(Unofficial translation)

Business leaders who uphold social values, I am glad to meet all of you.

I am grateful to Daejeon Mayor Her Tae-jeong, Korea Social Enterprise Promotion Agency President Kim In-seon and the other officials involved with organizing the Social Economy Fair. 

My congratulations also go to those we are honoring today for their dedication to the social economy.

Dr. Lee In-dong, who has just received the Order of Civil Merit, provided a good example of the social economy by founding Korea’s first medical cooperative. Civil Merit Medal recipients – Kim Hye-ok, Sohn Byeong-wan, Oh Mi-ye and Lee Eun-ae – have devoted themselves to growing the social economy in diverse areas. The 12 recipients of the Presidential Citation and the 18 who were awarded the Prime Minister’s Citation have all made great contributions to providing support for the vulnerable in society and developing the social economy.

I respect and applaud those who are working in the social economy sector – they put “us” before “me” and prioritize “sharing” over “possessing.” 

Just about a decade ago, the epithet “social enterprises” sounded unfamiliar. Some even equated the social economy with socialism. There’s still a lot of skepticism about the possibility of a social enterprise turning a profit while working in the interests of society or succeeding at a time when even for-profit businesses are finding it difficult to stay afloat. 

However, the social economy has come to make remarkable growth in Korea. Last year, the number of social enterprises reached 25,000, creating more than 250,000 jobs. In 2007, the number of officially certified social enterprises was only around 50. That number broke the 2,000 mark last year, a more than 40-fold increase. In addition, the number of cooperatives exceeded 14,000, making them more available to local communities and vulnerable people there. 

Importantly, the social economy has played a great part in creating jobs for the most vulnerable members of society, who comprise more than 60 percent of the employees at social enterprises.

At the social cooperative Agio, its 11 hearing-impaired workers make handmade shoes – holding cobbler hammers in one hand and hope in the other. The social enterprise Donggubat hires people with developmental disabilities and produces natural soaps. Of its 32 employees, 20 workers are society’s most vulnerable. 

Conventional social enterprises are increasingly expanding their roles. Some time ago, the National Agricultural Cooperative Federation hired 167 people with disabilities through special job offers. The National Credit Union Federation of Korea provided 100 billion won in unsecured, interest-free loans for the self-employed as well as microbusiness owners and out-of-work heads of household who needed emergency funds for daily necessities.

Social business ventures that set their sights on addressing social issues through innovation are making strides as well.

Among them, there is a business that developed a Braille smartwatch for the visually impaired and a startup that invented a high-efficiency lamp that uses recycled cooking oil. When Nepal was hit by a massive earthquake, one business venture sent its camera-equipped drones to afflicted areas to assist recovery work. All of these are businesses that have led efforts to resolve social issues with an innovative mindset.

Social enterprises are at the forefront of solving problems big and small in our society and serve as a reliable buttress for the vulnerable people in our communities. I am deeply grateful to you all.

Social enterprise business leaders,

The Republic of Korea, once the most impoverished country in Asia mired in the ruins of the war, has emerged as the world’s eleventh-largest economy in just over half a century. This is an invaluable feat achieved by all Koreans together. 

However, the rapid economic growth has left dark shadows over Korean society. Various social issues have surfaced, including inequality, polarization and environmental destruction. 

The market economy alone is not perfect enough to resolve all of these problems. Efforts to deal with these shortcomings were the starting point of the social economy. The social economy is about filling in the gaps and weak points found in a profit-driven market economy by taking into consideration social values as well. 

In Europe and Canada, the social economy has long served as an important pillar of the national economy. In Sweden, where I paid a state visit last month, about 11 percent of its working population is engaged in the social economy. The average participation rate in all EU member countries stands at 6.3 percent. In the case of the Canadian Province of Quebec, sales from businesses in the social economy account for approximately 8 percent of the province’s total GDP. Given that the social economy still employs less than 1 percent of Korea’s total working population, it can be said that Korea has a lot of room to grow in this sector.

Nowadays in Korea, we’re also witnessing an increase in the number of companies that prioritize the value of sharing and employ the vulnerable in society, including those physically challenged. Recently, a growing number of social business ventures are being founded spontaneously, especially in the Seongsu-dong region of Seoul. 

