On 25th January 2021, I participated in the first OECD expert meeting on impact measurement for social and solidarity economy (SSE) organizations. At the meeting, I was honored to give a plenary keynote about how the Korean government initiated and implemented social impact measurement policies for social and solidarity economy organizations. I am also happy to share a summary of my keynote.
In South Korea, SSE organizations include social enterprises, cooperatives, community enterprises, self-sufficiency enterprises, and sometimes social ventures as well. The Korean government has been supporting these organizations with various policy initiatives, and now there are more than 22,000 SSE organizations in Korea.
As the number of SSE organizations increased, the Korean government began to develop and implement several social impact measurement tools to evaluate the social and economic value these organizations created. Here, I would like to introduce three government social impact measurement tools for SSE organizations.
First, the Ministry of Employment and Labor and Korea Social Enterprise Promotion Agency developed and launched the “Social Value Index” for social enterprises in 2017. Social enterprises can voluntarily participate in this initiative. And they receive extra managerial support if they are considered successful organizations that are creating a high level of economic and social impact.
Second, the Ministry of SMEs and Startups and Korea Technology Finance Corporation developed the “Social Venture Value Measurement Model” in 2019. The Ministry suggests that any social venture support organizations, including the government departments, impact investors, and accelerators, use this tool to evaluate social ventures’ growth, innovation, and social and economic impact.
Third, in 2020, the Financial Services Commission, and Korea Credit Guarantee Fund developed a web-based open platform called “Social Economy Enterprise Evaluation System” to evaluate the social and financial impact that social economy enterprises create. Social economy enterprises often receive a lower credit score from traditional credit rating agencies, which prevents them from receiving business loans. Therefore, the “Social Economy Enterprise Evaluation System” provides an alternative framework emphasizing the social impact that banks and other financial support organizations can use when providing loans for social economy enterprises.
Overall, it is meaningful that the Korean government has been developing and implementing several social impact measurement tools for various SSE organizations. It helps SSE organizations to evaluate their organizational impact and to receive extra financial and managerial benefits from the government.
However, as these initiatives are at an early stage, we are still learning about how these tools are actually used and how SSE organizations benefit from these policies.
If you are interested in learning more, I have a book chapter coming out this year. The title of the book chapter is “Classification of Social Impact Assessment Tools in South Korea (TBC)” in the book called “Creating and measuring social impact in modern society“. I am happy to share with you when it is out!