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Posted by on May 12, 2014 in Community, SE Column | 0 comments

Civil society should expand social enterprises

Civil society should expand social enterprises

Social enterprises are on the rise and increasing in number. After the Social Enterprise Promotion Act was implemented in 2007, more than 1,000 social enterprises were certified and the number of initiatives aimed at becoming pre-social enterprises or village enterprise cooperatives exceeded 10,000. Soon after the Social Enterprise World formed in 2008 this trend began spreading globally. Large events such as the Davos Forum to discuss the changes needed in capitalist society have facilitated the creation of numerous social enterprises.

A top priority for social enterprises is to operate within the balance of providing a socially positive purpose while maintaining the profitability of their for-profit organizations. It is an innovative solution to serious social problems that governments cannot financially solve on their own.  Social enterprises create a way for companies that would not normally be involved, to become active participants in trying to find solutions to these social problems by demonstrating social responsibility and profitability can co-exist.

Many people perceive that social problems are caused by the competition-oriented market mechanism, only by which non-market approaches can resolve.  The new social enterprise model is changing this viewpoint by proving that businesses can have beneficial impact upon social problems while remaining profitable.  Social enterprises arise from social problems however they utilize a business-model approach of looking towards management and markets to solve the problems, rather than a more charity focused approach taken by many non-profit organizations and government welfare programs. Participation from civil society makes it possible to solve social problems through the market. Good economic activity leading to good consumption; creating a virtuous cycle of civil society that is the center of the social enterprise ecosystem.

The recent high interest in social enterprise shows numerous signs of change; represented by the new rise of capitalist society 3.0. Including social enterprises in the social economy of society is a task, which should be considered at national levels.  Now is the time to adapt to quality-focused policies rather than quantitative growth in the past six years, this point which should not be overlooked. Fostering social enterprise is the result of civil society’s voluntary participation rather than relying upon governments to respond to social issues.  Social enterprises should put an emphasis on ‘business’ and introduce talented personnel into their teams in order to do so. Through the exchange of social finance and social capital altruistic capital should be provided.

Social enterprises should be selected by a social value rating system, and through business-to-business network as well as social support organizations. I hope social enterprises are stabilized as economic entities and policies that can provide for this stabilized system are enacted in the near future. The 2014 Social World Forum held in Seoul, Korea on October 7th will be an opportunity to look forward to great progress.

Professor Youngbohk Cho of Busan University

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