Place capital: The shared wealth that drives thriving communities

To create wealth and prosper, societies everywhere seek to establish capital, a factor of production that is not wanted for itself but for its ability to help in producing other goods. Today there are many kinds of capital, human capital, social capital, cultural capital, natural capital, infrastructural capital.

What is place capital?

But it may be that a key to producing lasting wealth, and a way to efficiently build and leverage these other kinds of capital, is through a focus on place. Place capital is therefore the shared wealth of the public realm (built and natural) – and it is increasingly becoming society’s most important means of generating sustainable growth, while at the same time creating the best setting for resilience and further innovation.

The public places we most value in our communities and around the world have this wealth and attract and enable its preservation and expansion. Place capital is strongest in places where people actually compete to contribute to this shared wealth. For instance, this is what makes successful public markets so rich with place capital: each vendor naturally wants to contribute to the broader experience, in doing so, enriches his neighbours and the value of the entire place.

Public markets, town commons, and communal wells are early examples of human’s ability to grow these kind of shared value generators in physical places. Today, this idea of place capital is receiving relatively little attention and investment. It’s rarely seen as anything more than the necessary infrastructure and facilities needed to support the traditional means of production and distribution.

Why we are failing to generate place capital

In contrast to the public market model of organising to support shared community goals and public space, retail environments and advertising endeavours are usually about sucking from the public realm. Even transportation investments largely ignore and usually degrade the public destinations they intersect, favouring the moving of capital through places.

The architecture of public buildings, educational institutions and open spaces often have narrow missions that stop short of considering the potential shared value they can add to the public realm. There is lots of attention for ‘good design’ to have a sustainable, or less bad, impact on the environment or community, but little is being done to leverage the great value, and further demand, that our built environment can induce.

With the increasing placeless nature of human, social, economic, infrastructure and cultural capital, it is how we channel these into the generation of ‘place capital’ that effectively determines a community’s success in attracting and spawning further wealth generators.

As information and resources become more and more available and the pace of change accelerates, it should be easier than ever to create places that we want to be in, that build place capital. The knowledge we need to build great places is more available than ever: we know what works. Unfortunately, despite this increasingly available information, our built environment is tending to look the same and is created with less participation and resources, and less creative processes.

The forms of capital have all been siloed in isolation to their relationship to place capital, along with the disciplines, institutions and government agencies charged with shaping this public realm. Consequently, the experiences of our public realm are not as rich or valuable as they could be and one-size-fits-all solutions are imposed on the people that they are meant to serve. Along with the homogenising forces of globalisation, we are left only to be passive consumers.

The increasing significance of place

The paradox is that despite of and in response to this increasingly placeless environment produced with limited creativity, our perception of places is increasingly determining where we choose to be at any one moment.  We are more discerningly and deliberately choosing to identify ourselves with places we feel express our identity, or to use places as a way to express our identity. Now, more than ever, we go were we like.

Further, places are becoming the repository of our greatest hopes and dreams for our personal and human legacies. Public places are where our most valued relationships are experienced and grown. Seeing ourselves as co-creators of these places, through our relationships as participants, or as placemakers, elevates our role in society to builders of civilization.

Placemaking as a means of place capital production

The efforts people undertake to improve places that matter to them – Placemaking – can further give rise to a rich experience of place for ourselves, and our communities.  Placemaking for these purposes can be defined as the empowerment and engagement of the individuals in a community to participate in, understand and contribute to the evolution of the spaces that define that community. Placemaking however, is not a new profession, discipline or field of study, but a growing movement that is bringing out the best of professional knowledge and skills while supporting the communities in connecting to places and taking ownership over the planning process and the emerging results.

With the increasing importance of place comes the prioritisation of happiness as a desired outcome and goal of human settlements. Experiencing a comfortable, engaging, sociable place is offering a compelling opportunity for happiness.  Whether it is the feeling we get when we are in our neighbourhood, at a corner store, on a shopping street or exploring a far-off destination, many are seeing a sense of place as an increasingly important -even vital- part of our lives.  This experience of place not only includes the experience of actively participating in the creation of meaningful spaces but, perhaps more powerfully, participating in, understanding and contributing to the richness of these small worlds, infinitely larger than ourselves.

But places are not just defining our communities; they are emerging as the leading factor in defining the global economy and human progress.  People, information and capital are all increasingly more mobile, but ultimately, places which are inherently immobile, are the destinations for this creative potential.

As places strategically define themselves as the beacon of this creativity, they in turn, become its source.  Therefore, places are emerging as the chief source of competition and creativity in global and local markets and will increasingly be the driving force behind markets and business models.  In light of this inevitable trend, communities need to define themselves as places to attract place building business and business models need be directly responsive to the places and communities they are meant to serve.