What Is Social Capital and How Do You Measure It?

So says Michael Arena, faculty member in Penn’s Masters in Organisational Dynamics and VP for Talent and Development at Amazon Web Services, in conversation with David Green in the latest series of the Digital HR Leaders podcast.

Throughout the episode, Michael and David explore the concept of innovation and how it is achieved and maintained in an organisation, especially in a remote environment. As the quote above suggests, it might not necessarily be the ideas, knowledge and capabilities – the human capital – that are lacking within organisations today, but the way in which workers come together to realise, collaborate and act on these ideas – the social capital.

In this article, we’ll explore the concept of social capital further, answering the following questions using insights from Michael’s episode:

• What is social capital?

• What’s the difference between bonding social capital and bridging social capital?

• How do you measure social capital?

• What are the key ethical principles when measuring social capital?

• What’s the impact of remote work on social capital?

On a societal level, the OECD describes social capital as “the links, shared values and understandings in society that enable individuals and groups to trust each other and so work together”.  

Applying the term in a work context, Michael Arena describes social capital as “the competitive advantage that is created based on the way an individual is connected to others” in his book, Adaptive Space. If human capital is about what an individual knows, social capital is about how well positioned that individual is to use what they know, in order to get work done.

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