Social Capital as a Determinant of Regional Competitiveness Andrew Harrison University of Teesside United Kingdom

1. Introduction  The concept of regional competitiveness (Krugman, 1996; Camagni, 2002)  The link between social capital, innovativeness, and regional competitiveness  Networks, creativity, and the creation of social capital  Theoretical model and DigitalCity case study

2. The Formation of Social Capital  Social capital: - structure of relationships in a society – founded on trust embodied in social norms and networks (Putman et al., 1993) - interaction between institutions and processes – exogenous or endogenous (Romer, 1986 & 1990, Lucas, 1988)  Networks and creativity contribute towards social capital and endogenous growth

3. Networks and Social Capital  Networks: business and research networks, technological networks, community networks  Interregional and international networks (Frenz & letto-Gillies, 2007; Döring & Schellenbach, 2006)  Network effects: benefits to each member increase with network size  Networks, increasing returns and social capital  Networks may lock in negative effects, so need to be developed and renewed

4. Creativity and Social Capital  Growing interest in creativity and the ‘creative class’ (Florida, 2002)  Florida’s creativity index  Creativity includes adaptation and application of existing ideas as well as the creation of new ideas and is often involves complementary effort  Creativity requires openness and creative tension and the absence of barriers to creativity (Bohm & Peat, 1987)

5. Social Capital, Innovativeness  Social capital, endogenous effects and innovativeness or ‘innovative milieu’  Innovativeness based on social capital cannot be copied or transferred from one region to another (Aula & Harmaakorpi, 2008) – hence regional competitiveness  Spread of knowledge through networks and creative cooperation

6. Reputation Building  Innovativeness and regional competitiveness promote reputation- and reputation contributes to social capital  Reputation is path dependent (David, 2007) – good and bad  ‘Lock-in’ may block out good or bad news  Reputation is complementary to regional competitiveness

The Theoretical Model Social Capital Reputation Innovativeness Regional Competitiveness Networks Institutions Creativity

7. The Case Study: DigitalCity  DigitalCity project: the latest in a line of regeneration initiatives  Links between the University of Teesside, Middlesbrough Borough Council, One NorthEast and Tees Valley Regeneration  Phase 1: Institute of Digital Media  Phase 2: The BoHo Zone

DigitalCity Phase 1: IDI  Business units  Studios for DigitalCity fellows and postgraduates  Specialist laboratories, innovation rooms and conference facilities

DigitalCity Phase 2: The BoHo Zone  Space for digital businesses and support services  Live-work accommodation for creative professionals  Specialist units for artists

8. Conclusion  DigitalCity links the University, the town centre and a new riverside development – physically and creatively  But... can Middlesbrough establish a creative culture with a legacy of industrial decline and social deprivation?  Perhaps – given its industrial ‘creativity’ in past?

Middlesbrough Transporter Bridge