[K Case Study] Why Has the Emergence of Self-Support Enterprises Become Slower and Less Frequent Since Around 2020?
For International Readers
Korea’s Self-Sufficiency Support Program is a work-linked welfare system for low-income people. Self-Support Enterprises are businesses developed through this program to promote work integration and self-sufficiency.
Author’s Note
The Self-Sufficiency Support Program, which has built work communities for people experiencing poverty, marked the beginning of Korea’s social and solidarity economy movement and has served as a driving force behind it.
Over the past twenty years, I have worked as a social worker, a startup support practitioner for Self-Support Enterprises, and at times as an entrepreneur myself. It has been a process of countless challenges and responses. Combining welfare and business is nowhere near as easy as it sounds — it is, in fact, close to impossible. Yet this nearly impossible task is what we have been doing for the past twenty years.
Over that time, we have developed the Self-Sufficiency Support Program into a highly sophisticated system. Have we, in turn, developed equally sophisticated ways to enable the emergence and growth of Self-Support Enterprises?
This essay begins with that question.
1. Raising the Issue
1.1. Where Has the Energy of the Early Self-Sufficiency Movement Gone?
Following the pilot Self-Sufficiency Support Program launched in 1996, the self-sufficiency support system was fully institutionalized with the National Basic Living Security Act in 2000. At the time, there was energy in the field to move beyond simple charitable protection and create self-sufficiency through work. Business experience was limited and management expertise was scarce, yet there was a strong passion to build workplaces and communities from scratch and take them into the market.
Over the following two decades, the program developed steadily. A nationwide system of Regional Self-Sufficiency Centers was established, and case management, participant management, education and training, operation of program groups, evaluation, and administrative systems all became far more sophisticated than before. This is clearly an achievement — but it raises a new question.
Is the ability to run a program group in a stable manner the same as the ability to build an enterprise that survives in the market? The capabilities required to manage participants, budgets, and public-sector work are different from those required to identify customers, set prices, improve quality, compete with rivals, and take responsibility for profit and loss. A good program group does not automatically become a good Self-Support Enterprise.
1.2. The Achievements and Path Dependence Created by Standardized Business Models
Since the mid-2000s, standardized business models in areas such as cleaning, home repair, care services, recycling, and food services have helped Regional Self-Sufficiency Centers across the country quickly establish a foundation for their businesses. By sharing proven models, centers reduced trial and error, and this played an important role in the program’s quantitative expansion. Yet successful models can sometimes become paths that make new choices harder to take.
As of the end of 2025, the sectoral distribution of Self-Support Enterprises was as follows: home repair accounted for 21.3 percent, cleaning 20.5 percent, delivery and driving 15.6 percent, restaurants 11.4 percent, and distribution and sales 11.0 percent — together, these five sectors accounted for roughly 79.8 percent. Self-Support Enterprises remain heavily concentrated in local service industries and labor-intensive sectors.
There is nothing inherently wrong with sectors such as cleaning, home repair, or care services. The real issue is how far businesses within these sectors have developed new customers and markets, built technology and brand value, and evolved into models capable of capturing higher value. Protected markets — public contracting and direct contracting among them — also provided an important foundation for survival in the early stages. But we can no longer avoid the question: have protected markets served as a stepping stone toward new markets, or have they become a structure that keeps Self-Support Enterprises confined within them?
1.3. The Year 2020 Was Not So Much the Beginning of Contraction as a Turning Point
The contraction of Self-Support Enterprises did not suddenly begin in 2020. According to available data on the social economy, the number of Self-Support Enterprises fell from 1,211 in 2018 to 1,176 in 2019, 1,062 in 2020, and 997 in 2021 — the decline had already begun in 2019, before the pandemic. Data released by the Ministry of Health and Welfare for the end of 2025 show 924 local-level Self-Support Enterprises, 49 metropolitan-level Self-Support Enterprises, and four national-level Self-Support Enterprises, for a total of 977. Differences in statistical criteria aside, it is difficult to say the Self-Support Enterprise ecosystem has entered a new period of clear quantitative growth during the 2020s.
The reusable-container washing and rental business, which has grown rapidly amid recent ESG and environmental trends, illustrates the deeper problem. According to industry sources, more than 100 reusable-container businesses are now operating nationwide, yet only around three are known to be Self-Support Enterprises capable of sustaining themselves as independent business entities. High-value-added areas such as app-based ordering, collection and logistics systems, B2B sales, and branding are occupied by private platform companies with capital and technology, while Self-Support Enterprises repeatedly end up subcontracted to perform only the labor-intensive washing process. Entering a new industry is encouraging in itself, but unless we also examine where Self-Support Enterprises sit within that industry’s value chain, the same failure will likely repeat itself.
We therefore need to look not only at what kind of business a Self-Support Enterprise runs, but at where it sits within that business’s value chain.
