Social Capital and Its Role in Realizing Knowledge-Based Economy

In knowledge-based economy, the production, distribution and application of knowledge are the main factors stimulating economic growth, wealth creation and employment in all economic activities. Social capital, with its pivotal role in facilitating cooperation, significantly contributes to production of knowledge because in the present era, science and technology, have kept distant from randomness and isolated individuality more than any other period in the history, and they have turned into collective phenomena. Nowadays, networks norms and trust, as the pillars of social capital, play an important role in scientific and technological developments. Impersonal transaction is another feature of the knowledge-based economy. Deficiency of social capital in the economy is noticeable in these forms: lack of confidence, trade recession, absence of job specialization and division of labor, lack of adherence to contracts, and non-guaranteed property rights. Social capital, as a set of social norms that lead to trust and commitment to obligations and facilitate the relations, in general, and economic relations, in particular, would be highly effectual in forming the transactions in this era. This descriptive–analytical research studies the challenges for Iranian economy to meet the goal of knowledge-based economy. Moreover, it analyses the role of social capital to set the stage for the realization of the knowledge-based economy. The results are: 1- an adequate and effective level of social capital is one of the prerequisites to achieve knowledge-based economy. 2- Social capital is conducive to the realization of the knowledge-based economy through reducing transaction costs, securing intellectual property rights, paving the way for human capital development and encouraging people to share their ideas.