Distance, operation overlap, sensory cues, and frequency of positive interactions have an influence on the probability individuals will maintain social ties and collaborate together. People tend to collaborate with stronger ties in their networks. This is why cities matter for economic development. While individuals and organizations can work together over a large distance, the closer they are the greater the chance they will collaborate with one another and maintain ties. Research on the effects of distance on collaboration has concluded collaboration drops off significantly between one-quarter to a mile. Companies in the same industry located less than a mile of each other experience ten times greater information flow than those located two to five miles apart. After five miles, knowledge flow drops off continually at a lesser rate. Interestingly specific industries become more concentrated than others.Read More
While technological advancements in video conferencing and other forms of electronic communication continually improve, they often fall short of communicating complex concepts and information. We have all experienced miscommunication because we missed subtle social cues, misinterpreted an email, or missed out on the context before or after a conference call. Meeting face-to-face is still the richest form of communication and has shown to be the most effective at social influence over other forms of communications.
In a 2009 survey of 2,300 subscribers of the Harvard Business Review, 95% of respondents said face-to-face meetings are “a key factor in successfully building and maintaining long-term relationships.” Being in the same place increases trust, a critical ingredient to the success of any innovation ecosystem. Other forms of communications such as phone calls, email, texting, and chat are regularly used to organize and amplify face-to-face communication. The more complex the information, the more important co-presence becomes.Read More
Networks are the way in which knowledge and know-how flow through the system. A city’s innovation capacity is dependent on the ability of its network to reduce the tie formation cost and speed of knowledge diffusion. The less time and cost to develop and maintain network ties the more complex tasks and the diverse mix of industries it can sustain. The large portion of capital within an economy is embedded in individuals as “human capital.” The value of the ability for people to cooperate is known as “social capital.”
Trust is the foundation of "social capital". It reduces the risk of working with others and increases the ability for people to connect to the network. This reduced risk directly affects the cost of doing business within an ecosystem. It not only affects the economic output of the city but also a company’s bottom line. When trust is low, there is a greater need for overly complicated and onerous legal mechanisms to ensure each parties protection. This friction inherently slows transactions and business development. A higher level of trust enables cooperation and tie formation. Research has shown that societies with lower levels of trust tend to have economies that are built on family ties rather than diverse networks of people.
While the level of trust between citizens is often ingrained within the city’s culture, other factors contribute to trust between individuals and the likelihood they will form social bonds. They include shared social focus, common friends, and mutual interests. A social focus could be a faith community, workplace, or child’s school. Share friends transfer an implicit trust. Mutual interest or characteristics are summed up by the familiar adage “Birds of a feather flock together.” Similar experiences, backgrounds, and interest are touchstones that can elicit interaction resulting in long-term relationships. These characteristics of tie formation increase the probability we will trust them.Read More