Reasons for Proposal
After the period of industrialization and democratization, Korea achieved socioeconomic development relatively smoothly to join the ranks of other advanced countries. However, after pursuing economic growth based on large companies and exports, there is low growth without jobs and deepening economic polarization, while various social problems that undermine social integration, are worsening as the country faces changes in the internal and external environment such as globalization and financial crises.
In particular, the excessive pursuit of private gains by large capital and weakening of the state's regulatory functions have resulted in the collapse of the triangular balance between the state, the market and civil society, and the retreat of economic democratization, which is a significant obstacle to the realization of a fair market economy and sustainable social development.
As of 2017, Korea ranks seventh in income inequality among the 35 member states of the Organisation for Economic Co‑operation and Development (OECD), second in social conflict, and among the lowest in social capital. Evaluations and signs emerge here and there, suggesting that Korea’s social polarization and integration are getting further away, while it is becoming difficult to achieve balanced economic development and sustainable social development.
The self-reliant growth and development of the social economy, which are emerging in the face of such challenges, are noted as a very effective alternative that can provide a breakthrough to solve social problems in Korea.
As with experience and cases in other advanced countries like those in Europe and North America, the social economy development model has delivered noteworthy outcomes in creating jobs and expanding social services over the past two decades, while it is gaining attention as a solution for social problems that cannot be resolved the by state and market.
The employment rate in the social economy sector is 4% on average compared to the total employment rate of OECD member states, and is 7% on average in 27 EU countries, and10% in some major countries such as France, the Netherlands, Sweden, and Italy. It is a trend in today’s world that the social economy is being developed as an important driver for social innovation and community development.
In Korea, different types of cooperatives such as credit unions and consumer cooperatives have evolved, and the country has recently been paying attention to the international trend of developing the social economy and has produced tangible results in creating jobs for vulnerable groups, providing social services, developing local communities, and expanding cooperative models as social economy organizations, which seek social value, work along with the government’s employment policy. As a result, the government is seeking to create 480,000 jobs (2% of 2.38 million jobs) in the social economy sector by 2017 as its national agenda.
Fortunately, it is a desirable phenomenon that movements to include social value as the key principle of socioeconomic development are spreading in Korea, such as the growth of new social enterprises, social responsibility by private enterprises and public institutions, and innovation and expansion in various cooperative movements for sustainable socioeconomic development.
In line with this trend, the central government and local governments have come up with various policies and established ordinances to promote the social economy and regenerate local communities, and civil society and local communities in the third sector are actively participating in these efforts and in social economy activities, which drive sustainable social development.
To ensure that social economy organizations grow and develop sustainably in the above situation, it is necessary to promote the principles and values of a social solidarity economy whose operating principles are different from those of the public economy and market economy, establish a comprehensive ecosystem to enhance the development capabilities of local communities by promoting collaboration and solidarity among social economy organizations and developing public-private partnerships, and improve related systems to efficiently support the social economy such as rebuilding a policy implementation system.
If the social economy sector is activated, it will not only resolve the challenges in Korean society today such as polarization, creating quality jobs and providing social services, revitalizing local communities and promoting local recycling economies, improving the quality of life of the people, and social integration, but will also contribute greatly to the balanced development of the national economy and national community development .
For this purpose, the Social Economy Basic Act has been established to prepare a common legal basis that covers various social economy organizations such as social enterprises, cooperatives, village enterprises, self-support enterprises, rural community companies, financial cooperatives, nonprofit organizations, social financial institutions, and intermediary support organizations, define matters regarding policy establishment, supervision, and adjustment required for the development of the social economy to efficiently support it at the national level, and establish a policy implementation system based on public–private partnership with central and local governments to create a collaborative ecosystem that improves the sustainability of the social economy.
Details
A. Recognize the contribution of the social economy to the balanced development of the national economy and national community development, prepare a common legal basis based on the basic principles of the social economy to promote collaboration and solidarity between social economy organizations, and establish an effective policy implementation system based on public–private partnership with central and local governments to create an ecosystem that improves the sustainability of the social economy
