Social enterprises rise as alternative to create jobs

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Social enterprises rise as alternative to create jobs

Around 1:30 p.m. on March 14 at the banner manufacturing company Noran Deulpan, 36-year-old Lee Beom-min, who can’t use his right arm properly due to a physical disability and has a speech impediment, is trying to feed fabric into an industrial printer to print out the design for an advertisement banner for a traditional market.

“It takes a while for people like Beom-min to learn the job, but his skills have improved a lot,” Shin Bong-jun, manager of the company said.

“No one in the office sees him as a disabled person who should be pitied but as a man in charge of equipment and material management. He gets paid fairly for what he does here, and we feel very happy for him.”

Lee has had difficulty getting a job in the past, but he has spent months at Noran Deulpan, a social enterprise that was established with the aim of providing decent jobs to the socially disadvantaged.

Since former human rights attorney Park Won-soon became mayor of Seoul in 2011, he has emphasized fostering social enterprises and cooperatives as a way of creating more jobs for retired seniors, the disabled and a large number of long-term unemployed people.

Park visited several cities in Europe including Barcelona, Paris and Bologna, Italy where social enterprises and cooperatives have been successfully developed and later said establishing such businesses should be encouraged and supported by the Seoul city government.

“The city government will try to create more young social entrepreneurs and also must be able to help them cooperate with the experienced senior workers,” Park said.

About 15 minutes later, the eight-meter-long (26-foot) banner was finished printing, showing information about the market.

“Most of our orders come from local governments and their related organizations,” Shin said.

“The busiest time for us is spring, when many local governments’ promote their annual projects and several elections, big and small, take place. We produce about 5,500-6,000 banners a month during the period.”

The company is located in a four-story building along a hillside road in Jangwi-dong, northern Seoul, and three or four workers bustled around in their approximately 60-pyeong (2,130-square-foot) office, producing banners under Shin’s direction.

The birth of Noran Deulpan is a bit different from other typical enterprises.

It opened as an evening school for disabled people in a bid to provide higher education so they can get better jobs after graduation.

About a dozen disabled people graduate from the Noran Deulpan evening school per year, but it was almost impossible for the graduates to find a decent job.

In 2006, Yang Hyun-jun, who managed the evening school and is the current CEO of the enterprise, decided to establish a firm that can provide job opportunities for the disabled while also operating as an academic institution including a job training program.

“Our goal is to have about 200 workers,” Yang, CEO of the Noran Deulpan, said. “But we expect the local government to introduce more business partners because it is very hard to expand our business in the market for an enterprise like us.”

In 2008, the Noran Deulpan was designated a social enterprise by the Ministry of Employment and Labor and has been operating as a banner manufacturer with 17 workers, including 11 disabled people.

It generated about 500 million won ($447,000) in revenue last year.

Under the regulation, these enterprises must reinvest 30 percent of their revenue into their businesses in order to accomplish such social goals.

Social enterprises first appeared in advanced countries such as the United States and United Kingdom in the 1970s. In the U.K., there are about 55,000 social enterprises.

In Korea, the Labor Ministry actively began fostering social enterprises in June 2007, but local governments were given the authority to designate companies as social enterprises in 2010.

Once a company is designated as a social enterprise the government supports it by buying their goods for the first five years of the company’s life.

As of 2007, only 1,400 socially disadvantaged people were working in social enterprises, but the number increased to 11,400 as of 2012 as more and more local governments are helping entrepreneurs in establishing social enterprises.

There are about 801 social enterprises in the country now and 183 of them are in Seoul. About 50 of them have been incubated by the Seongbuk District Office, northern Seoul, according to the Korea Social Enterprise Promotion Agency.

Noran Deulpan has been supported by Seongbuk District Office in northern Seoul until 2011 and successfully survived as a competitive enterprise in producing banners.

The Seongbuk office is the first local government in the country to volunteer to put into practice the ordinance to purchase goods being produced from social enterprises.

Since the ordinance was established in July of last year, the Seongbuk office has purchased 2 billion won worth of goods produced from social enterprises every year.

“The reason we have decided to purchase social enterprises’ goods for the past two years is to provide financial stability that could make it possible for them to establish a long-term production plan for their goods,” Um Jong-seob, director of the social economy division of the Seongbuk District Office told the Korea JoongAng Daily.

“The key to success in creating more social enterprises is to provide an environment where they can grow as a competitive company.”

Later in the same afternoon at an apartment complex in Gileum-dong, northern Seoul, a 60-year-old parcel service delivery man Kim Yoon-gil carried a cart containing about 30 packages like a box of computer printers and hanwoo, or Korean beef, ordered via the Internet.

He is already a familiar face among the apartment complex residents.

“I’m much older than most of the parcel delivery guys from private transport corporations. They’re usually in their 20s to 40s,” Kim told the Korea JoongAng Daily.

“Some residents might have thought it is odd that an old man like me is doing this job, but they don’t see me that way anymore and even feel I’m safer than younger delivery men. I don’t feel tired at all, and I’m very happy that I have work to do every day.”

Kim had a stroke last year, but recovered and began working from January for the social enterprise “Building Livable Village,” a parcel delivery service.

In February last year, Lee Kang-il, CEO, was able to secure 300 parcels from Korea Express, which later merged with CJ in January and re-established as CJ-Korea Express.

The parcel transport giant agreed to hand over portions of their coverage area in Gileum-dong as part of its corporate social contribution to create more jobs for the elderly.

The enterprise currently has 14 delivery men, and they all are older than 60. The oldest worker in the enterprise is an 82-year-old man. The parcel delivery men receive about 450,000 won per month for working about three to four hours a day delivering on average about 40 to 50 parcels.

“CJ-Korea Express is very satisfied with our workers as they handle parcels more carefully and responsibly than younger delivery men,” Lee said.

“They recently asked us to handle more parcels. We think we can handle up to 1,300 parcels a day by the end of the year and also increase the number of workers to 24.”

Among the 25 local district offices in Seoul, Seongbuk District has been positively supporting these social enterprises.

In December 2011, it opened the Social Enterprise Hub Center in Jongam-dong, central Seoul, to help those social entrepreneurs develop their business network.

They provided free business consulting for entrepreneurs who are interested in establishing a social enterprise and also arranged a series of meetings with existing entrepreneurs.

In July and December last year, the Seongbuk Office held an exhibition with those 50 social enterprises as well as 20 other related organizations and corporations including the Social Solidarity Bank, which signed an MOU to provide low-interest loan programs for those social entrepreneurs, to give them a chance to advertise the goods being produced from social enterprises.

Many social enterprises including the Noran Deulpan and New Senior Life, a wedding accessory company, participated in the event.

Dongjak District Office in southwestern Seoul has followed suit in fostering social enterprises.

In August last year, it opened a market complex where the district’s 15 social enterprises can exhibit and sell their goods in its employment research and development center building in Sadang-dong, southern Seoul.

It also decided to purchase 790 million won worth of goods produced by social enterprises.

“About 60 percent of workers in social enterprises are socially disadvantaged,” said Kim Jae-gu, commissioner of the Korea Social Enterprise Promotion Agency.

“It is hard for those enterprises to develop competitiveness in the industry like other private corporations. So the government and its related agencies must make a strong effort to attract private corporations’ social contributions that can share their business skills and strategies as well as their network.”

By Kwon Sang-soo [sakwon80@joongang.co.kr]

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