When the Budget Changes, the Field Changes: The Reality of South Korea’s Social Solidarity Economy (Part 1)

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 South Korea’s social solidarity economy has developed at a rapid pace. This was made possible largely because of public support. By formulating policies and investing public budgets, the current ecosystem of the social solidarity economy was able to take shape. However, while this growth environment may contribute to rapid advancement in the short term, over the long term, it has also created a reality where the sector can easily shrink or expand depending on policy shifts.

 

Recently, Gyeonggi Province announced plans to abolish its Social Innovation Economy Bureau—which had overseen social solidarity economy policies across the province—and drastically cut the related budget for the coming year. The frontline sector immediately pushed back. Grassroots stakeholder organizations in Gyeonggi issued joint statements, and nationwide network organizations released statements calling for a reconsideration. Even lawmakers from the ruling party issued a statement urging the immediate withdrawal of the plan to abolish the bureau and cut the budget. In response, Gyeonggi Province stepped in to contain the fallout, stating in an official written briefing that it would "strengthen the promotional framework for the social solidarity economy and review re-announcing the legislative notice if necessary."

 

This has been one of the most significant developments in South Korea’s social solidarity economy recently. Until just a short while ago, updates regarding Gyeonggi Province’s social solidarity economy were frequently shared in the group chats I am part of. Although the issue has not been completely resolved, it is in a state where we must closely watch how things unfold.

 

Watching this unfold, I felt that this is not merely a budgetary issue, but a window into the structural challenges of South Korea’s social solidarity economy. Even before this incident, I had witnessed multiple times how the policy and budgetary landscape of the social solidarity economy drastically expanded or completely contracted whenever political administrations changed.

 

What role has the public budget played in South Korea’s social solidarity economy?

 

In my view, South Korea’s social solidarity economy is still developing. To put it simply, it is in the process of building its own self-reliance. Since its inception was rooted in public support, self-reliance cannot emerge overnight; rather, the sector is gradually cultivating the ability to stand on its own feet.

 

The public budget has played a significant role in developing the ecosystem in South Korea:

 

👉Supporting the early-stage growth of social solidarity economy organizations

It supports the initial establishment and development of organizations, helping expand the overall number of social solidarity economy entities.

👉Providing tailored support in market access, education, consulting, finance, and networking

Each organization requires different types of assistance depending on its growth stage and circumstances. Tailored support—including sales channels, training, consulting, finance, and networking—is provided according to those specific needs.

👉Fostering intermediary support organizations and building the ecosystem

Intermediary support organizations understand the realities of both the field and the public sector, playing a vital role in connecting the two. Expanding these intermediary organizations facilitates greater communication and linkage, contributing to a healthier ecosystem.

👉Supporting experiments and projects addressing complex social problems beyond what the private or public sectors can solve alone

The significance of social solidarity economy organizations lies in solving social issues that neither the private market nor the public sector can resolve on their own. Public funding supports diverse experiments and initiatives where organizations pursue public missions through market-based approaches.

 

An Ecosystem Fluctuating with the Expansion and Contraction of Budgets

 

When budgets are cut or reduced, projects come to an end, imposing severe constraints on the activities of existing organizations. Conversely, when budgets increase, projects expand, and more people enter the social solidarity economy, allowing the ecosystem to grow.

 

The problem is that such an unstable structure directly affects not only frontline organizations, but also the job security of practitioners and their ability to accumulate professional expertise. Put simply, when a project that ran well through this year is terminated next year due to budget cuts, the staff members responsible for that project see their roles disappear and have no choice but to leave. Frontline workers are constantly forced to work in precarious environments.

 

Furthermore, an unstable budget climate that expands or shrinks depending on the political inclinations of local government heads makes long-term project design exceedingly difficult. No matter how positive an impact a project has on the ground or how meaningful it is, practitioners must redesign their initiatives from scratch every single year.

 

Ultimately, the core issue is not simply the fact that organizations receive public funds, but rather how stable and predictable that support is. Depending on predictability, public budget support can serve as wings for the social solidarity economy—or it can act as shackles that keep it from ever learning to walk on its own.

 

👀To be continued in Part 2

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