Korean social enterprises go global

By Jeong Tae Kim 13 March 2015

The South Korean flag. The country's social enterprise ecosystem has been rapidly growing in recent years. Photo by: Romain Bochet / CC BY-NC-SA

Social enterprises — businesses that prioritize human and environmental benefits equally to profits — are effective vehicles to achieve development goals as their market-based approaches bring sustainability and scalability that are essential to create long-term impact.

South Korea’s social enterprise ecosystem has grown rapidly in recent years. Following the country’s new Social Enterprise Promotion Act of 2007, we now see many Korean social ventures creating impact in various ways, with many aiming to achieve development goals while conducting business activities in developing countries.

Koreans’ interest in bottom-up approaches to development is closely linked to our country’s own unique development experience via the New Village Movement of the 1970s. This was a pan-national movement focused on rural development. The central government provided equal amounts of cement to each community, encouraging them to initiate development projects of their choice. Those that successfully accomplished projects through their own residents’ efforts and investment were rewarded with more resources for cooperative work.

The program is widely considered to have contributed to the development and modernization of Korean society as a whole. Many Koreans feel proud of the development they achieved in such a short timeframe and are willing to spread this spirit and experience to neighboring countries.

This bottom-up approach can tie in with the growing interest in social enterprises from both the public and private sectors. If both sectors want to engage with each other, can there be a mutually beneficial mechanism that reflects the nature of each sector? This is the beauty of social enterprises and social ventures, which act as vehicles for public-private partnerships. In this context, both Korea’s public and private sectors are increasingly seeking opportunities to support social enterprises to accomplish their respective goals.

Inclusive development partnerships are a core principle of the Global Partnership for Effective Development Cooperation launched at the 2011 High Level Forum on Aid Effectiveness in Busan, Korea. This way of cooperating poses interesting challenges to traditional development players such as governments and civil society organizations in cooperating with other development actors, including the private sector. How can the private sector be engaged in development activities? And how can the quality of public-private partnerships be measured?

From the private sector perspective, developing countries have increasingly been recognized as a new market. The 4 billion people living on less than $2 a day, those at the bottom of the pyramid, have been perceived as a market in which businesses can earn profits through innovations in technology, business models and managing procedures.

Along with this motivation, many Korean companies are also under strong pressure from their communities and society to support development impact, including by designing corporate social responsibility or creating shared value strategies. MYSC, Korea’s first social innovation-focused consulting firm, advises its private sector clients to invest in social enterprises as part of these strategies, and we look forward to seeing more trial cases in the near future. Among Korean conglomerates, Hyundai has active global Creating Shared Values programs; it established automobile technical high schools in Ghana, Indonesia and Cambodia in partnership with the Korea International Cooperation Agency to create stable jobs for local youth.

Last October, KOICA collaborated with the Korea Trade-Investment Promotion Agency to launch an incubator program for Korean social entrepreneurs. MYSC is now training six teams sent to Cambodia and Vietnam to develop their business models. This program is symbolic of KOICA’s use of official development assistance to leverage business activities contributing to development and is promoting social businesses such as a cooperative to produce construction materials from urban waste and a K-pop performance team composed of local unemployed youth.

Along with these businesses, social enterprises in Cambodia and Vietnam are supporting the countries’ development goals, such as increasing employment and protecting the environment while carrying out urban development.

The Korea Social Enterprise Promotion Agency has also added a global section to its annual social entrepreneurship incubator program to support entrepreneurs wishing to launch their social enterprises in developing countries.

Through the Korea Development Bank’s Pioneer Village “The Nanum” (Korean for “sharing”) program, MYSC trained ten teams of entrepreneurs to launch social businesses in Asian and African developing countries in 2013. Using MYSC’s design-thinking approach, the teams conducted in-depth field research in the respective countries to develop their businesses based on the actual needs of their target groups. Several of the teams are now running successful businesses, including Tella, which employs Ugandans to provide remote text-based English tutoring services to Korean customers. This fills a need in the Korean English education market while creating jobs that pay fair wages for well-educated jobless people in Uganda, which faces a high rate of unemployment for young adults.

Another project, Soul of Africa, aims to support Kenyan and Tanzanian artists by protecting their intellectual property rights and purchasing their artworks to be sold at SoA’s gallery in Seoul at fair prices.

By promoting the successes and lessons learned via multistakeholder partnerships on the ground, we hope that Korean social enterprises will help to inform how the private sector can play a key role in more effective development cooperation.

What’s your take on the role of Korea’s private sector in international development? Share your thoughts by leaving a comment below!

This article is shared in collaboration with the Global Partnership for Effective Development Co-operation. Read more expert comment at http://devcooperation.org

About the author

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Jeong Tae Kim

Jeong Tae Kim is the CEO and president of MYSC and executive director of Social Enterprise Network. He has worked as communications and outreach officer at the United Nations Project Office on Governance.

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