In recent years public concerns on social enterprises are being greatly increased, as a way of providing the socially disadvantaged with stable jobs and appropriate social services. Since the late 1990s, the Korean government has enforced diverse kinds of social programs, in order to offer jobs and social services to the socially disadvantaged, ranging from the self-help community programs to the Social Job Creating Initiative (SJCI). In particular, the Rho Moo-hyun Administration (2003-2007) inaugurated large-scale interdepartmental SJCIs to narrow income inequality between the people.
However, despite the large amount of the government's financial subsidies, the SJCI has failed to create stable and decent jobs for the socially disadvantaged. Thus, since 2007, the Korean government has moved social policy priority from the SJCI to the policy of supporting and fostering social enterprises, with the aim of providing the socially deprived with more stable and decent jobs. In July 2007 the Act to Support and Forster Social Enterprises was enforced to authenticate promising social enterprises and offer government subsides to certified social enterprises. In particular, the centre-right Lee Myung-bak Administration (2008-present) advocated the invigoration of social enterprises as one of its 100 national agendas that will be accomplished in its five-year term. Moreover, with the aggravating economy since the latter half of 2008, the importance of social enterprises as a source of job creation has been doubled.
But, despite the growing importance of social enterprises in providing the socially disadvantaged stable jobs, the government's efforts to support social enterprises are being confronted with diverse problems in terms of certifying, subsidizing, monitoring, and evaluating social enterprises. The administrative system to support social enterprises also reveals weak points, due to its diffusion and fragmentation. Above all things, the Korean government fails to explore relevant criteria to pick out beneficiaries of government subsidies and to evaluate the performance of benefited social enterprises. As a result, it becomes impossible to connect government subsides with performance evaluation, making the government's financial subsidies to social enterprise inefficient and ineffective. Furthermore, the government subsides offered without the performance evaluation of social enterprises may produce the serious inequity between competing social enterprises for government subsides.
Against these backdrops, this paper aims to explore the acceptable and relevant criteria for the selection of government subsides and the performance evaluation of subsidized social enterprises and to apply these criteria to the real world, taking into account the type and size of social enterprises. In detail, this paper has the following research aims:
- Establish relevant criteria to select the beneficiaries of government subsides;
- Work out appropriate criteria to undertake the performance evaluation of subsidised social enterprises;
- Debate the alternatives to apply the criteria of selection and performance evaluation to the real world, taking into account the type and size of social enterprises;
- And finally, examine a way to link performance evaluation on social enterprises with the process of selecting the beneficiaries of government subsides
Full paper: Kim_S-Y_2009_social_enterprise.pdf