organization, connections, voice and power. Political capital is the ability of a group to influence the distribution of resources within a social unit, including helping set the agenda of what resources are available" (p. 108), and Levitte (2004) concludes, "Further analysis into relationships with external networks should address questions of power... It would be valuable to understand the power of regional, provincial, and national networks in shaping local economic development priorities and local decision-making processes...…”

“…Some authors suggest an examination of the 'weakness of weak ties'. As Levitte (2004) discusses "This is particularly true in the developing community context, where all too often external networks intervene with local ones, with no regard for local cultures and institutions ...The literature on the downside of social capital tends to focus on the problems arising from bonding relationships, but often ignores the potential of external networks, e.g. policy makers and NGOs, to be harmful" (p.58).…”

“…Subordinates can share their risk assessment with the higher-ranking members of the institutions by once again transferring the problems of risk. The GIEMPBI project suffered the effects of this 'transferred' institutional risk, when a response regarding funding from GEF-UNDP was consistently prolonged, eroding the social capital 70 constructed during three years of joint work (communities, institutions and researchers) introducing negative bridging social capital ("weaknesses of weak ties") (Levitte 2004).…”