South Korean social enterprises and their networks: On their organizational linkages at the interstice between the third, public, and corporate sectors

Abstract

Social enterprise and government interactions have become an increasingly prominent theme in the literature on social entrepreneurship, due in part to the pressures confronting the welfare state and the rise of precarious work. This analysis is motivated by the efforts of the government of South Korea to incubate social enterprises since 2007. The constant scaling of the South Korean government's monitored social enterprise certification scheme had led to the registration of approximately 3440 social enterprises as of May 2021. This study documents the interorganizational network behaviour of these enterprises relative to the public sector, corporate sector, and civil society and the social economy. A cluster analysis approach is utilized to analyse network data obtained from a self‐administered survey of 103 government‐certified social enterprises operating in South Korea. We find that a sizeable number of government‐certified social enterprises have diversified networks, as opposed to public sector‐centric networks, although such social enterprises are in the minority. This study references social innovation cluster theory to argue that the aforementioned scheme has attained a partial degree of success in facilitating the emergence of social enterprises with diversified networks.However, the majority remain quasi‐governmental implementers of government contracts and, generally, do not engage in networking.

Conceptualising a chameleon: social enterprise as a public provider

“…In contrast, following the Asian financial crisis in 1997, the Korean Government has actively nurtured the growth of social enterprise playing a crucial role in their development and trajectory, e.g. legislating the Social Enterprise Promotion Act, 2006 (Choi et al, 2020; JOPP 24,1 Claassen et al, 2023aClaassen et al, , 2023b. This served to institutionalise a legal framework regulating the social enterprise form and urged local authorities to foster social enterprise, regarding them as supplementary to social service provision, local community contribution, and job creation (Choi et al, 2020;Claassen et al, 2023b).…”

“…Papers exploring welfare reforms typically detail the marketising processes and expansion of public service delivery to the third sector (Hall et al, 2012;Heins and Bennett, 2016;Wollmann, 2018). The papers from Claassen et al (2023aClaassen et al ( , 2023b highlight the role played by the South Korean Government in stimulating the social economy, e.g. incubating, certifying and scaling social enterprise in support of welfare delivery.…”

“…Crucially, states and public policy play a key role in creating the conditions social enterprise emerge in and shape their development (Claassen et al , 2023a; Defourny and Nyssens, 2010b). For example, the US tradition demonstrates the importance of public support and funding as illustrated by the marketisation of the non-profit sector in the 1980s (Defourny and Nyssens, 2010b; Eikenberry and Kluver, 2004).…”

How social enterprise executives perceive their relationship with the government in South Korea: Insights from a Q‐methodological study

“…Focus on failure to promote networking and the growth of interorganizational networks (e.g., lack of effort(s) to promote social innovation clusters/networks (see Claassen et al, 2023;Tanimoto & Doi, 2007) or linkages with existing organizations within their sector and/or industry (Wiewel and Hunter, 1985).…”

“…The relationship between the public sector and GCSEs is therefore not completely hierarchical and GCSEs enjoy substantial autonomy. However, this autonomy does not preclude the potential hazard of these organizations being rendered coopted quasi‐governmental organizations (see Bidet, 2012; Teasdale et al, 2022), and discontent has been documented (Claassen et al, 2023).…”