Sustainability is not just green

Sustainable development encompasses the conservation and development of different types of capital, including productive capital, natural capital and social capital.

Weak social capital hampers sustainable development

Without social cohesion, it would be difficult to achieve the Sustainable Development Goals (SDGs). The philosophy of sustainable development is based on certain basic concepts such as resource mobilization, decentralization, delegation of power and maximum community participation.

When started in an environment with strong social cohesion, community improvement initiatives will yield good results. Likewise, when people manage to organize themselves into committees, associations or communities with a high level of trust and strong ties, these activities will result in the development of social solutions that will help improve the quality of life in the community. On the other hand, the quality of life will be negatively affected when the quality of social capital decreases.

In addition, low social capital will increase the financial cost, which is also one of the factors that affect the quality of life. In economics, the interest rate reflects the cost of capital. And, the constituents of interest rate include profit margin, inflation, and risk.

Low social capital leads to mistrust of others, or in other words, lack of trust in society drives up the cost of risk coverage, which is factored into the interest rate (and therefore the cost of capital). Conversely, transaction costs will be lower when trust remains high and the culture of cooperation develops.

Low social capital hampers human capital

According to Fukuyama (1995), it is vital to develop social capital in order to have competitive capital because connections across borders and platforms will be made possible through a wider radius of trust. Academically, there remains disagreement on the definition of social capital, but all scholars share the view that trust is the important pillar of social capital formation.

Therefore, in an environment with low social capital, i.e. low trust in humans, talented people tend to stray away from unhealthy social networks, and as such, it is impossible to exploit their human capital (skills and knowledge) for the common development objective. When human capital is underutilized, it will be a big waste for society.

Besides human capital, the institutional regime and social resources are also very important for economic growth and sustainability of development. Social capital does not derive from personal goodwill, but from social norms. A weak and inequitable legal system will reduce social capital and increase suspicion among citizens, and between citizens and the state.

Diversity, inclusion and equity improve the social capital of companies

In today’s digital, knowledge-based economy, the remarkable difference comes from an environment that nurtures autonomy, encourages diversity and champions creativity. This contrasts sharply with the mentality of the industrial age whose development was based on resources, processes and leaders focusing on employment standards.

The knowledge economy does not mean recruiting and paying high salaries to people with good knowledge, but it means creating the conditions for knowledge to be shared and multiplied from within. Talented people, regardless of age or gender, are identified, nurtured and developed within an organization. Knowledge is the constant crystallization and sublimation in an environment that encourages the synergy of diversity, autonomy, healthy creativity and delegation of power. Investing in people and growing the organization is an integral part of doing business today.

The term “corporate social responsibility” (CSR) refers to different activities related to the creation and use of social capital in a company. For example, the development of the recruiter’s brand and its constituents are all related to social capital and leadership capital that is created by members’ trust in a company’s value system and vision.

Policies that support employees’ learning and career development initiatives, facilitate their work and working relationships, and promote work-life interaction can make the difference in terms of competitive advantage and reduction of wastage resulting from labor changes.

Those companies with high social and leadership capital can build cohesiveness in actions through common understanding, which improves organization stability and long-term business efficiency.

Social capital for a city of sharing

Cities face sustainability concerns due to increasing urbanization and deteriorating quality of life. According to the SDGs approved by the international community in 2015 (Paris Agreement), urban sustainability requires the achievement of other important goals, including the protection of biodiversity, the reduction of environmental pollution and the promotion of social equity. These issues can be mitigated when the sharing economy is prioritized for development, leading to the creation of the sharing city.

A sharing economy provides creative solutions for sharing, renting and replacing less used assets, frequently using digital platforms to provide information on demand and supply.

Major sharing platforms like Airbnb, Uber, and TaskRabbit were born in the San Francisco Bay Area, considered the birthplace of the sharing economy and cooperative consumption. Local residents and visitors to San Francisco often use sharing platforms like Airbnb and VRBO as well as transit network companies like Lyft and Uber. Likewise, the co-working space has also become popular.

Another example is Sweden’s first toy library named Leksaksbiblioteket, which was launched in Gothenburg in 2018, where members can borrow toys for their children and newborns.

Or a digital platform and database for the regional sharing economy in Gothenburg named Smarta Kartan (smart card) introduced in 2016 was a cooperation between the city of Gothenburg and the company organization Civil Kollaborativ Ekonomi Gothenburg. Other cities wishing to create smart map versions of their own fit are welcome to use the open source code for free.

Stockholm and Gothenburg, which are Sweden’s sharing cities, are trialling the world’s best releases for sharing services and digital solutions. Sharing services in experimentation now include: 1/ the use of space (buildings, houses, green infrastructures, co-use of public spaces, etc.) and 2/ the use of products and services (tools, clothing , toys, handicrafts, etc. ) Public transport and bike sharing are encouraged.

Sharing services helps reduce energy consumption, protect the environment and promote sustainable growth, and sharing creative services will help develop other services in the economy.

To build a city of sharing – one of the vital factors in the formation of the sustainable city, one needs strong social capital. This is because if social trust is low, people will not share with each other for the common good.

Sharing with other people those things that we don’t use frequently will be helpful in reducing waste and reducing the exploitation of natural resources. Sharing economy, peer-to-peer economy or cooperative consumption can be effectively applied to public-private partnership, business alliance and other local government programs.

During difficult times like during the pandemic, people in Vietnam in general and HCMC in particular have shown their spirit of sharing, which should be promoted in a professionally organized style rather than spontaneity.

The state and city government can exert strong impacts on the sharing economy, the sharing city and the sharing community by pursuing people-friendly policies or partnering with people.

In addition, the sharing city model will develop rapidly and flourish strongly when social trust is consolidated, the quality of human relations is nurtured and maintained, and business networks strengthen increasingly effective cooperation for the good. -being common and the benefits of community.

Source: SGT

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