Networks are the way in which knowledge and know-how flow through the system.  A city’s innovation capacity is dependent on the ability of its network to reduce the tie formation cost and speed of knowledge diffusion.  The less time and cost to develop and maintain network ties the more complex tasks and the diverse mix of industries it can sustain. The large portion of capital within an economy is embedded in individuals as “human capital.” The value of the ability for people to cooperate is known as “social capital.”

Trust is the foundation of "social capital". It reduces the risk of working with others and increases the ability for people to connect to the network.  This reduced risk directly affects the cost of doing business within an ecosystem. It not only affects the economic output of the city but also a company’s bottom line.  When trust is low, there is a greater need for overly complicated and onerous legal mechanisms to ensure each parties protection. This friction inherently slows transactions and business development. A higher level of trust enables cooperation and tie formation. Research has shown that societies with lower levels of trust tend to have economies that are built on family ties rather than diverse networks of people. 

While the level of trust between citizens is often ingrained within the city’s culture, other factors contribute to trust between individuals and the likelihood they will form social bonds. They include shared social focus, common friends, and mutual interests. A social focus could be a faith community, workplace, or child’s school.  Share friends transfer an implicit trust.  Mutual interest or characteristics are summed up by the familiar adage “Birds of a feather flock together.” Similar experiences, backgrounds, and interest are touchstones that can elicit interaction resulting in long-term relationships. These characteristics of tie formation increase the probability we will trust them.