To grasp the critical role of socio-cultural factors for regional economic development, several concepts have been developed, including that of ‘social capital’. This notion usually refers to norms, values, networks, reciprocity or trust which are held in a community and can lead to positive social and economic outcomes. Despite its popularity as a fashionable concept in the literature, the exact meaning of social capital is far from clear. This paper criticises the dominant conceptions of social capital in economic geography and regional studies and aims to place the debate in a different perspective. It argues for an alternative understanding of social capital defined as resources embedded in social networks which can be accessed or are used for actions. The potential to overcome the current weaknesses in the literature is illustrated through discussing social capital of economic clusters.