When Dreams Come True: Reflections on ‘Social Economy’ in Korea

*Author, Won-soon Park is a prominent civil rights lawyer, civic activist and social innovator. He became Mayor of Seoul in October 2011.

First there was triumph of market economies after the fall of the Soviet Union. Then came successive global financial crises that debunked that triumphalism. Now, a new concept is emerging around the notion of “social economy” that promises to build societies based on community sentiment and a philanthropic spirit rather than cold greed. Seoul Mayor Won-soon Park, a proponent of social economy, explains his vision.

Human beings have the ability to see the unseen — to garner the wisdom needed to inspire major changes and advances in society. We need only to look at developments in religion and art throughout history, for example, to see the truth in this. This ability to see the unseen can make the present more prosperous than the past and stimulate hope for a better future. Indeed, the human ability to overcome challenges with insight and wisdom have led to some amazing achievements and fostered in us a sense of the unlimited possibilities of the future.

The marketing guru Philip Kotler was right when he said the real problem today does not lie in economic cycles of boom and bust, but that we have entered an era where turbulence has become an everyday occurrence due to globalization and technological advancement. His assessment has significant implications for a time when things can simply change overnight, and often do. But if we look back through history, we can see that crises always create opportunities. Through the worst of times, human beings hold on to hope like a lifeline, and put their minds and souls into realizing their dreams. From this perspective, we can view the current tumult as a time of hope for the future.

This mindset is part of what we call “social economy.” Simply put, social economy is an alternative form of society and economy constructed by marginalized people who have been losing out in the pursuit of neo-liberalism. Social economy is rapidly spreading throughout the world, like a revolution. Its cornerstone is consideration for others, with the end result being the creation of a sustainable society where everyone benefits. We derive hope from this model because what it seeks to achieve is based on community sentiment and a recovery of philanthropy rather than cold, insatiable greed.

A Revolution in Values

I am reminded of the World Economic Forum at Davos in 2006. The participants who received the most attention were not the political leaders and corporate CEOs. Rather, the spotlight shone most brightly on the social entrepreneurs. At that time, the world was already starting to recognize the value of the new social economy revolution — the participants espoused a vision in which hope was the primary way to generate meaningful value for the future. Movements to foster such hope can be found in many parts of the world.

There are approximately 55,000 social enterprises in the United Kingdom. These companies generate about five percent of domestic jobs, and their collective sales account for almost one percent of total gross domestic product (GDP). The British government recognized the value of social enterprises early on, and has been providing active support since 2006. Worldwide, there is a growing understanding of the importance of the social economy as a sustainable tool to tackle various social issues. Perhaps the emergence of this alternative economic structure is a natural consequence of globalization and the technological developments that brought on numerous crises.

Social enterprises can be structured as for-profit or non-profit. They are experimental and offer an alternative way of doing business that utilizes corporate efficiency and productivity to put people first, advance local communities and enhance the public interest. They grow out of the basic human need to live in harmony and community with others.

In South Korea, I have seen many seeds of hope for the social economy, and felt it was my duty to do what I could to grow those seeds. I was lucky to be in a position to harness these possibilities. Of course, there were many challenges along the way, but there was no shortage of motivation to find solutions.

Our Vision

I am proud to be among the early pioneers who believed Korea could be transformed into a society that shares and gives hope through social enterprises. I began my career as a human rights lawyer and later helped establish a civic group called the People’s Solidarity for Participatory Democracy (PSPD) with jurists, scholars and activists who, like me, yearned for a new society after the collapse of the military dictatorship in 1994. This organization aimed to build a society where the rule of law and common sense apply, where citizens are enlightened and institutions are sound and reliable.

One of the group’s early initiatives, the “Claim Your Rights” movement, demanded protection for minority shareholders of large conglomerates. In another movement, we called for basic social welfare for citizens, which led to the passage of the National Basic Living Security Act. We were also very active politically, exposing corrupt politicians in order to block their election. These activities were new at the time in Korea, and they contributed much to advancing democracy and human rights in Korean society, which was so obsessed with economic growth that people had become an afterthought. These efforts also paved the way for creating an environment where social enterprises and the economy could flourish together. Perhaps the most significant realization we had was that true prosperity must be built on a foundation of human rights and peaceful co-existence.

