<h1>Why Cooperatives Matter in South Korea Today</h1>

 South Korea is often described as a “rapidly developed country.”

Compressed economic growth, digital transformation, a highly educated population, and strong state capacity are frequently used to characterize Korean society.

 

However, alongside this rapid development, South Korea now faces a range of complex social challenges: population aging, gaps in care services, regional decline, excessive concentration in the capital region, and the climate crisis. These issues have reached a point where they can no longer be effectively addressed by the market or the government alone. It is precisely at this moment that cooperatives and the social economy in South Korea are gaining renewed attention as important alternatives.

 

Drawing on the previously published interviews with Korean cooperative expert Lee Gi-dae, this article explores the context in which cooperatives have developed in South Korea and why they are being discussed today as a meaningful response to structural social challenges.

 

A commemorative gift received at a cooperative anniversary event last summer. (Photo by Milly)

A Social Economy Shaped by Government-Led Growth

 

As mentioned in earlier posts, one of the defining characteristics of South Korea’s social economy is its government-led development. A pivotal moment came in 2012, when the United Nations declared the International Year of Cooperatives. In the same year, South Korea enacted the Framework Act on Cooperatives, significantly easing the requirements for establishing cooperatives and creating an institutional foundation for diverse cooperative models to emerge.

 

Following this legislation, central and local governments actively supported the growth of cooperatives and social economy organizations through policy programs, education, consulting, and financial assistance. As a result, tens of thousands of cooperatives and social economy organizations were established in Korea within a relatively short period.

 

This process marked a clear achievement: it formally recognized cooperatives as legitimate actors in addressing social issues.

 

The Limitations of Rapid Expansion

 

At the same time, the rapid expansion of cooperatives revealed important limitations. Some organizations became highly dependent on government subsidies, and in many cases, their sustainability was challenged once public funding ended.

These experiences led to a growing awareness within Korea’s social economy ecosystem that quantitative growth alone is insufficient. Greater emphasis has since been placed on qualitative development and the creation of sustainable operational models.

 

Why Cooperatives Still Matter

 

Despite these challenges, the importance of cooperatives remains clear. Cooperatives are not primarily organizations that “solve social problems on behalf of others.” Rather, they create structures through which social problems can be addressed in sustainable ways.

 

In cooperatives, those directly affected—local residents, workers, and consumers—become active agents. Across areas such as care, energy, housing, food systems, and employment, cooperatives in South Korea have experimented with community-based models of self-reliance. Their principles of democratic governance and collective ownership connect economic activity with social value, moving beyond profit maximization alone.

 

Insights from a Practitioner on the Ground

 

These perspectives are clearly reflected in the recent interviews with Lee Gi-dae, a leading expert in Korea’s cooperative sector. He emphasizes that cooperatives create opportunities where people live and transform issues like care and aging from burdens into forms of shared participation—enabling communities to build resilience from within.

 

The interviews also highlight that cooperative sustainability depends not only on policy support, but equally on strong operational capacity at the organizational level, appropriate financial structures, and solidarity among cooperatives themselves.

 

Conclusion

 

South Korea’s cooperative model cannot be described as a complete or finalized solution. Many challenges remain, and trial and error continues. Nevertheless, the Korean experience—where government helped build the initial ecosystem and citizens and local actors continue to shape and operate it—offers valuable lessons that other countries may find worth considering.

 

👉Interviews on cooperatives in South Korea

😍 The Rise of K-Cooperatives: An Interview with Expert Ki-dae Lee (Part 1)

😎 How Do Cooperatives Respond to Social Challenges?: An Interview with Expert Ki-dae Lee (Part 2)