Creating Shared Value: Social Capital as a Source to Drive Next Wave of Innovation for Socioeconomic Revenues

The idea “Creating shared value” (CSV) offers a resolute direction to the debate on the link between business and society which can be restored through three distinct actions such as a) reconceiving products and markets; b) redefining productivity in the value chain; and c) building supportive industry clusters. The critical analysis predicts that the path of these actions is progressive in nature and their scope apparently ranges from narrow to wider deliberations. Keeping variant scope of proposed actions, this particular paper encapsulates only first course of action which indirectly is anticipating a new wave of innovation. For this new wave of innovation, the role of social capital is explored to determine the extent this capital can drive next wave of innovation. In this regard, a model is proposed to predict the link between various dimensions of social capital and innovation that can produce both social and business revenues. The proposed model is based on the assumption that social capital is not limited to network theory only rather its origins are deep rooted and relations with community are more important and relevant. If organizations emphasize more and invest in developing relationships with network actors like suppliers, customers and rivalry firms, then potential benefits of social capital might be unnoticed. Therefore, similar to defining ‘value’ too narrowly due to strategic myopia, keeping the social circle of small radius also limit the organization’s ability to exploit the embedded potential of social capital.