As various movements spread the value of charity and citizens’ participation in Korea, I established The Beautiful Foundation in 2000 and The Beautiful Store in 2002. As its first initiative, and under the belief that we can share no matter how little we have, The Beautiful Foundation launched a donation campaign in which one percent of what people earned was shared. This campaign changed people’s perception of donations, allowing them to see that it is easy to share and that happiness comes from sharing for both the giver and the receiver. The value of sharing is now deeply rooted in Korean society. And that campaign inspired many similar ones. The Beautiful Foundation has collected a total of about 100 billion won ($92 million) in donated funds, putting that money into projects that are the salt and light of our society.

From Beauty to Hope

The Beautiful Store could be seen as the first social enterprise in Korea. When it was launched, the term “social enterprise” did not yet exist. The Beautiful Store began operating under the slogan “One person’s trash is another’s treasure,” and is one of the first small, non-profit organizations in the country to grow into a solid, sustainable business. The store’s recycle and reuse campaign helped spread the culture of sharing and recycling as a way to establish a sustainable economic ecosystem. The idea is simple. People donate things that they don’t use any more, and the proceeds gained from selling the items at low prices are used to support philanthropic projects. There are currently more than 130 Beautiful Stores operating in Korea, with more than 400 employees and over 10,000 volunteers; the stores together generate total sales of 30 billion won per year.

The Beautiful Store also incorporated the fairtrade movement early on, setting up a subsidiary called The Beautiful Coffee, which imports coffees and teas from countries such as Nepal, Bolivia and Tanzania. This business generates annual sales of 3.5 billion won, and the proceeds are used to build schools and fight poverty in local communities. In collaboration with Oxfam, The Beautiful Store is helping to prevent floods on the Ganges in India and to support minority tribes in Vietnam. These days, The Beautiful Store is working on another program called The Beautiful Fellowship, to assist aspiring youth to realize their dreams of opening social start-ups.

At this juncture, I wanted to shift my focus to projects that could make small, grass-root changes. More than anything else, I wanted to cultivate hope, and this led to my founding The Hope Institute, a civic think tank. Actually, I like to call it a “think & do tank.” The Hope Institute saw that Korea needed creative innovation to tackle joblessness and bridge the widening gap between the top 1 percent and the bottom 99 percent of society. It set out to implement unique projects for the good of people and based on innovative experimentation.

Our work at the Hope Institute began with conceptualizing and designing a new society. Creative policies were suggested by citizens to improve the living environment and ideas were put into action in co-operation with the government. We opened the Social Designer School to help aspiring entrepreneurs open up social start-ups, and began the Design Your Happy Life Academy to assist retirees in drawing up life plans after retirement. We also provided consulting services for local governments to establish social economic policies and revive local communities, and organized the Asian Social Innovation Summit, to which renowned social entrepreneurs in Asia were invited to share their ideas and experiences.

The fertile soil of Asia’s social economy must be cultivated. Asian countries including Korea should set up favorable social infrastructure in sectors like finance, taxation, consulting and marketing that can provide support for the social economy. If we share our experiences and learn from each other, we will achieve more than we would by standing alone as just one country.

There are numerous precedents that tell us that achieving a social economy is possible. In the United States, there are many local foundations dedicated to a specific community or ethnic group that work in broad co-operative coalitions to pursue a sustainable local economy that benefits all. About 10 years ago, The Beautiful Foundation opened overseas chapters in New York and San Francisco. We received donations from many Korean-Americans and executed programs not just for Koreans, but for other minority ethnic groups as well.

Solving the Big Issues

Another very important element is governance. Recently, governments, corporations and civic groups have started to put aside sectoral boundaries to forge partnerships; indeed, such trends are commonly found in many countries. This is part of a growing movement in which social enterprises are utilized to solve social issues — a unique pursuit in which the public uses corporate ways of doing business to achieve social purposes. As we envision a sustainable society, we must keep social entrepreneurship, creativity, morality, an experimental mindset and the quest for alternative solutions firmly in mind. These will be the drivers for a social revolution in local and regional communities.

The Social Enterprise Promotion Act was recently enacted in South Korea, and broader institutional support is now available for social enterprises. However, some innovative companies and non-profit organizations are not recognized under the current law and therefore lack support and investment. Several years ago, some initiatives were launched to solve this problem. One example is the online micro credit service ONEclick.com, where citizens can donate small amounts of money to the underprivileged who have limited access to banking services. Despite the notable success of this online social donation service, the banking sector still has a long way to go and there is much room for improvement.

