The aim of this paper was to understand the similarities and differences between social enterprise (SE) systems in Korea and Bangladesh in terms of the emergence, background, development, and current status of the SE's policies and support systems in these two countries. This study employs a conceptual qualitative analysis, and the data used in this study were obtained from multiple reliable literature reviews. The data were analyzed based on a text-by-text comparison of social enterprises in the two countries, and the results were revealed through written explanation. In Korea, the SE system emerged as social employment creation plan after the currency crisis in 1997. Later, in 2007, this movement turned into the “Social Enterprise Promotion Act.” Conversely, in Bangladesh, the SE system emerged as a result of NGOs’ activities to “alleviate poverty” and “facilitate job creation” after the War of Independence in 1971 in an informal socioeconomic conditions. There is no explicit legal form of SEs in Bangladesh. This study also suggests the nature and scope of SEs and the barriers to sustainability of SEs in both countries. The study also emphasized the foundations to develop relevant policies as well as clear regulations for the future sustainability of the SEs of these two countries.
Bibliographical noteFunding Information:
Financial support includes assistance with labor expenses, the tax system, and both direct and indirect economic support from the govern‐ ment. The amount of support is between 10 and 50 million won (about 10,000~50,000 $) a year. Labor expense support consists of support for both laborers and professionals. Minimum wage and a proportion of social insurance are provided to workers in SEs for up to five years. Professional workers are also supported with salaries to facilitate the initial management of SEs and to support their sustainability. Support for
Educational support consists of social entrepreneurship projects, social ventures, and academic programs that are aimed at training social entrepreneurs. It is being provided in the form of social entrepreneur development businesses, social ventures, and academy businesses for the purpose of social entrepreneur training. For example, the Social Entrepreneur Academy is a program created to support the sustainable growth of social entrepreneurs who demonstrate vision, innovative ideas, and business management ability (Cho et al., 2014). It is supported by the government and operated by universities and local centers.
The sustainability of SEs is a big issue in Korea because they heavily rely on government funding. After their initial five‐year financial support from the government, SEs struggle with financial management and often shut down. In total, 21.8% of SEs were shut down after government support ended (National Assembly Research Service, 2014). Although quantitative growth has been achieved, SEs have been struggling with sustainability, which is achieved through successful economic and social performance. The success of SEs in terms of quality and quantity can only be achieved through joint and associated endeavors by and between the central and local governments as well as business and civic groups.
surveyed 149 SEs in Bangladesh and found that they are relatively young—having operated for an average of six years—and that their found‐ ers were also young—being under 35 years old, on average. A fifth of Bangladeshi SEs was led by women—significantly higher than in main‐ stream business (5%). Women in SEs made up 41% of the full‐time equivalent workforce, more than double the rate in the general workforce. Bangladeshi SEs had an average of 22 full‐time equivalent staff and an average turnover of around £21,000 (Bangladeshi taka (BDT): 2,134,475). Most Bangladeshi SEs expected their ventures to grow and have wide‐ranging growth plans, particularly expanding into new geographic areas (76%), developing new products and services (61%), by attracting new customers and clients (82%) through investment in their teams (85%), and by attracting capital for expansion (74%). The highest proportion of SEs are in education sector (32%) and are mostly male‐led oriented (39%). These SEs seek to promote education and literacy as key objectives, even if they operate across other sectors and are followed by ser‐ vices (26%). Their business model is mainly supported by corporate social responsibility funding, crowd funding, and donations from different NGOs. Many SEs focus on employment creation as a key objective of their operations. Lack of technical skills (36%) was seen to be the biggest barrier to growth, followed by lack of access to debt finance (35%), lack of awareness regarding SE (30%), lack of cash flow (28%) constraints, difficulties in obtaining grant and funding (26%), and lack of access to support and advisory services (24%). Lack of understanding of SEs was seen as a significant barrier to growth, with a quarter of SEs feeling the constraint. Donations and grants were the most common sources of
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- legal framework
- social enterprise