Research Reports
Fostering Social Enterprises for Rural Vitalization and Job Creation
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AuthorOh, Naewon
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Publication Date2010.10.01
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Original
Recently, developing social enterprises is considered as the third way to vitalize depressed rural areas instead of government policy and market mechanism. But we have just few ideas of actual conditions and the potential roles of social enterprises in rural areas. The purposes of this study are to analyze their conditions and roles in rural development, and to suggest policy strategies to foster social enterprises.
We carried out a survey targeting social enterprises in rural areas to review their real conditions, and analyzed their roles in endogenous rural development, business management performance and business capacity. We also performed in-depth case studies of Hoengseong-gun, Gangwon-do and Jinan-gun, Jeollabuk-do to look into the realities of social economies of rural areas and the roles of the individual social enterprises in rural vitalization.
In terms of rural development, we found out that social enterprises are very conducive to endogenous rural development by local embeddedness of their input-output linkages, socio-economic networks and labor input, etc. Yet, some problems to be solved are also discovered. For instance, rural social enterprises lack outward linkages for accessing to more specialized resources such as finance, information, experts, and so forth.
As for the analysis of their income and expenditure, majority of rural social enterprises are making ends met. In their incomes, 70 percent is made up of operating revenue and 30 percent is composed of non-operating income. But, because most of their non-operating income is originated from government support funds, many people are concerned about their business sustainability.
For evaluation of business capacity of rural social enterprises, we analyzed their visions and strategies, organizational skills, human resources, organizational structures and systems, and organizational culture. As results, we found that rural social enterprises had commonly very weak capacity in terms of five valuation bases mentioned before. In addition, rural social enterprises lack of government support for improving their business capacities.
As the result of this study, we suggested some policy strategies for fostering rural social enterprises as follows.
First, the existing government certification system of social enterprises should be amended so that various voluntary and organizational efforts to improve difficult situations of rural areas can be appreciated as social enterprises.
Second, business models of social enterprises suited to rural areas should be developed and disseminated.
Third, a variety of agents acting in social economies should be discovered and fostered as social enterprises in rural areas.
Lastly, government supports should be offered to strengthen business capacity of social enterprises based on cooperative networks among central, regional, and local governments.
Researchers: Nae-Won Oh, Sang-Jin Ma, Kwang-Sun Kim, Chang-Ho Kim and In-Hey Kwon
Research Period: 2010.1~2010.10
E-mail Address: naewonoh@krei.re.kr
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