Social Innovation in Korea (1)
Government & Corporate (8th May, 2018)
Social Innovation plays a key role in government initiatives for social and economic development, building on the foundation of social economy and democratic movements in the past 10 years. The current government has developed a number of policy directions and objectives directly involving the wider social innovation sector, including support for social economic businesses and social finance, as well as financial support and investment for social ventures in Korea. All initiatives leads to the following outcomes; 1) Expansion of social finance and social economy, 2) Support for young entrepreneurs, and 3) Reconstruction of supporting system for social economy. One of the challenges for Korea is ‘job creation’ especially for young people (20-30s), and the government focuses on supporting Small and Medium Enterprises(SMEs) to lead innovative growth, including startups and social ventures. This was the major role of the ministry of Employment and Labour (MOEL), but currently the role has been distributed to other government ministries, which is a sign of a comprehensive approach to the challenge.
The newly established ministry of SMEs and Start-ups(MSS, as stressed in its name) exists to provide a better environment to encourage the society to provide more opportunity for growth and investment to startups and SMEs, including leading young people to play a bigger role in the sector. MSS also aims to develop and deliver policy to create and foster effective startup ecosystem which enables all players to facilitate and benefit from a sustainable growth. KISED, Korea Institute of Startup and Entrepreneurship Development, since its establishment in 2000 is committed to promote the ‘active participation of startup and entrepreneurship culture in society’ and has recently started to cooperate with social economy players to encourage the same approach, particularly for social innovation start-ups.
MOEL still plays a significant role, especially in the promotion and growth of social innovation and social economy sector. The new ‘Social Economy Law’ will be a huge step forward from the existing ‘Social Enterprise Promotion Law’, providing a foundation for an effective practice of policy activities across all the ministries and government-led intermediaries for social economy sector. KOSEA, Korea Social Enterprise Promotion Agency, is the leading intermediary for social enterprises and provides support programmes at various levels including policy development, network management and research projects. KOSEA is also responsible developing a strategic framework for a quality growth of social economy sector, following on from its successful milestones of increasing the quantity of sector players and employment rate.
As in most society, it is easy to imagine Korean government and corporate heading towards same, if not similar, direction, and this applies to Korea’s leading corporate including SK group. In fact, SK group has been ahead of all the others in the social innovation sector under the strong leadership of the owner family. Not only social innovation is embedded across its business areas, the group is moving towards becoming a ‘social innovation enterprise’ itself. Their areas of support includes the management of SK Happiness Foundation, which runs most of groups’ ‘core’ projects. The foundation supports and invests in early-stage to growing social ventures, and delivers research projects on identifying a model for an effective and impactful social businesses, to apply the outcomes back to the businesses they support and invest. A very interesting model they run is the ‘SK-KAIST MBA for social entrepreneurs’, in partnership with KAIST(Korea Advanced Institute of Science and Technology), to support and train potential social innovators with full-time scholarships provided.
Another leading corporate with a strong initiative is LG. Like most chaebols in Korea, LG Groups has a number of affiliates, and in the social innovation and social economy scene, LG Electronics and LG Chemicals ‘in partnership’ is working together to develop ‘LG Social Campus’ project. The project is basically an incubating programme, providing space, financial support, mentoring and coaching, and individual capacity building. The significance of this project lies in that it is the first partnership-based project among public, private and academia with a social economy intermediary The Social Solidarity Bank.
Hyundai H-Ondream is another large scale project to support social innovation startups and entrepreneurs. Since its launch in 2012 the project has developed to run two different strand, each focusing on ‘incubating groups’ of early-stage businesses, and ‘accelerating groups’ including intermediaries and social economy players. The vision is to build a cooperative structure for various stakeholders to all benefit from the growth of social economy and social innovation sector.
KT&G, Korea Tobacco & Ginseng Corporation, is relatively a new player, but runs one of the biggest projects in scale. KT&G Sangsang Startup Camp, with a total investment of app. 280 million USD for two years, aims to provide an intensive high quality startup training for teams with initial ideas. Launched in October in 2017 with 45 social entrepreneurs to-be, programme is also designed and delivered based on the collaboration between KT&G, Underdogs—a social innovation startup company builder, and Social Solidarity Bank.
It is also interesting to look closer at some of the ‘smaller’ programmes initiated by corporates, because it is the evidence that social innovation and supporting social ventures has become a more common agenda and shared areas of interests. The ‘diversity’ in the programmes provided, industries where startups operate, and approaches to business models is growing fast, and the ‘smaller’ programmes and initiatives reflect this growth very well. For example, Coway Wi School, supported by Coway, whose business model is a ‘one-man business’, allows individual entrepreneurs with particularly ‘small and effective’ business ideas to develop skillsets and business know-hows based on Coway’s hands on experiences. GS Shop, a major media shopping channel, focuses on identifying and supporting social innovation businesses in media and commerce industry, and connects their own distribution channel with successful businesses. Naver, a Korean mega ‘Google’, runs an ‘Entrepreneurship Development Programme’ for various target groups including teenagers to develop entrepreneurship regardless of the age groups and social status.
Sangrae Cho, CEO of underdogs commented,
“ With strong initiatives on the Social Economy sector led by new government and investment from private enterprises, I think this is the right time to step forward to make a better social innovation ecosystem. To realize this opportunity, we need to put an effort to use government resources for the right place. Private enterprises also need to build sustainable partnership with social innovation enterprises to foster their business model rather than one-off investment.
#Underdogs is
The very first social innovation company builder established by previous∙present social enterprise founders, which retains self-developed contents and capabilities to company-build.
Our mission is to incubate social innovative entrepreneurs and grow up with them.
Specifically, we serve the variety of training, incubating, & coaching programs optimized for the practical start-up starting including our signature program called <underdogs' SE Academy> served without any charge, with diverse governments, organizations, and corporations.
(* The # of <underdogs' SE Academy> alumni 114, the average start-up founding rate 73% etc.)
NOW, we are looking forward to having opportunities to network & collaborate with partners and incubate the social innovative entrepreneurs in Asia, globally together.
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