Village Enterprises: The Local Roots of Social Innovation

 In recent years, one phrase has often been heard across Korea:

“The regions are disappearing.”

 

Population decline, concentration in the Seoul metropolitan area, lack of jobs, and the collapse of local communities have made this an urgent and unavoidable challenge.

To keep regions alive, new and practical solutions are needed.

 

Amid these challenges, village enterprises are drawing renewed attention.

A village enterprise is not just a small business — it is a grassroots movement for social innovation, where residents come together to solve local problems and create economic opportunities using their own resources.

 

Until recently, village enterprises in Korea had relatively weak institutional foundations, often relying on government grants or public competitions.

However, the atmosphere has started to change.

In July 2025, the Village Enterprise Promotion and Support Act was finally passed by the National Assembly, marking a turning point.

 

What Is a Village Enterprise?

 

A village enterprise is a business created and led by local residents, using local resources to generate income and employment while addressing community challenges.

 

While they pursue profit, their main purpose is not monetary gain but rather to solve local issues and improve residents’ quality of life.

 

For example, some transform unused spaces into community cafés, while others produce and sell goods made from locally grown agricultural products.

Through such efforts, they build a circular local economy that keeps resources within the community.

 

How Do Village Enterprises Drive Social Change?

 

In Korea, the broader field of the social economy includes social enterprises, cooperatives, village enterprises, self-support organizations, and social ventures.

Among them, village enterprises are the most deeply rooted in locality and citizen participation.

 

Their impact goes far beyond economic outcomes.

They help restore human relationships and rebuild social connections, touching the very essence of social innovation and community-based change.

 

When a village enterprise functions effectively, it can transform not only the local economy but also the social fabric of the region itself.

 

Policy Shift: The Village Enterprise Act and New Momentum

 

For years, village enterprises struggled due to limited legal and administrative support.

But in July 2025, the passage of the Village Enterprise Promotion and Support Act changed the outlook dramatically.

 

This new law provides a clear legal basis for nurturing and supporting village enterprises, and establishes a more systematic framework for administrative and financial assistance.

 

The Act is expected to become a policy foundation for tackling regional problems such as depopulation and local decline.

In particular, it opens the door for youth-led village enterprises in shrinking rural areas and for new models connected to energy transition, care services, local culture, and circular economies.

 

The Power of Sustainability Comes from People

 

Of course, the passage of the Act doesn’t automatically guarantee success.

The key question remains: “Who, why, and how do we work together?”

 

The sustainability of village enterprises does not depend on paperwork or subsidies — it depends on trust among people and the strength of relationships.

 

Real change begins not with grand policies,

but with small yet meaningful transformations in local communities.

 

👉Because the power to change a region always begins with its people.