At the Boao Forum for Asia held in China, SK Group Chairman Chey Tae-won stressed the importance of knowledge sharing on social enterprises with Chinese partners. Only recently, the company turned its maintenance, repair and operations business into a social business named Happynarae Co., which is now Korea’s largest social enterprise.
The initiative was triggered by growing criticism on Korea’s conglomerate friendly environment. The government introduced a co-prosperity policy between large and small businesses as conglomerates were criticized for not sharing the fruit of growth with small and medium sized firms, causing them to fail in the Korean market. The government therefore ordered conglomerates to address economic polarization and support the country’s social development.
In order to support this trend towards social entrepreneurship, the Korean government even introduced the Social Enterprise Promotion Act in 2007 with the purpose “to contribute to the integration of society as well as to the enhancement of the quality of the people’s life thereof, by means of expanding social services, which are not sufficiently provided in society, and creating jobs”. The government has allocated a budget of 176 billion won for 2012 to promote, support, and raise the competitiveness of social enterprises. They require this financial support as they often struggle to generate viable profits due to rather social than revenue driven business models.
SK’s Happynarae is by far not Korea’s first social enterprise. According to the Korea Social Enterprise Promotion Agency, the SK Group alone already launched 23 successful social enterprises.
During a breakfast meeting with approximately 40 Chinese politicians, business people, government officials and academics, the SK Chairman spoke about the company’s vast experiences in supporting the launch and growth of those social enterprises. He considers them a “significant alternative to resolve social problems accompanying rapid economic development and achieving sustainable development.”