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Comparative Analysis of the Promotion of Social Enterprises in Singapore and South Korea
Singapore and South Korea began to promote social enterprises at about the same time (2006), with the principal policy direction being the stimulation of employment and provision of jobs for members of disadvantaged groups, as well as to encourage social innovation. Currently in Singapore there are about 170 social enterprises, with 699 in South Korea. In the following discussion we describe the similarities and differences between the two countries in terms of their policies of promoting and developing social enterprises:
I.Dedicated units under cabinet-level agencies, but different supervisory ministries
Both governments have established dedicated units in charge of promoting social enterprises: Singapore has the Community Care and Social Support Division under the Ministry of Social and Family Development; South Korea's counterpart is the Social Enterprise Division under the Ministry of Employment and Labor, and the country has also created the Korea Social Enterprise Promotion Agency (KoSEA), which is responsible for implementing and promoting social enterprise policies, e.g. business incubation, business unit certification, business monitoring, consultation services and networking.
II.Government leadership and guidance via varying promotional strategies and practices
No specific legislation regarding social enterprises has been enacted in Singapore, nor has an explicit definition for social enterprises been provided. However, the government has created the ComCare Enterprise Fund (CEF) to help newly established social enterprises survive and grow during their first two years of existence, as well as to employ the following three approaches to development of social enterprises: capacity building, enhancing public awareness and optimizing financial options. The government provides guidance to the public on investing in social enterprises while maintaining the flexibility and space of private sector development. The emphasis is on how a social enterprise business model is implemented, and a recoverable cash flow model is crucial in order to ensure that the enterprise can survive on its own in the future. The government provides financial assistance to newly created social enterprises from the perspective of investment. The government collaborates closely with civil organizations and accepts and adopts policy proposals from them whenever appropriate.
In South Korea, the Social Enterprise Promotion Act has been enacted, and a semi-official organization, KoSEA, and the Social Enterprise Support Committee have been established. The government has also developed support programs and conducted regular studies, social enterprise certifications and tax breaks for social enterprises, as well as provided financial assistance and imposed fines for negligence. The government takes the lead in fostering the step-by-step development of social enterprises through incubation institutions and support programs. The regulatory environment also encourages enterprises to participate.
III.There are many types of social enterprises, but they are classified according to different schemes
Each country has a large variety of social enterprise models, and each is subject to a different official classification method. Based on the operation model, Singapore classifies social enterprises as Work Integration Social Enterprises (WISE), plough-back-profit models, subsidized services models, and social needs models.
For South Korea, the classification scheme defined in accordance with Article 8 of the Enforcement Decree of the Social Enterprise Promotion Act is: Public-service corporation, non-profit private organization, social welfare foundation, cooperative and other non-profit organizations.
IV.Actively fostering and encouraging young people to participate in entrepreneurship, but with incubation institutions of various types
Singapore has created an environment for youth entrepreneurship and training using the Youth Social Entrepreneurship Programme for Schools (YSEP) to encourage schools at all levels to make proposals for their students to participate in social enterprises, as well as making the SCAPE Youth Centre a nurturing ground for the training of young entrepreneurs.
Through incubation institutions (e.g. SEN, WT and Haja Center), South Korea provides training and consultation services as well as creates resource network platforms and utilizes government funds to encourage and help young people to participate in or start up social enterprises.
