The role of microenterprise development in stimulating social capital and rebuilding inner city economies: A practitioner perspective.

1. Introduction

Across the country, we are witnessing a renewed interest in addressing the problems and opportunities of impoverished inner-city neighborhoods. Recent years have evidenced a growing number of initiatives in which the residents of poor communities themselves have made significant strides toward transforming conditions in their own communities. Broadly referred to as "community-building," it consists of new methods for mobilizing neighborhood residents, working together on concrete tasks that take advantage of new self-awareness of their collective and individual assets, and in the process, create human, family and social capital that lay the foundation for a more promising future and reconnection to mainstream society.

Further, interest in community building to addressing the problems of the inner city is occurring at a time when a number of researchers have pointed to the importance of strengthening community in America. Robert Putnam notes that, "social scientists... have unearthed a wide range of empirical evidence that the quality of public life and the performance of social institutions are indeed powerfully influenced by norms and networks of civic engagement." As Putnam [1] and others have related, these networks of relationships -- both formal and informal--build the social capital that is the lifeblood of vibrant societies.

The increased awareness of the importance of community in conjunction with the spread of community-based initiatives has important implications for the field of community economic development. At a minimum, these currents are prompting the staffs and boards of organizations across the country to review their mission, the design of their programs and method of delivering services.

In fact, the findings of current research and the evidence of notable success stories may lead to wholesale systemic change within such institutions. The purpose of this paper is to illustrate how one non-profit economic development organization, the Institute for Social and Economic Development (ISED) in Iowa City, Iowa, is applying the theories of …