Korea to promote social economy as new economic engine

The South Korean government said Wednesday that it will promote the "social economy" sector in a bid to expand its contribution to employment and build up a social safety net.

The Presidential Committee on Job Creation held a meeting chaired by President Moon Jae-in and announced a plan to boost the country's social economy.

The social economy is a third sector that creates social value through economic activities based on communities and voluntary institutions. They are mostly made up of cooperatives, mutual societies, non-profit associations and foundations, which provide a wide range of goods and services.

Their business activities range from bakeries, coffee shops and movie theaters to guest houses, babysitting and business consulting services.

The concept of the social economy has been emerging in recent years throughout the world as a solution to unemployment. In the European Union, more than 11 million people, or 6 percent of the region's total employees, work for social economy enterprises.

The South Korean government said it will first ease regulations and difficulties in the area of state aid or public procurement to promote the appropriate policies for the social economy field.

It will create a fund worth 500 billion won ($442 million) to give financial guarantees to social economy startups and expand other corporate funds run by policy lenders in a way that helps them get easier access to finance.

It will also recommend provincial governments give priority to the activities of social enterprises in their operational purchase programs.

Also, state-run companies and institutions will receive higher points in their annual management assessment when they buy products and services from social economy companies.

Public buildings and spaces will be offered at a lower price for young social entrepreneurs so they can engage in creative business activity.

"Only 1.4 percent of employment is currently in the social economy in South Korea, meaning that the social economy is at a fledgling stage," said Woo Beom-ki from the Ministry of Strategy and Finance. "The plan is aimed at building infrastructure for the social economy and expanding its business portfolio in a way that improves its employment capacity." (Yonhap)