[Gangnam Perspective] What It Takes for the Social and Solidarity Economy to Take Root

When you come out of Exit 11 of Seoul Station on the subway, a row of brick buildings, 50 to 60 years old and almost in ruins, stretches between the massive office towers. This is the Dongja-dong flophouse district, where each tiny room measures only about 3.3 to 5 square meters. Around 900 residents live there, in windowless rooms of 0.8 to 1.5 pyeong packed tightly along dark corridors.
Most of them are people with bad credit records, yet in 2011 they formed a financial cooperative. Their paid-in capital grew from 100 million won in the first year, 2014, to 400 million won in 2023. If a member pays into at least 20 accounts of 100,000 won each over six months, the cooperative lends up to 500,000 won, and additional loans are available up to 70 percent of the member’s own equity contribution.
What is striking is that the loan repayment rate is extremely high. It rose from 66.4 percent in 2012 to 93 percent in 2023.
The social and solidarity economy (SSE) is rapidly emerging as a key tool to address this kind of social polarization. In an era when only cutting-edge technology tends to be praised, new economic models are quietly taking shape out of the spotlight. A new trend is forming in which resources are invested in people and goods left behind by society to generate meaningful outcomes.
This is beginning to crack the long-dominant view that focused almost exclusively on advanced technology and large-scale capital. That is why the work of building value-creation systems through various social enterprises—such as social cooperatives and community enterprises—is drawing attention. In particular, the boom in revitalizing local economies and creating jobs continues, to the point that more than 10,000 community enterprises have been established. Even so, the social and solidarity economy still suffers from a vague identity and a lack of legal foundations, leaving its continuity heavily dependent on government support. Many of these enterprises are seen as having a long way to go in terms of sustainable management, as their business models are heavily concentrated in food-related services and they lack capital. This is why the need is growing for a legal basis that can support them in a systematic and organized way. The government aims to build a sustainable ecosystem through legislation. However, even after a law is enacted, it will not be easy to devise concrete measures to secure financial sustainability and to move beyond simple subsidies toward a self-reliant structure. In particular, public awareness among citizens and businesses must spread before any real impact can be felt, which makes it crucial to set clear goals for the next stage. More important still is whether the social and solidarity economy can establish an identity that truly fits its name. There is still no socially agreed, clear definition of what the SSE actually is. If its identity remains ambiguous, confusion will only deepen, and clear policy objectives will inevitably be hindered. From this perspective, attention is focusing on the moves of Minister of the Interior and Safety Yoon Ho-jung, who has been paying close attention to the social and solidarity economy since 2017. He now describes himself as an evangelist for the SSE and is personally taking the lead. During his time as a member of the National Assembly, he drew notice by introducing or co-sponsoring several bills related to the social and solidarity economy. Through his work in the Social Economy Forum within the National Assembly, he also argued that cooperatives, social enterprises, and community enterprises all need institutional support. His efforts are in line with the international trend: in 2023, the UN General Assembly unanimously adopted a resolution on promoting the social and solidarity economy, and 2025 has been designated as the second International Year of Cooperatives. Above all, the Framework Act on the Social and Solidarity Economy being pursued by the Ministry of the Interior and Safety must clearly define the identity of the SSE and set out concrete objectives. Places such as Trentino, Italy, and Quebec, Canada, where the social and solidarity economy is well developed, are known for enjoying high levels of income and social welfare. Analysts say the benefits of the SSE shone even more brightly during the global financial crisis and subsequent downturn. The current administration’s decision to make the social and solidarity economy a key national agenda item stems from these very effects. Back in 2009, then UN Secretary-General Ban Ki-moon stated, "Cooperatives have proven to be more resilient and more likely to survive in times of crisis than other forms of enterprise, because they are based on values." The self-sustaining capacity of the private sector is the core principle of the social and solidarity economy. The litmus test for policy success will be whether the government can design policies that bolster this self-reliance without undermining it.
ktitk@fnnews.com Reporter