Labor Market & Employment Policies

※ Hye-Won Kim, Research Fellow, Korea Labor Institute (email: hwkim@kli.re.kr).


Abstract

The problems of poverty and unemployment initiated the growth in social enterprises in Korea. However, a governmental support system for social enterprise began to be formed with the increase in welfare expenditures and social services, which needed credible and efficient service providers, a role social enterprises are expected to play. The driving force behind the growth of social enterprises in Korea is not the supply factor but the demand factor, the most important of which comes from the government rather than households or firms. The Korean government has extended direct wage subsidies for social enterprises in fixed terms, and it has helped many social enterprises, especially in their embryonic stage. But the government’s role should change from that of a direct supporter to that of an indirect one, and the future of social enterprises will have to depend on supply factors such as social entrepreneurs, strategic donors, and volunteers.

Key words: social enterprise, social service, Social Enterprise Promotion Act, social work program, demand-supply framework