The social economy is an important pillar of the people-centered economy and inclusive nation that my Administration is pursuing. Catholic priest José María Arizmendiarrieta, who founded the Mondragon Corporation in Spain, said, “The overriding value of a cooperative is people and the protection of human dignity.” The Korean economy is also growing with more focus being placed on “people” than “profits” through the social economy.

From the start of my Administration, we’ve paid keen attention to social economic values.  

My Administration incorporated promoting the social economy into its major policy tasks and created the new post of Secretary to the President for the Social Economy. The special committee on the social economy was established under the Presidential Committee on Jobs, and various social economy-related events held by different ministries and agencies have been integrated into today’s Social Economy Fair.

In October 2017, five months after the inauguration of my Administration, I visited Heyground, a co-working space for startups also known as Korea’s social venture valley, in Seongsu-dong and unveiled a comprehensive plan to promote the social economy there. On top of this, the Framework Act on Small and Medium Enterprises and six other related acts were amended, which has helped significantly improve the business environment for social enterprises.    

The Government will further intensify these efforts in line with “region-based,” “private sector-led” and “government-backed” principles. 

First of all, the infrastructure needed to grow the social economy will be further expanded. 

This year, social economy growth support centers will be newly established in Wonju, Gwangju, Ulsan and Seoul, and a pilot social economy innovation town will be created in Gunsan and Changwon. By doing so, we will expand region-based social economy infrastructure.    

Financial support will also be expanded. Last year, government-backed financing for the social economy stood at 193.7 billion won, far surpassing the target of 100 billion. The size of planned government-backed financing this year is 323 billion won, a sharp 67 percent increase from last year.  

The Korea Social Value and Solidarity Foundation, newly launched in January this year, established the basis for social finance that’s led mainly by the private sector. In a bid to promote impact investing, which is made based on the estimated social impact created by businesses, a 500 billion-won impact fund will be formed by 2022. The funding for impact investing guarantees will also be expanded to 150 billion won by 2022.  
    
We will also endeavor to help social enterprises expand their market. Social enterprises will be given preferential considerations in government procurements through more opportunities for exclusive contracts and additional points in the evaluation process during bidding. To help social enterprises make further inroads into the public sector, the extent of product purchases from social enterprises will become part of public institutions’ performance evaluations. The Government will also expand such assistance as R&D and consulting for social enterprises, including social media business ventures that have high growth potential.    

Second, we will help the vulnerable find work through the social economy and identify a range of social economy models.  

We will help create 860 young adult-led startup teams with social enterprises and cooperatives playing a major part as well as 5,840 local government-led jobs for young adults this year. A comprehensive measure to nurture talented individuals for the social economy will be pushed ahead as planned, thereby reinforcing the foundation for human resources who will lead the sustainable development of the social economy.  

We will introduce a cyclical model for local economies that creates jobs in their regions and reinvests the resulting profits by utilizing local resources in conjunction with urban regeneration projects. We will also push for R&D to resolve social issues by gathering researchers, the general public, social economy-related organizations and local universities.   

However, government efforts alone cannot accomplish all of these things. 

Three legislative bills concerning the social economy have been pending in the National Assembly for a long time. I ask for the National Assembly’s cooperation and the swift passage of the bills. Since the policies are ultimately implemented in various regions, cooperation with local governments is also important. What matters most is voluntary participation by the private sector. Only when more of those with strong determination and passion join forces can the social economy grow even deeper roots. The Government will stand together and provide support.    

Business leaders who share social values, 

We don’t employ people to sell bread; we sell bread to employ people: this is a slogan of Rubicon Bakery, one of America’s most renowned social enterprises. 

In the social economy, “bread” is not only a food but also everyone’s dream at the same time. Rubicon Bakery’s slogan demonstrates perfectly how valuable it is to invest in dreams rather than profits, as well as in people rather than returns. 

No one should be deprived of hope. A society with big hopes is a warm and strong society.  

I hope all of you here will always continue your efforts to make society more caring. The Government will do all it can to ensure that your efforts will be rewarding.  

We can create a people-centered economy and a Republic of Korea where everyone prospers. Let’s create a society where people can dream and lead worthwhile lives.  

Thank you.