Does State-Driven Social Economy Work? The Case of Community Business in South Korea

Abstract

(1) What is the role of the government in enhancing social economy? South Korea has implemented projects and programs to enhance social economy. This paper discusses the positive role of government intervention by looking at the case of community business in South Korea. In addition, some limitations are discussed. (2) Qualitative data based on in-depth interviews with diverse stakeholders and participants were included. In addition, a comprehensive analysis of government documents and literature was conducted. (3) In spite of some bureaucratic and institutional limitations, the village company program of Korea has played an important role in enhancing the social economy for ten years. In particular, the early stages of government intervention in Korea have been successful. (4) However, when the government intends to get involved in enhancing the social economy, it is necessary to carefully prepare formal and informal institutions.

A Model for Improving Business Performance – The evidence from Women Entrepreneurs in West Java, Indonesia

“…Microscale businesses that dominate MSE entrepreneurs in West Java require special policies. According to (Choi et al, 2021), it is essential for the government to be prepared to build formal and informal institutions to improve social welfare. Therefore, strict procedures are required to ensure production quality and certificate/recognition of production efficiency.…”

“…Government intervention is generally considered to have an influence on strengthening the MSEs business performance. The existence of programs other than the financial aspect is also needed by entrepreneurs (Nohong et al, 2018); Choi et al, 2021). Based on this association, Hypothesis 3 was formulated as follows:…”

A Comparative Analysis of Social Enterprise in South Korea and Indonesia

“…(SEPA) in 2006, which functions to integrate people's lives and improve the quality of life through the expansion of social services and job creation (Jeong, 2015) which was then revised and implemented in 2012 namely the policy regarding social enterprise certification so that the social enterprise receives financial and operational support from the state (Jeong, 2015). The Social Entrepreneurship Ecosystem in South Korea is different from that in other countries such as Europe because the government creates the ecosystem, and support is provided from the central government to regional governments (Choi et al 2021). Other supports, namely social insurance, and administrative and financial support, also encourage the formation of a social service market by establishing a South Korean social enterprise promotion agency (KoSEA) (Bidet and Kim, 2015;Jang, 2017).…”

“…Several things were carried out, including (1) having a legal form such as the Enterprise Social Enterprise Promotion Act of South Korea, (2) having special supporting institutions such as KoseA, and (3) other policy tools that maintain the social enterprise ecosystem, such as fiscal incentives, grants, various funds. and bonds, awareness campaigns and promotions, incubation, and social and economic value creation, including market competition played by firms (Choi et al 2021).…”

“…Since the economic crisis in 1997, which caused South Korea's unemployment rate to be very high after the 1997 crisis from 2.6% to 7% (Defourny and Kim, 2011), the government began to focus on making social enterprise one of the solutions overcome these problems (Jeong and Kim, 2019). A large part of the rapid growth of social enterprises in South Korea is the influence of the government (Lee, 2015;Jang, 2017;Defourny and Kim, 2011;Jeong and Kim, 2019;Choi et al 2021). The government provides support through legal entity regulations and institutions that make South Korea the only country in East Asia that legally defines social enterprise.…”