In Generating Capital from Social Media, Mandviwalla and Watson discuss the process of converting forms of capital, but not the how.1 The article focuses on different frameworks modern companies can utilize to gain economic capital from social capital. However, like all things on the internet, building social capital and converting it is not new. The internet just allows us to do it faster and at scale.
The idea of social capital, and its conversion into other forms of capital, can trace its roots back to Pierre Bourdieu’s 1986 writing “The Forms of Capital”. Despite pulling heavily from Pierre Bourdieu’s baseline, the authors never mention or cite him. While I can understand the oversight, after 30 years there have been many updates to the concept, by not going to this source material the authors skip one key component to the conversion of capital, time. Building social capital is not something that happens overnight. As Bourdieu puts it:
By skipping this key concept of time, the authors make the assertion that all a company has to do is interact with its customers over social media and it will build social capital. Before the internet, this kind of social network building took years to payoff, and was limited in scope to a geographic area. Now, companies can interact and build capital across the world, but it still takes time. Maybe not years, but weeks and months. So how does a company build social capital across the world, where it has never interacted with customers before? With symbolic capital.
In 2010, Svendsen, Kjeldsen, and Noe published their conclusion on how to successfully transform social capital into economic capital.3 Of the four case studies they looked at, only one was successful. Upon analysis, the authors discovered that one of the main reasons for the success was the establishment of symbolic capital. By building symbolic capital, the entrepreneur was able to travel the area and quickly build social capital with a very diverse group of companies. He then connected different points of this network to generate connections that would never have been made. By doing so he grew business and made money in the process.
Mandviwalla and Watson do an excellent job of explaining the process of turning social capital into economic capital. However, the reading does not explain how to build the social capital. This is the hardest part. Yes, the internet has made it faster and easier, but without knowing how to build the capital, knowing how to transform it will do you no good.
1: Mandviwalla, Munir and Richard Watson. “Generating Capital from Social Media.” MIS Quarterly Executive, June 2014.
2: Bourdieu, P. “The Forms of Capital.” J. Richardson (Ed.) Handbook of Theory and Research for the Sociology of Education (New York, Greenwood).
3: Svendsen, Gunnar Lind Haase, Chris Kjeldsen, and Egon Noe, “How do private entrepreneurs transform local social capital into economic capital? Four case studies from rural Denmark.” Elsevier, The Journal of Social Economics, 39 (2010) 631-644.