<h1>Measuring Social Value in Korea’s Social Economy (Part 1)</h1>

 Around the world, social economy organizations don’t simply pursue profit. Instead, they aim to create a positive impact on people, communities, and the environment. For instance, they provide jobs for marginalized groups like the elderly or people with disabilities, or run sustainable businesses that protect the environment. These are all common activities carried out by social economy organizations.

Discussions on how to measure the impact and value of social economy enterprises continue to evolve.(Photo by Milly) 

But can we actually see the positive impact they create?

Most social economy organizations say they strive to employ people, protect the environment, and improve communities. But in reality, explaining exactly who they impacted, how, and to what extent, is not so simple.

This is why in Korea, “impact measurement” has recently drawn attention. Korea’s social economy has largely developed under public sector leadership. As a result, many organizations have relied on public support, and critics have pointed this out. In response, the previous government began shifting its policies to provide differentiated support based on measurable impact. Naturally, this made impact measurement an unavoidable topic for social economy organizations in Korea.

Why is impact measurement important?

At first, I also thought: 

❓Why should companies doing good work have to prove it with numbers?

But as the number of social enterprises rapidly increased—and interest in “value-based consumption” grew—governments, investors, and consumers all began to ask a common question:

How much of the “social value” these companies claim to create is actually being realized?

✔Governments and policymakers want to know how much meaningful social value each enterprise is creating. Especially since Korea’s social economy has grown with public sector support, they naturally want to know what kind of return—social or otherwise—that investment has yielded.

✔Impact investors, who put actual money on the line, also want to see what kind of change and value their investment has produced in society.

✔Ordinary consumers and citizens—the ones making actual purchases—also benefit from impact measurement. Those who prioritize “value” when choosing what to buy are bound to be curious about whether the products they purchase truly make a difference.

While it may have been less of a priority during the early stages of the social economy, today, social economy organizations must provide objective evidence of the social value they’re creating if they want to maintain sustainable operations.

And this movement is not unique to Korea. Globally, there is a growing emphasis on ESG, sustainability, and social innovation. Alongside that comes increasing attention to how we can express “impact” through objective, measurable means. Many international organizations are actively researching ways to measure impact and developing better tools and frameworks for doing so.

⭐In the next post, I’ll introduce how social economy enterprises in Korea are currently measuring impact, including specific methods and examples.⭐

💗Read the continuation in Part 2

Measuring Social Value in Korea’s Social Economy (Part 2)