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How Does Social Economy Work and Contribute to Seoul's Economy?
"In the process of overcoming the COVID-19, I hope the social economy entrepreneurs to be the main players in creating an inclusive nation that makes everyone prosperous." President Moon Jae-in said in the congratulation letter of the 2020 Special Exhibition on Social Economy.
Jianna Seo provides a special article to SNN on S. Korea's driving force for inclusive growth: social economy
By Jianna Seo
Promoting the social economy as a driving force for inclusive growth
In order to achieve many of policy goals in realizing inclusive growth where the benefits from growth are evenly distributed to the people, Moon’s government regards people-centered economy as a key part. And the social economy has been shown to promote inclusive growth by creating jobs, strengthening skills and employability; building diversified local economies; and contributing to wider economic and institutional transformation.
Social Economy: Definition and Scope
Although there is no globally agreed definition on the social economy, it's recognized to encompass all economic activities of nongovernmental actors that strive to generate social value through the production and distribution of goods and services on the basis of cooperation and self-help among those actors (“members”).
A social economy enterprise (SEE) decides its activities according to a set of related principles, including autonomy, democracy, solidarity, and cooperation. It maintains autonomous and democratic governance through voluntary participation and equal voting rights of members. It prioritizes the sharing of profits among members, creating jobs for the disadvantaged, strengthening local communities, and other such social objectives.
The social economy provides models of mutual cooperation among people alienated from both state and market and who form their own communities to achieve their shared social visions. The social economy therefore both competes with market organizations and serves as a bridge between the state and the market.
S.Korea’s policy strategy to energize the social economy
The South Korean government has adopted a two-track strategy for developing the social economy into an impetus for inclusive growth in the nation. The two main pillars of the strategy are (1) developing infrastructure for growth of the social economy, and (2) diversifying fields of the social economy, particularly into areas with significant impact on Korean society. The government has supported this strategy by announcing and implementing a series of follow-up measures, including the interdepartmental Social Economy Promotion Plan (2017), Social Finance Promotion Plan (2018), Master Plan for Human Resource Development (2018), Self-Sufficiency Enterprise Promotion Plan (2018), Measures to Enhance Local Community Capabilities (2019), etc.
Social Economy in Korea Today
Active policy efforts by the state played a decisive role in emergence and growth of the social economy in Korea. The number of Korean SEEs has multiplied greatly over the years. The four main types (social enterprise, cooperative, village company, self-sufficiency enterprise) of SEEs that the Korean government and its agencies have been fostering passed 20,000 in number and cumulatively employed more than 110,000 workers in 2018. The policy finance supporting them totaled KRW 200 billion. While there is no official data on the overall performance of SEEs on the public procurement market, the Korean government has procured well over KRW 1.1 trillion worth of goods and services from social enterprises and social cooperatives, or 2.5 percent of its total public procurement.
Photo Credit: Korea Social Enterprise Promotion Agency
Jianna Seo
Jianna Seo is the Manager of KoSEA (Korea Social Enterprise Promotion Agency), which was established under Article 20 of the Social Enterprise Promotion Act and performs duties of fosterage and promotion of social enterprises in Korea. She has 5 more years of extensive experience in the Korean social economy sector. Currently, as a project manager of ‘Strengthening Social and Solidarity Economy (SSE) Policy in Asia[1]’ of International Labour Organization, she’s responsible for managing a comprehensive research on the status of Social and Solidarity Economy (SSE) in 6 Asian countries (South Korea, China, Japan, the Philippines, Indonesia and Malaysia), and policy capacity building workshop for the policy makers, experts, practitioners in the six countries. She’s serving as an advisor to the Industry Advisory Board of Hanyang University. She received a Bachelor degree in Chinese Language and English Translation from Hankuk University of foreign studies and Master’s degree in Global Social Economy at the Graduate School of International Studies of Hanyang University (Ashoka University), Seoul.
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