Keystone sector methodology:network analysis comparative study

Keystone sector methodology applied to Portugal

holes in addition to face more rewarded opportunities, are more likely to control
benefits, giving certain players an advantage in negotiating their relationships.

Knowing the social structure of small towns (through different measures
forward presented) will enable us to predict its cultural pattern and the value of its
social capital. Furthermore it will tell us how likely each social network is able to
internalize the benefits of structural funds invested in the locality and surrounding
region.

In the next section we explain the specific methodology and discuss the results.

3. Methodological considerations

As a consequence of human system complexity - where everything is connected
with everything else - and the improvement in new informational technologies - where
“tempo of spread” crashes with human ability to deal with everything at the same time,
the problem of innovation diffusion process in an active social environment⁴ is more
important than technology invention.

Several attempts to define the fuzzy boundaries among disciplines and to use
methodological instruments depend on adequate measurement and accurate data
gathering. Heterogeneity and dependence in space is not linear due to social interaction.
Integration of social influences in player behaviors⁵, social dynamics across time/space
in innovation diffusion⁶, demand and supply analysis or market equilibrium⁷, is a
challenging process in economic modeling.

In this paper we focus on social interaction among entities located in small
towns, identifying its social structure and the prominence and hierarchy of the main
institutions. With the obtained picture we understand how players located in this town
can benefit (or not) from the existent social capital, which can be used as a guideline
for investment decisions.

3.1. The keystone sector methodology

⁴ Discussion on this issue is presented in Sonis, M. (2000).

⁵ For a more complete survey see Becker and Murphy (2000).

⁶ Sonis (2000).

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Several examples can be found in education, labor, housing, agriculture, public, regional and local
economics and in crime, health, innovation, business, marketing issues. To more complete survey see
Anselin (1999).

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