Investigating the Factors Influencing the Sustainability of Social Enterprises in Korea

Abstract

In Korea, the unemployment rate is not improving, the income disparity between rich and poor is widening, and a large percentage of young university graduates are unemployed (the employment rate is approximately 58 percent as of 2014). Ordinary people's demands for additional jobs and social benefits are becoming more vocal and serious. In this context, social businesses in Korea emerged as a means of addressing the problem of unemployment, particularly among disadvantaged social groups, and boosting the supply of social services. Since the establishment of the Social Enterprise Promotion Act in 2007, the number of social enterprises has been steadily expanding, and as of December 2014, there were 1251 in total. However, critics have questioned the viability of social enterprises, claiming that they fail to continue operating or shrink in size once the benefits and government subsidies they receive as certified businesses expire.The purpose of this study is to look at the elements that influence the long-term viability of social enterprises in Korea, as well as to propose theoretical and policy implications on how to improve social enterprise viability.