I was an active social entrepreneur until relatively recently, shifting my focus when I was elected mayor of Seoul in October 2011. Becoming mayor represented more than just a dramatic change in my personal life and career, it offered an invaluable opportunity to nurture social enterprises and build a strong foundation for a social economy. During my term, the city administration aims to define the role of government in promoting social enterprises as well as their structure and governance. The administration will also work on laying the groundwork for social finance. The city government is already committing administrative resources to achieve these goals.

About a year ago, the city government set up a division dedicated to nurturing social enterprises in Korea. A social enterprise certification system was introduced to promote social enterprises, and a total of 6.1 billion won was earmarked to support business development of social enterprises. Other city initiatives include promoting 50 innovative social enterprises to solve social issues, opening an online shopping mall to sell quality goods manufactured by social enterprises, organizing a co-operatives festival, nurturing social start-ups that offer jobs for the underprivileged and the vulnerable, selecting exemplary enterprises to receive assistance in accessing domestic and overseas sales channels, reviving villages in the city and creating co-operatives run by local communities. Some projects are still taking root and others are already making changes in our society. These policy activities of the city government will provide a strong foundation for the future growth of Korea’s social enterprises. My hope is to see this movement take hold in every corner of our society.

Social Investment

Last June, Seoul decided to create a social investment fund for the first time in Asia. Social investment is about making investments to achieve balanced development and generate new drivers for future growth. The investments are aimed at lowering social costs, increasing birth rates, developing growth engines, nurturing small and medium-sized companies and creating jobs. Through these investments, Seoul wants to achieve two objectives. First, we aim to build sustainable and powerful support schemes to solve complicated social issues such as the income gap, the aging population and unemployment. Second, we want to secure stable financial sources to eliminate financial blind spots and assist social enterprises and other alternative businesses that are often left out of support programs.

If we are to proceed smoothly with these plans, we must change our perceptions. If we share the same understanding of what we want to achieve, it will provide strong momentum, but if that is not the case, we must invest in achieving a collective understanding. Here, perception refers not just to the thinking of ordinary citizens but also policymakers and experts on public administration and welfare. Changing the perceptions of such professionals is important because the idea of using market mechanisms to solve social issues is quite new. However, one of the main attributes of social investment is the broad participation of stakeholders and their close co-operation. This is more the key to success that the size of the investment. When various entities participate, social costs can be reduced and this will result in higher returns on investment. Because of this, getting members of society to shift their perceptions and get actively involved is of the utmost importance. As a social activist, I found accomplishing this shift in perception the biggest challenge.

In this sense, it is a welcome development that large conglomerates are now striving to fulfill their social responsibilities and shed the negative image of chaebol. Combined with policy efforts, these initiatives can aid in the development of social entrepreneurship and the social economy.

We should be careful not to miss an important point. Social enterprises are made when people lend a hand and share their hope with the poor and vulnerable. A corporate culture where people truly care for each other is the basis of social enterprise. But large conglomerates more often than not pursue profit to the point of recklessness and without considering people. They tend to approach corporate social responsibility from the perspective of merely giving back; in other words, the reason why social enterprises exist is often irrelevant to them. In such an atmosphere, social entrepreneurship may be seen as just a form of charity.

Nevertheless, ongoing endeavors among large conglomerates are meaningful because when corporate assets and know-how in specific fields can be positively utilized, continuous value for our society can be generated. Large conglomerates have resources and are capable of using those resources to generate new types of value. They are also capable of running a sustainable business. As long as they do not try to control social enterprises as they would their subsidiaries or run the business in a way that does not maximize shareholder profits, large conglomerates’ promotion of social enterprises has the potential to become a good example of co-operation and collaboration.

Keep Dreaming

I tell myself everyday that the world belongs to those who dream. If you don’t even bother to dream, what can you achieve? And if we take this idea one step further and dream together, the dream is more likely to be realized.

Korea is entering yet another transitional period, with changes in political and other circles. Technologies keep advancing at breakneck speed. Crises come and go in economies around the world. It’s not an easy time, but in Korea, we hold on to our hope, and it is one we want to share with the world. Citizens of Seoul, including myself, support your dreams and your future. Let us share with each other and share the outcomes — and let us start now, as we enter a new year with new eyes. <Global Asia/Won-soon Park> микрозайм на карту по паспорту и снилсу