Chapter 3: Social Capital, Social Innovation and Social Enterprise: The Virtuous Circle

Social capital, according to Pierre Bourdieu, is “the sum of the resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less institutionalized relationships of mutual acquaintance and recognition” (Bourdieu & Wacquant, 1992, p. 119). Robert D. Putnam (1993) agrees, characterizing social capital as predominantly in the nature of a public good. Ongoing global economic events have highlighted some of the weaknesses of free market capitalism. It is being suggested that social enterprises with their efforts to blend societal objectives and economic efficiency can play a role of catalysts in accomplishing this equilibrium. Given their positioning toward meeting dual goals rather than merely maximizing profit, social enterprises can function in zones where there are insufficient inducements for private sector activity. Thereby social enterprises fill the hiatus between the state and market provision. This chapter aims to conceptualize the process of innovation and the potential influence of social capital on social enterprises. Value created by a social enterprise emphasizes the importance of sharing benefits among its stakeholders. This chapter examines the ways in which social enterprises co-create value for society and how social enterprises inherit, generate and invest in social capital.