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Social capital in the development of consultation strategies

Principal of C2C, Emay Cowx, recently spoke about how consideration of social capital can help develop better strategies for engagement and consultation in support of future infrastructure developments.  These comments were delivered to a national audience of public utility regulators (CAMPUT) as a panelist discussing “Consultation & Engagement: A Potential Game-Changer?” at their annual conference in Halifax, Nova Scotia.

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We have to build a lot of stuff.  I recently read that the level of required investment in global infrastructure between now and 2030 is estimated at US$57 trillion.  In Canada our shortfall is something like $20-30 billion per year, over and above current spending, with the gap expected to only widen over time. 

So this is the challenge we’re facing. I doubt that the cost of social friction*, which is the tension catalyzed through infrastructure project developments, is factored into these estimates.  Costs of project delays, costs of drawn out regulatory proceedings, tears in the broader social fabric to support achieving public policy objectives for green energy and the like.

Now about a year ago I wrote an article suggesting that builders and developers of electricity infrastructure, who are experts at applying financial and technical engineering rigour to their projects, should also look to applying tools and methods from the social sciences to alleviate social friction through better understanding of communities that may be impacted by their projects.  This “other” science discipline offers learnings which are currently underutilized and should be integrated into project planning and management to minimize social friction.

I’m going to talk briefly about two concepts.  First a finding by Nobel Laureate in economics (2002) Daniel Kahneman around perceptions of gain/loss.  And second, the concept of social capital.

Quite simply, Dr. Kahneman’s ground-breaking research spawned the disciplines of cognitive psychology and behavioural economics.  One of the findings for which he earned the shared Nobel, was the human bias for loss aversion, which means that we feel the pain of a loss more than we feel the pleasure of a gain. 

Thinking of our infrastructure scenario where policy makers plan stuff and developers want to build stuff, and on the other we have people and communities who perceive change as a loss of the status quo.  It will take a lot more early effort to overcome the negative reactions, particularly if there is no basis for trust.

So I want to now introduce the concept of social capital.  This is a concept that has been around for quite a long time, but did not really gain popularity until the early 2000s to describe how the traditional sense of community has been weakening. There is no one single definition of social capital, but I’m going to give you the Readers Digest version of what the concept means and how it should be considered in efforts to engage and consult on building of new infrastructure so as to minimize the sense of loss that is difficult to overcome once experienced.

The OECD (Organization for Economic Cooperation and Development) describes it as the “social networks combined with shared norms, understanding and values that enable cooperation within or among groups”; or more simply the glue that binds relationships of people together and that build trust.  Networks are easy to understand: these are family, friends, coworkers, church groups, etc. and are pretty concrete.  Norms are the unspoken and generally accepted societal rules.  For example in Canada we are a nation of polite “queue-ers” and if looks were daggers should someone try to jump to the head of the line!  Together with our networks, trust is enabled and reinforced.

Now there are 3 types of social capital:

  • Bonds – links to people through a common sense of identity (“people like us”) family, friends, ethnic groups;
  • Bridges– links that extend further with some commonality, such as work colleagues, acquaintances, business associates;
  • Linkages – links to people or groups along the social ladder.

So how do we bring this all together in developing better strategies for engagement and consultation around future infrastructure developments?

At the broad societal level, public policy makers must act by taking responsibility for establishing the context for projects by framing the public need and benefit.  Engagement, dialogue and consultations at this level will enhance energy literacy, help develop the public’s understanding of a sector that has provided a commodity reliably with little external input until recently and help develop shared understanding and norms, thus creating the first level of social bonding capital.  I want to caution that I’m not referring to passive strategies and the typical lament “if we educate people about this they’ll understand”, but an ongoing dynamic interaction between government and the public leading to discourse and understanding to maintain trust.

Regulators also have a role in augmenting and supporting the social capital resource pool through their inherently trust-based position in the supply chain.  Regulators have typically focused on the bonds with those they regulate and stakeholders within that immediate circle (known as intervenors).  I would suggest that consideration of broader strategies which build bridging and linking capital to customers and others beyond the common group, will help sustain the trust that currently is placed with regulators as part of their role in guarding the public interest.  Robust communication and engagement efforts that reinforce the planning contexts and highlight where, when and how the regulator will be involved in projects will help manage public expectations. Regulators should also develop their own understanding of who should be included in affected stakeholder groups to ensure that those directly impacted are involved throughout the developmental and regulatory processes.    

Finally, development companies (be they utilities or private sector firms) should look at how a social capital perspective can help encourage a different way of doing things.  Consider the possibility of a corporate “blind spot”, which is the result of very strong internal bonds with other like-minded colleagues and acquaintances.  Challenge the corporation’s view of the world by engaging the safe internal micro-community to help inform development of external strategies. 

Companies that have high corporate capital understand what it takes to be a “good neighbour” – which is what a project becomes in any community.  This capital is constantly being replenished through community contributions and may develop into a resource that can be drawn on for other initiatives.

Let me just leave you with the notion that investing in early and ongoing communications and outreach to actively build social capital can establish trust and increase project social acceptance.  In the retail world, corporations who understand social capital utilize this in the marketing of their products and no longer call people who purchase their products as “customers”, but see them as “fans”.  There is an active, relationship-seeking, experiential aspect, which essentially resides on a platform of trust.

The point here is to demonstrate the concept of social capital as a means to understanding and directing the explicit effort required to develop collaborative relationships at different levels with the objective of enabling positive acceptance of infrastructure projects and minimizing transaction costs along the way.

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[*This friction arises as a result of differences in perceptions, lack of mutual understanding of values and unequal capacities (time, money, knowledge) among interdependent stakeholders.  Social friction is a neutral term applicable to public planning processes suggested by Decision Partners, a global expert centre for applied research in judgment, decision-making and behaviour.]