What Is Social Capital?

Dr. Joan Cacciatore, a professor of social work at Arizona State University, once said, "There is simply no pill that can replace human connection...." In addition to improving our well-being and lengthening our lifespan, social interactions with other individuals and groups allow us to develop something called social capital. 

Social capital plays an essential role in both personal relationships and organizational success. Explore social capital below, and find resources to learn more about the subject.

Social capital definition 

Social capital refers to the benefits individuals and groups gain through social connections and relationships. By participating in groups or networks, we develop trust and reciprocity. These social ties also provide information about norms within a community or society. More social capital facilitates more interactions, improved collaborations, and a greater exchange of information and resources.

Why social capital matters

Social capital influences various aspects of individuals' lives and communities. Strong social connections contribute to well-being, resilience, and overall quality of life. Social capital can impact personal relationships, employment prospects, academic performance, and physical health. It also supports a community’s health and economic growth and can lower crime rates. Social capital is vital for civic engagement, community involvement, and collective action. 

Advantages and disadvantages of social capital

Social capital promotes trust and reciprocity among individuals and groups, two vital elements for effective community cooperation. It offers many advantages, but social capital also has disadvantages to consider.

Advantages of social capital

The common expression "it's who you know" highlights the omnipresence of social capital. Knowing the right people can help everyone, from a learner looking for an internship to an executive seeking a new challenge. Job referrals, business partnerships, and mentorship can evolve from social capital. If you've ever learned about a job opening from a friend or received a recommendation through word of mouth, that’s social capital at work. It also plays an important role when you network to find a mentor or set up an informational interview.

Social capital also provides emotional support, companionship, and a sense of belonging, and it reduces isolation, which can elevate your happiness. 

Empathy inspired by social capital can also benefit trust and reciprocity, which drives increased cooperation, collaboration, and information and knowledge sharing. In these ways, it can improve personal and professional relationships between individuals and across organizational networks. For example, social capital helps to enforce contracts between parties as each understands the norms around a strategic alliance. Plus, all stakeholders have greater motivation to work collaboratively and problem-solve together, with social capital encouraging everyone to see a common good or goal.

Disadvantages

Social capital also has limitations. Some people have different access to social capital and the ability to activate it. This lack of social capital can constrain particular groups, sometimes perpetually. For example, a disadvantaged immigrant population could have more difficulty finding jobs due to a shortage of social capital. Unfortunately, those with capital may also work to exclude those without. Individuals and groups can harness social capital to force others to conform rather than embrace differences.

6 types of social capital

Although various types of social capital may overlap, it’s helpful to differentiate between them to grasp what makes them unique. This section provides more detail on six common types of social capital, with an example of each. 

1. Structural social capital

Structural social capital refers to the assistance, information, or other resources you get through the people in your neighborhood, work, school, or other networks.

Example: You learn about a job opportunity through a fellow alum of your college.

2. Cognitive social capital

Cognitive social capital comes from sharing a common language, values, attitudes, and goals with others. It reflects our tendency to trust those who talk and act like us.

Example: Your business could have its own jargon or acronyms that mean nothing to those outside of your group.

3. Relational social capital

Relational social capital corresponds to structural and cognitive social capital but reflects the nature or quality of the relationships. Trust and trustworthiness, past interactions, shared norms, and identification with others will impact this type of social capital.

Example: A business typically has more relational capital with its long-standing customers than a new one.

4. Bonding 

Bonding refers to connections and relationships within homogeneous groups, such as family, close friends, or individuals with similar backgrounds, interests, or identities. Bonding strengthens social cohesion within these groups and provides emotional support and solidarity.

Example: A church group meeting every Friday for a fellowship potluck.

5. Bridging 

Bridging facilitates the exchange of ideas, information, and resources across groups in different communities or social circles. It refers to the shared interests between individuals across groups, which create shared goals and cooperation to achieve them.

Example: Parents from different neighborhoods and social groups coming together to put on a school fundraiser.

6. Linking 

Linking refers to human interaction between individuals and groups in different social strata. The parties in the relationship are aware of the status distinctions (e.g., wealth, education, power) but work together across those hierarchical levels. 

Example: A successful venture capitalist mentoring a fledgling entrepreneur. 

How to develop social capital

Social capital offers many benefits. You can grow your social capital by trying one or all of the following strategies:

• Join professional organizations or shared interest groups.  

• Participate in community activities.

• Get to know your neighbors.

• Network with colleagues.

• Maintain your friendships and personal relationships.

• Connect on social media.

• Assist strangers in need.

• Volunteer.

Next steps

Learning about social capital can help you understand the importance of social connections in personal and professional circles. Becoming more socially connected can help you build your social capital. 

To learn more about social capital and expand your network simultaneously, consider taking a course like  from the Wharton School of Business on Coursera. For more information on personal and professional well-being, consider taking , offered by the University of Michigan on Coursera. Both courses provide interesting material, flexible scheduling, and stellar customer reviews.