<h1>The Development of Korea’s Social Economy and the Role of Intermediary Organizations</h1>

 

Korea’s intermediary organizations in the social economy work closely with field enterprises to drive their growth and development. (Photo by Milly)

Korea’s social economy has long grown under the leadership of the central government.

With the enactment of the Social Enterprise Promotion Act (2007) and the Framework Act on Cooperatives (2012), the social economy was formally institutionalized.

More recently, the Act on the Fostering and Support of Village Enterprises was passed, further expanding its scope.

 

Today, the social economy is gaining attention not merely as a job creation policy, but as a key driver of sustainable regional development and a viable alternative for solving social problems.

 

The Shift Toward Local-Led Change and the Emergence of Intermediary Organizations

 

The center of gravity in Korea’s social economy is shifting—from the central government to local communities and the private sector.

Each region has begun to build its own “local social innovation ecosystem”, where local actors identify their own challenges and experiment with solutions.

 

However, it is difficult for social economy organizations to tackle all challenges on their own.

Barriers such as market entry, financing, and organizational capacity are inevitable.

This is where intermediary organizations come in.

 

What Are Intermediary Organizations?

 

Intermediary organizations connect and support various resources to help social economy organizations grow sustainably.

They provide comprehensive support—including education, consulting, financing, networking, and space—to social enterprises, cooperatives, village enterprises, self-sufficiency enterprises, and social ventures that aim to solve social issues.

 

By lowering administrative, financial, and network barriers, these organizations help the social economy become more interconnected and sustainable.

In essence, intermediary organizations serve as “facilitators that enable social economy actors to grow within an interconnected ecosystem.”

 

Public Intermediary Organizations — Building Institutional Foundations

 

Public intermediary organizations are established or commissioned by the central or local governments to strengthen the execution and institutional foundations of social economy policies.

 

A representative example is the Social Economy Support Centers operated by local governments.

They help translate public policy into practice and support local social economy organizations through networking, consulting, education, and space provision.

Their main role has been building systems and infrastructure while implementing government support programs at the field level.

  

Private Intermediary Organizations — Catalysts of Field Innovation

 

Private intermediary organizations work more closely with the field, testing and promoting social innovation in areas that public policy may not reach.

 

They support social enterprises from the startup stage to growth, providing social finance, investment, consulting, and networking opportunities.

With their flexibility and speed, they deliver field-oriented, customized support and create experimental models for innovation.

 

Recent Changes — A Period of Retrenchment and Restructuring

 

After years of active operation, intermediary organizations have recently entered a phase of major transition due to policy changes.

During the previous administration, government funding for social economy programs was significantly reduced, leading to the consolidation and downsizing of many intermediary organizations.

 

At that time, the government emphasized a shift toward a “market-driven, private-led ecosystem,” prioritizing autonomy over public support.

While this change presented opportunities for greater efficiency and independence, it also raised concerns about the isolation of field organizations and the weakening of the broader ecosystem.

 

Although the current administration has partially restored some programs, the loss of accumulated expertise and professional talent, as well as the disruption of local ecosystems, remain challenges.

 

The Future Direction of Intermediary Organizations

 

Going forward, intermediary organizations must evolve beyond being simple “support agencies.”

They should become platforms that bridge policy, market, and civil society.

 

👉Establishing Sustainable Financial Models

Intermediary organizations need to move away from dependence on public funding and develop self-sustaining models through social finance, impact investment, and corporate partnerships.

Some private intermediary organizations have even obtained certification as social enterprises to secure their own revenue models—an important step toward sustainability.

 

👉Strengthening Public–Private Collaboration and Governance

A cooperative governance structure combining the institutional stability of the public sector with the flexibility of the private sector is essential.

Such collaboration allows the entire ecosystem to co-design and co-implement effective strategies.

 

👉Building Regional Innovation Ecosystems

Beyond the Seoul–metropolitan concentration, each region should take the lead in developing its own social innovation ecosystem.

This shift will nurture local leaders and create authentic, place-based social economy networks.

 

Conclusion

 

Korea’s social economy has moved beyond its “growth stage” and entered a new phase of “stabilization and innovation.”

 

While public intermediary organizations have built the institutional foundations, private intermediary organizations have kept the ecosystem dynamic by connecting people and the field.

 

This is a time of transformation—and such transformation may well be the reason Korea continues to attract global attention in the realm of social innovation.