Research Reports
The Social Economy in Rural Korea and the Policy Direction
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AuthorKim, Jeongseop
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Publication Date2016.01.26
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Original
Research Background
Recently, as the structure of rural population has become more complicated, a social exclusion problem is becoming more severe. There are some rural residents who make an effort to improve their quality of life for themselves by using a bottom-up approach in rural areas. In addition, there have been some legislation or policies that contain the concepts of social economy in them. In the field of policy study, there is a discussion about the possibility of using social economy strategies in the perspective of rural development based on some domestic or foreign cases. However, discussions about how the rural policies can embrace social economy strategies more specifically are rarely accomplished. It is necessary to analyze the situation of social economy organizations in rural areas in depth and comprehensively to establish a logical or complementary relationship between the legislative system and the various policies regarding the social economy.
Research Method
In order to carry out research, various methods and data were employed. Several preceding researches have been reviewed in order to grasp the trend of theories and discussions about the social economy. Analysis on the current situation of social economy organizations has been conducted by examining policy materials such as regulations and law regarding the social economy and performing a survey, an interview and a case study. The survey, the interview, and a literature investigation have been utilized to study social economy networks. On the basis of these analyses, we drew some policy tasks to be solved for the revitalization of the social economy in rural areas. The subject of study is limited to the newly emerging types of social economy organizations such as self-support businesses, social enterprises, cooperatives, community businesses, and rural community corporations.
Conclusion and Implication of Research
The number of social economy organizations in rural areas is presumed to be about 2,500 to 3,000, and more than half of these organizations were established during the past three years. Employees of newly formed social economy organizations account for 1.1~1.4% of whole employees in the areas and the ratio has shown rapid increase lately.
The ‘social purpose’ of the social economy organizations in rural areas is mostly to offer a job opportunity to socially disadvantaged class or social services. More than half of these organizations are managing their work in the field of agriculture or agriculture-related fields. While the most important financing source is sales income, profits from offering public services also account for about 12.6% of the total finances. Social economy organizations usually reinvest their profit or surplus and 12.5% of their profit or surplus are returned to society. The biggest problem in terms of management is ‘lack of funds’. Only about 10% of rural local governments have built a foundation for forming governance with the social economy sector by modifying ordinance.
There are some policy suggestions to revitalize the social economy in rural areas.
First, the social economy should be based on the needs of local people. By attaining more broad supports from the local society members, one organization could widen their market opportunity and utilize social capital more easily. Second, networks among the social economy organizations should be deepened and expanded. While the institute of social economy unity should take the lead in supporting social economy organizations’ establishment process, local governments or lower level agents than them should be constructed as the principal agents assisting social economy organizations. It is necessary to broaden ‘relationship transaction’ among social economy organizations and form an investment network to retain sustainability of the social economy. Third, a vertical governance system should be overcome and localization of social economy governance needs to be accelerated and be more applicable on the ground. Detailed guidelines should be reviewed and improved to propel policies building a partnership with the social economy sector and convey services in rural areas. Finally, the role of local governance should be defined to promote governance which is based on the partnership with the social economy sector. Ordinances should be enacted or modified so as to include social economy organizations’ offering public services by contract with the public sector or preferential procurement of products from social economy organizations. In addition, social economy support institutions need to be established and they should be supported to perform their supporting role under no partitions in terms of using funds or other resources and be given funds for operating costs, especially labor costs.
Researchers: Kim Jeongseop and Lim Jieun
Research period: 2015. 1. ~ 2015. 10.
E-mail address: jskkjs@krei.re.kr
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