Analyzing the Success Factors of Best Practices in the Korean Social Economy

Abstract - EN

This report describes the results of a systematic analysis of the factors that led to such achievements with the lens of Sustainable Development Goals by selecting 10 excellent examples of social economy enterprises that have recently grown in Korea. Interest and practice in the social economy sector have been spreading greatly in Korea recently, with 19 years since the 2000 Act of Assistance of Non-Profit Civil Organizations was enforced, 12 years after the 2007 Social Enterprise Promotion Act was enforced, and seven years after the 2011 Framework Act of Cooperatives was enforced. This research report was published for the purpose of systematically investigating and analyzing excellent cases to provide strategic and policy implications. A total of three researchers, four research assistants, and seven manuscript reviewers participated in the preparation of the case report.

Of the ten successful social economy enterprises selected by this study, four of them, iCoop Consumer Cooperative, Ansung Health Welfare Social Cooperative, Social Cooperative Dounuri, and Happy Bridge Workers’ Cooperative, take cooperative legal entities while three of them, ACompany, Tree Planet and Test Works, are of corporation entities. Dasomi Foundation and Beautiful Store take non-profit foundation entities while Jump is of non-profit incorporated association entity.

Based on mutuality, iCoop(SDGs 2,4,8,10,12) and Happy Bridge(SDGs 4,5,8,10) have a mission to promote economic exchange of consideration for humans, environment and community, and to create and maintain quality jobs, while Ansung(SDGs 3,4), Donuri(SDGs 3,4,5,8), Dasomi(SDGs 8), and Jump(SDGs 4) have a mission to pursue the happiness of both beneficiaries and providers of social services as a social enterprise. Beautiful Store(SDGs 10,12), Tree Planet(SDGs 13) and ACompany(SDGs 8) are operated to realize civil participation-type public interests in the environment, culture and arts sectors where their value is excluded or there are not many opportunities in the capitalist market, and Test Works(SDGs 8) is a work integration social enterprise that seeks to create jobs that can turn the weakness of the disabled into advantages.

Among the ten social economy enterprises, the Ansung Health Welfare Social Co-operative is the oldest at 26 years since its establishment, the iCoop was established in 1997, and Happy Bridge in 1998. The ages of Beautiful Store, Dasomi Foundation and Dounuri are 10 to 20 years while other four companies are under 10 years old.

The research specifically examined the performance of these ten social economy enterprises and analyzed key factors which have influenced the outcomes and the relationship to the SDGs. It detailed them on a case-by-case basis. These ten examples summarize the following four strategic and policy implications.

First, it was confirmed that a business model that reflects the needs of its members and the characteristics of the cooperative ownership are essential for a cooperative to succeed while a social business model that is balanced in terms of social and economic value is necessary for a social enterprise of non-co-operative type to generate social impact. iCoop and Ansung, which have found innovative institutions and culture that enhance the advantages of ownership of cooperatives and supplement its weaknesses, and Dounuri and Happy Bridge, which have designed a set of institutions and culture to help enhance the advantages of worker-owned enterprise, show successful examples of a cooperative-type business model. Test Works that generated social and financial value through customized job training and development that took into account the competitive advantages of the socially vulnerable, and the Dasomi that succeeded in simultaneously generating social and financial value through innovation in the delivery of care services are typical social business models.

Second, it was also confirmed that in order for social economy enterprises to strengthen and maintain their social impact, it would be better to establish a cooperation among enterprises, such as business federations, networks and social franchises, rather than self-expansion of enterprises. iCoop has been building a business federation and a network while Beautiful Store is one of the most successful social franchise cases in Korea. Happy Bridge is aiming for an inter-company network and Dounuri is considering a social franchise as an expansion strategy.

Third, another strategy to strengthen social impact is public-social-private partnerships. Examples of Dounuri, Jump, Tree Planet, Beautiful Store, and Dasomi show this strategy.

Fourth, the fact that establishment of infra structure capable of systematic external resource linkage in the early stages of social economy enterprise growth plays a very big role in success shall be highlighted, as a suggestion to the support system on the creation and growth of social economy enterprises. It is confirmed that many social economy enterprises in this study, such as the Dasomi, Beautiful Store, Dounuri, Tree Planet and Jump, were able to secure the necessary resources in the early stages of growth, such as patient capital, management techniques and links with professional companies at their value chain.