Is Social Impact in Korea Fragmented?: The Structure of the Social and Solidarity Economy

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 What is the Social and Solidarity Economy?❓💬

 

Globally, terms like “social and solidarity economy” or “social impact” are used to describe a broad range of organizations working to solve social problems.

 

However, Korea is both similar and different. While organizations pursuing social purposes do exist, structurally they are divided into different types. From the outside, it may look like a single ecosystem, but in reality, it is segmented into multiple systems and institutional frameworks.

 

Differences in Scope Between Overseas and Korea🐣

 

In Europe and other regions, a wide range of organizations are included within the social and solidarity economy. These include cooperatives, mutual societies, social enterprises, non-profit organizations (NPOs), foundations, and self-help groups.

 

In other words, both formal and informal economic activities are included, and the focus is on the “social purpose” regardless of whether the organization is for-profit or non-profit.

 

However, Korea is structured differently. In Korea, the social and solidarity economy is generally divided into five types: social enterprises, cooperatives, village enterprises, self-sufficiency enterprises, and social ventures.

 

In addition, each type is governed by different ministries and legal frameworks. Social enterprises fall under the Ministry of Employment and Labor, cooperatives under the Ministry of Economy and Finance, village enterprises under the Ministry of the Interior and Safety, self-sufficiency enterprises under the Ministry of Health and Welfare, and social ventures under the Ministry of SMEs and Startups.

 

Because of this fragmentation, even organizations doing similar work may be subject to different regulations and support systems depending on their legal type, leading to confusion in the field.

 

Another key difference is that while non-profit organizations are considered a core part of the social and solidary economy in many countries, Korea tends to distinguish more clearly between “for-profit” and “non-profit” entities.

 

(As an exception, cooperatives are divided into “general cooperatives” and “social cooperatives,” with social cooperatives classified as non-profit organizations.)

 

As a result, from an external perspective, it may appear as a single “social impact” sector, but internally it is divided into for-profit and non-profit entities, and further segmented into multiple types with different systems and regulations.

 

The Framework Act on the Social and Solidarity Economy🐙

 

In Korea, because for-profit and non-profit sectors are already clearly separated, it may be difficult to fully integrate them into a single legal system.

 

However, if the five types of social and solidarity economy organizations (cooperatives, social enterprises, village enterprises, self-sufficiency enterprises, and social ventures) were unified under a single framework law, they could operate on a more stable institutional foundation.

 

This could also help expand networks, improve policy efficiency, and reduce administrative burdens in the field.

 

In particular, in October 2025, the Ministry of the Interior and Safety was designated as the lead ministry for social and solidarity economy policy, helping to reduce administrative fragmentation between ministries. In this context, if a framework law is enacted, it could integrate currently fragmented policies into a more cohesive ecosystem.

 

The Framework Act on the Social and Solidarity Economy (also referred to as the Social Economy Framework Act) was first proposed in 2016 but has not yet been passed. Over the past decade, various discussions, including public hearings and forums, have taken place, but the bill has repeatedly failed to pass the National Assembly.

 

Recently, it was reported that the bill had passed the Legislation and Judiciary Committee and might be submitted to the plenary session on April 23. However, it was ultimately not placed on the plenary agenda and failed to pass.

 

Conclusion🐧

 

In fact, the debate over how broadly to define the social and solidarity economy may not be the most important issue.

 

What matters more is how to build an ecosystem that can protect vulnerable groups, address social problems, and move society in a better direction in the face of multiple crises.

 

In Korea, the Framework Act on the Social and Solidarity Economy has not yet been enacted. However, if a legal foundation is eventually established and the fragmented structure becomes more integrated, Korea’s social and solidarity economy and broader social impact ecosystem have strong potential to develop into a dynamic hub for social innovation.


👉Read related articles

Why South Korea Still Doesn’t Have a Basic Law for the Social Economy

How Korea’s Social Economy Grew with Government Support

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