The Four Forms of Capital

October 1, 2023


ECO’s founder, Ed Whitelaw, knew a resilient economy rested on four forms of capital: human, social, natural, and physical. The export firms that run on that capital are important, but for long-run success, he kept his eyes—and his research—focused on the foundational capital that enables those firms to thrive.

Human capital is the collective talent of a region’s people, and social capital is the glue that binds them together. Natural capital is the stock of environmental resources—land, forests, waterways—that can be appreciated, protected, used, and renewed. And physical capital encompasses tangible assets—roads, buildings, technology, and machinery—that people and businesses use to produce goods and services. To Whitelaw’s four, economists often add financial capital, which provides resources to invest, grow, and fuel economic activity.

Ask us to assess a regional economy, and we’ll start with the condition of its foundational capital. If that foundation is strong, the region will survive the comings and goings of individual firms—even big ones. We have built our firm on this foundational thinking.

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