Understanding ‘Shared Valued’ and Social Capital Link to Pave the Path of next Generation of Innovation

Abstract. 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 paper focuses only first course of action as it paves the path of new wave of innovation. For this new wave of innovation, the role of social capital is explored to determine the extent this capital can derive 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 assumes that narrow conceptualization of social capital to network theory only and ignoring its origins and deep rooted relations with community will lead towards routine innovations that lacking potential benefits of shared value. If organizations emphasize more and invest in developing relationships restricted to network actors, then potential benefits might be unnoticed. Therefore, like 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 necessary to pave the path of new generation of innovation benefiting both business and society.Keywords. Creating shared value (CSV), Social capital, Innovation, Network relationship(s).JEL. O31, O35, Q55