Comparison of social enterprise development | ||
Item | Singapore | South Korea |
Year of implementation | 2006 | 2006 |
No. of social enterprises | about 170 | about 699 |
Type of social enterprises | 1.Work Integration Social Enterprises (WISEs) 2.Plough-back-profit model 3.Subsidized services model 4.Social needs model | Pursuant to Article 8 of South Korea's Enforcement Decree of the Social Enterprise Promotion Act, several categories of social enterprises are defined explicitly: 1.Public-service corporation 2.Non-profit private organization 3.Social welfare foundation 4.Cooperative 5.Other non-profit organizations |
Objectives | The Social Enterprise Committee is of the opinion that the most important value of social enterprises is job creation and provision of training for members of disadvantaged groups, who are able to achieve self-reliance and improve their self-esteem through work. | Contribution to social integration and the improvement of citizens' quality of life by expanding social services, which are not adequately resourced in our society, and creating new jobs (Article 1 of the Social Enterprise Promotion Act). |
Definitions | Businesses established to achieve social objectives by using marketing strategies in order to solve social problems, as well as employing a wider system to meet the needs of society. | An enterprise that is legally certified and pursues a social objective, such as raising local residents' quality of life, by providing vulnerable groups with social services or jobs while conducting business activities, such as the production and sale of goods and services. (Article 2 of the Social Enterprise Promotion Act). |
Dedicated government agency | ComCare and Social Support Division under the Ministry of Social and Family Development(MSF) | Social Enterprise Division, The Ministry of Employment and Labor (MOEL) |
Promoting strategies and actions (plans) | 1.The government, individuals and the private sector support the promotion of social enterprises through a variety of innovative models and industries, as well as employ the following three approaches to develop social enterprises: capacity building, enhancing public awareness and optimizing financial options. 2.Using the ComCare Enterprise Fund (CEF) to help newly established social enterprises grow during their first two years of existence. 3.Using the Youth Social Entrepreneurship Programme for Schools (YSEP) to encourage schools at all levels to educate their students on social enterprises and to have them participate in activities. 4.Using the space at the SCAPE Youth Centre to attract young people to gather as well as encourage them to start new businesses there. 5.Civil organizations involved in promoting social enterprises: Social Enterprise Association, Social Innovation Park (SIP), NTUC (National Trades Union Congress) Social Enterprise | 1.Promotion of social enterprises through the Social Enterprise Promotion Act, including the establishment of Social Enterprise Support Committee MOEL support programs, regular research, social enterprise certification, tax breaks on social enterprises and other related businesses, and social enterprise financial assistance. 2.The MOEL established KoSEA, a permanent implementation agency; the Ministry also promotes major social enterprise policies and measures through civil incubation institutions, organizes networking platforms and hosts international events. 3.KoSEA organizes social adventure competitions to enable young people and ordinary citizens to gain a better understanding of social investment and social enterprises, as well as promoting social values and encouraging participation from social entrepreneurs. 4.Haja Center utilizes space made available by the Seoul Metropolitan Government to provide young people with an environment for entrepreneurship and learning. 5.Civil organizations involved in promoting social enterprises: Korea Social Enterprise Promotion Agency (KoSEA), Social Enterprise Network (SEN), Work Together Foundation (WT) |
Name and description of funding program | ComCare Enterprise Fund (CEF) | Social Enterprise Promotion Act |
Enhancing connections with the international community | 1. The government publishes the English-language Report of the Social Enterprise Committee and makes it available for download at government websites. 2. The Social Innovation Park (SIP) organizes the Global Social Innovators Forum (GSIF) annually and invites 530 representatives from over 30 countries to the event. 3.Websites of government and civil organizations are available in English. 4.Members of the government and civil organizations are able to communicate in Chinese and English. 5.Civil organizations welcome visitors from other countries. For example, Ms. Elim Chew and her assistants accompanied our learning expedition throughout the trip. | 1. WT organizes the annual SELF Asia (Social Enterprise Leaders Forum in Asia) with ASES (Asian Social Entrepreneurs Summit), where social entrepreneurs and leaders from Asia are invited to participate. 2. English versions of the websites of the MOEL and related incubation institutions are available. WT's website is also available in Chinese. |
Overall development advantages | Civil organizations are enthusiastic and innovative and enjoy close working relationships with the government; emphasizes the feasibility of business models. | Strong government-led efforts and legislation facilitates the promotion of social enterprises and raises awareness. |