Title: Status of Social Economy Development in Seoul 

Year: 2016

Publisher: GSEF

Author: Karl Polanyi Research Institute Asia (Yeon Ah Kim, Senior Researcher and Taein Jung, Head of Research Executives)

GSEF's first SSE research project on modelling social economy developments of cities - a case study of Seoul, published in collaboration with Karl Polanyi Research Institute Asia (author) is available in English, Spanish and French versions.

Summary 

The Korean social economy has grown at a remarkable pace over the last few years, attracting attention from around the world. The number of social economy enterprises, of which there were a mere 501 as of the end of 2010, has multiplied exponentially since the enactment of the Framework Act on Cooperatives (FAC) in 2012, reaching 11,421 (including 1,506 certified social enterprises, 8,551 cooperatives, and 1,364 community enterprises) as of the end of 2015. In other words, the social economy in Korea, measured in terms of the number of actors and enterprises involved, has multiplied by over 22 times in less than five years since the Korean government began to provide policy support. If we counted nonprofit corporations and organizations that strive to realize social values through economic activities, such as rehabilitation enterprises, rural community companies, and other enterprises catering to the employment of severely disabled persons, the scope of the social economy would grow even wider. Seoul alone is home to 23.2 percent of all Korean social economy enterprises (260 certified social enterprises, 2,267 cooperatives, and 119 community enterprises, total 2,646 enterprises), leading the development and progress of the social economy nationwide.

There may still be those who question the sustainability of this rapidly growing economy. Nevertheless, the Korean social economy, particularly in Seoul, is attracting increasing attention from the international community. This is because the explosive growth of the Seoul social economy is one of the rare examples in which a long tradition of civil solidarity has combined successfully with governmental policy support in a productive synergy. The social economy of Seoul provides an exemplary case of the multi-sectoral partnership, with the municipal government and local civil society working closely together throughout the entire process of social economy policy-making and implementation from policy review to budget preparations. Since the early days of adopting its social economy policy, the Seoul Metropolitan Government (SMG) has emphasized the need to establish and consolidate a truly inclusive governance structure in which all types of social economy actors could participate. This focus has resulted in the formation of a thriving and expanding social economy ecosystem and infrastructure consisting of multiple public-private and private networks.

However, the long-term success and stability of these public and private efforts remain to be seen. Although it has grown outwardly at an astonishing pace since the announcement of the Comprehensive Social Economy Support Plan of the SMG in 2012, the Seoul social economy still faces multiple and mounting challenges that continue to arouse controversy. Will this new Seoul experiment ultimately be sustainable? What issues has the process of compressed and rapid growth of the social economy caused us to neglect? How should we make use of our experiences over the past four years to design the future of the local social economy five or 10 years down the road? These are the questions that keep Seoul’s policymakers awake at night. This report summarizes and explains the findings of the Study on the Social Economy Policies of the 25 Self-Governing Boroughs of Seoul, which the Karl Polanyi Institute Asia (KPIA) implemented in the first half of 2016 upon request from the Global Social Economy Forum (GSEF). The purpose of the study was to ascertain the current status of social economy policy practices of the SMG and the 25 self-governing boroughs making up the city, and to assess the environment and issues surrounding the social economy in each borough. The goal was to research and analyze how the social economy model conceived by the SMG has been implemented in each borough and to what extent the social economy of Seoul has progressed.

This report also summarizes some of the major social economy policy initiatives in Seoul as well as a section of the results of an opinion poll. It would be a daunting task to provide a comprehensive and detailed evaluation and analysis of the entire social economy of Seoul. This study nonetheless provides a helpful overview of the main concerns and issues characterizing the Seoul social economy and related policy measures. Before we proceed to a detailed analysis, we need first to understand the basic structure and system of the social economy policy in Korea.