Let’s first look at what social economy is. Social economy can be defined as “all economic activities of the private sector that create social value through the production and sales of goods and services based on cooperation and self-reliance among members of the society.” Four major social economy enterprises are social companies, cooperatives, village companies, and self-supporting companies. The government also has separate departments for each of these types of companies. The Ministry of Employment and Labor is responsible for social companies, Ministry of Economy and Finance for cooperatives, Ministry of the Interior and Safety for village companies, and Ministry of Health and Welfare for self-supporting companies. As of 2020, there were 2,777 social companies, 19,429 cooperatives, 1,652 village companies, and 1,062 self-supporting companies, showing that there is an overwhelming number of cooperatives nationwide.
Below is an overview of social economy enterprises as put together by Yongsan Integrated Social Economy Support Center.

Of these, social companies refer to organizations that pursue social goals (offering jobs and social services to vulnerable groups) and conduct business activities, such as generating profits.
I’m sure that some of you have seen Beautiful Store in Yongsan, the home of Amorepacific. It has conducted the Beautiful Saturday campaign where our employees have collected goods, as individuals or teams, and have made donations together with HQ and even with our regional offices, since back when Amorepacific was called Pacific. Some employees even donated hundreds of items when they moved or got married.

Beginning in April, the use of disposable goods has again been restricted in cafes and restaurants. There is also an organization called Trash Busters that provides cup-rental service for festivals and events. Sangsang Woori offers education programs and consultations to retirees to help them plan for the second part of their life, getting a new job, or starting a new business so that their valuable experience and wisdom can continue to contribute to society. Sangsang Woori has proposed that Amorepacific join the effort in helping middle-aged people understand the latest trend. Some people think that social companies only engage in good deeds, but they are in between for-profit companies and non-profit companies, and they pursue social goals and conduct business activities at the same time, so they rightly seek profit.

Now then, moving on to cooperatives. They are “enterprises formed by five people or more with common goals.” The reason why there is a larger number of cooperatives among the four types is that there is no limit on the type of business they can engage in. Starting from social services including welfare and childcare to employee cooperatives (members = employees), and economic/social sectors, it is possible to conduct cooperative activities on a wide range of areas. Just in Yongsan, where the head office is located, there is a diverse range of cooperatives from Korean Multicultural Cooperative to Dabap Cooperative. Korean Multicultural Cooperative was founded to provide systemic support for multicultural families on education, employment, grievance counseling, and their stay in Korea with an aim toward promoting the rights and interests of multicultural families. Dabap Cooperative, the ‘Talk-to-me’ self-help group for migrant women, has conducted the “elephant doll” campaign as one of its sharing activities. They can be seen as an enterprise that improves the rights and interests of their members while contributing to the local community.

Most people may find village companies unfamiliar. They are village-based corporations that have been founded voluntarily by residents to reinvigorate local communities through businesses that leverage local resources, while contributing to regional development by providing a chance to generate income and work. Village companies are particularly dedicated to local communities because at least five local residents must invest in the business and the ratio of local residents must be at least 70%. Lastly, self-supporting companies are businesses run by recipients or low-income earners as a producer cooperative or a joint business based on skills they have obtained through self-support projects run by local self-help centers.

In this way, social economy enterprises are run by autonomous management of members through voluntary participation and democratic decision making where all members are given a single vote. They place priority on social values like the sharing of profit, creating jobs for the vulnerable groups, and contributing to the local community instead of simply seeking profit. Citizens voluntarily form groups and cooperate to solve social issues and realize social values, while acting in the third domain where they compete with for-profit companies and supplement areas where the market and the government have failed. On the economic front, they create jobs, promote employment stability, and help expand participation of the vulnerable populations like women on a career break, retirees, and people with disabilities in economic activities. On the social front, they are contributing to the effort to buttress the “social safety net” by bridging the gap between the rich and the poor, eliminating blind spots in welfare systems, and responding flexibly to new demand for welfare services. Above all, they encourage direct participation of residents to recover trust between them and contribute the most in building a community culture.

Therefore, many companies and brands have collaborated with social economic enterprises. One of our brands, Mamonde, has collaborated with a social enterprise, Marymond, since 2015. As a lifestyle brand that acts to promote human rights and oppose violence, Marymond carried out the “Flower Grandma Project” inspired by victims of sex slavery by the Japanese army. Following this, the brand conducted “Project Namu” for “children who are victims of domestic violence.”

Next up is social ventures. Social ventures are defined as “businesses that address various social issues with innovative technology or business models and pursue sustainable profit and social value.”
As you can see in the diagram below, social ventures combine the strengths of both for-profit enterprises and social economy enterprises.

There are no official statistics on the number of social ventures in Korea yet. No law defines what a social venture is, and since these enterprises are not categorized separately as “social ventures,” we can only assume that there are approximately 1,500 social ventures in the country. Social issues that social ventures seek to solve can be summed up as “increasing the number of quality jobs and economic growth, guarantee of healthy, happy life, decline in poverty and reinforcing the social safety net.”

A good example that I can think of is a brand named “Paper Pop” that held a pop-up exhibition, Home Sweet Home, at innisfree’s Discarded Bottle Space up until last month. The show was about sending out a message on the value of paper and recycling. Paper Pop is a social venture that makes furniture, of which over 70% are made from recyclable paper to address the issue of disposed furniture. They make all kinds of furniture, including paper desks, storage cases, study room partitions, and bed frames.

Montsenu is well-known as a sustainable fashion brand. It is also a social venture, which recycles waste like plastic to promote sustainable consumption to conserve the natural environment. Many people have probably heard of a tree-planting social venture, Tree Planet. Tree planet began as a tree-planting game. It grew through crowd funding for creating both celebrity forests and commemoration forests, and it is now even inviting individuals to plant a tree by adopting a companion tree. They reportedly aim to plant 100 million trees by 2050, making them a good example of a company with longer-term goals than general for-profit companies.

Amorepacific, for its part, held a public contest called “A MORE Beautiful Challenge” for eco-friendly products and service ideas targeting social ventures, startups, and social innovators until April 11. We are in the process of starting new partnerships so that there will be more cases through which we can collaborate with social ventures later this year.

On top of this, another organization with a new concept has emerged, which are non-profit startups.

Non-profit and startup are two contradictory concepts, but they can be recognized as organizations that undertake public interest activities to solve social issues by maintaining the identity of a social venture, while playing to the strengths of startups by adopting fresh, innovative technologies and agile decision making. This is an unfamiliar concept, but different non-profit startups are burgeoning up to pioneer these new spheres. WIPERTH, a combination of “wipe” and “Earth,” has greatly contributed to raising awareness on the new concept of Plogging (picking up trash while jogging), and Wear Again Lab, which launched the Wear Again campaign to encourage people to wear old clothes under the motto, “The most sustainable clothes are ones that are already in your closet.” Through this, they are reinventing old clothes through the 21% Party. These non-profit startups are the rising organizations that have become part of the trend lately that is also seeing institutions like Asan Nanum Foundation, Daum Foundation, and Seoul NPI Center taking a keen interest in them and providing support.

We learned roughly about what social economy enterprises, social ventures, and non-profit startups are, which you may have found difficult to distinguish one from another. In order to start a partnership with them, we need to be keen about their characteristics, and consider how we handle donations and communication with stakeholders. I will personally visit the organizations that show best practices in each category and deliver fresh, crisp news by conducting interviews with the CEOs.

Stay tuned to this column, which provides you with the opportunity to discover the many different people who are transforming the world into a more beautiful place with their ingenious, novel ideas.