2. What the Numbers Reveal Is a Problem of Ecosystem Reproduction
2.1. How Should We Interpret the Decline in the Total Number of Enterprises?
With currently available public data, it is hard to track the annual number of newly established Self-Support Enterprises over an extended period using consistent criteria. We should therefore not directly equate a decline in the total number of enterprises with a decline in new startups: the total reflects business closures, revocations of designation, and transitions, not just new establishments.
Even so, the fact that the total has not increased over a long period is a meaningful signal. It means the combined result of enterprises being born and enterprises disappearing from the market has stalled, which raises real questions about the reproductive capacity of the Self-Support Enterprise ecosystem. Accordingly, the phrase “slower emergence” in this essay is not meant as a precise statistical claim about new-enterprise counts each year. It is a way of naming the decline around 2020 and the prolonged stagnation that has followed.
2.2. There Is a Clear Gap Between a Program Group and an Enterprise
A program group is an important vehicle for giving participants work opportunities and building their capacity for self-sufficiency. But the moment it becomes independent as a Self-Support Enterprise, everything changes. The enterprise must pay wages, cover taxes and social insurance, secure customers, and compete with other businesses. It must also take responsibility for the quality, price, and delivery of what it sells, and for its own profit and loss. This is precisely where a major gap opens up between running a program group well and turning it into an independent enterprise.
The 2023 survey of Self-Support Enterprises and their workers, along with related policy forums, pointed to the need for professional personnel support, sector-specific development funding and infrastructure, and expanded networks — in other words, a distinct kind of professional support is needed for the transition from program group to independent enterprise. We should not, then, explain the low rate of transition and growth simply as a lack of motivation among participants or centers. The more important question is who will bridge that gap, and with what expertise.
2.3. The Business Model Matters More Than the Industry
The fact that Self-Support Enterprises cluster in cleaning, home repair, care services, food services, and delivery is not, by itself, the problem. A cleaning business can innovate. A care enterprise can grow. A home-repair enterprise can acquire technology and build a brand into a high-value business. Even within the same cleaning industry, an enterprise’s value varies dramatically depending on whether it merely supplies labor, offers specialized cleaning with professional equipment, or provides integrated B2B facility management.
This becomes clearer when Self-Support Enterprises are compared with certified social enterprises. Many social enterprises also began in service sectors such as care, cleaning, and recycling, yet some have gone on to pivot their business models into IT, specialized manufacturing, and B2B services. Among Self-Support Enterprises, that kind of pivot remains rare. If enterprises starting from similar points end up on such different trajectories, the field needs to ask what, beyond the industry itself, is producing that gap.
The focus of Self-Support Enterprise development, then, should not be finding one more new industry to enter. It should be building better business models — including within existing industries — and securing stronger positions within value chains.
2.4. We Also Need to Examine the Growth of Self-Support Enterprises Absorbed into Private Franchise Systems
One trend has been quietly gaining ground in the field: Self-Support Enterprises becoming franchise outlets within established private systems such as convenience stores and restaurant chains.
This is not a trend to view only negatively. Relying on a franchisor’s manual for recipes, logistics, interior design, marketing, and store operations reduces the risk of early failure and gives participants facing multiple vulnerabilities a relatively stable income base. For practitioners simply trying to keep one more program group running, it can be a rational, even urgent, choice.
At the same time, franchise fees and the franchisor’s control over sales can limit an enterprise’s ability to accumulate its own earnings, invest in technology, or pursue scale-up. There is also a risk that participants remain store managers or providers of labor rather than developing into business owners in their own right. In the end, franchise-based models may be reasonable for participant protection and income stability, but they have clear limits when it comes to replacing a center’s role in developing participants into independent entrepreneurs. Even if this trend shows up in the statistics as an increase or a stable enterprise count, Regional Self-Sufficiency Centers, Metropolitan Self-Sufficiency Centers, and the Korea Development Institute for Self-Sufficiency and Welfare need to look closely at whether it actually reflects an accumulation of independent business capability.
None of this means franchise participation should be discouraged. It can instead be designed as a transitional stage rather than a final destination — for example, an enterprise could run a franchise for a set period to build stable sales and organizational experience, while mapping out from the start a path toward its own brand or an independent business model. That kind of roadmap takes real work to design, but it is worth the effort.
3. We Need to Go One Step Beyond Existing Diagnoses
Research on the Self-Sufficiency Support Program and Self-Support Enterprises has raised many important issues, which can broadly be grouped into three categories.
Institutional and welfare issues (Noh Dae-myung et al., 2011; 2016): the so-called welfare trap, in which welfare entitlements such as medical and housing benefits are cut off the moment someone starts a business, along with the absence of a safety net for re-entry if that business fails.
A welfare trap occurs when a person receiving benefits begins earning income, only to have those benefits reduced or cut by an amount equal to or greater than the increase — leaving them financially better off not working at all.
Organizational and administrative issues (Eom Gi-uk et al., 2013): organizational inertia created by evaluation indicators for Regional Self-Sufficiency Centers that weigh administrative measures — participant attendance, budget execution — more heavily than self-sufficiency outcomes.
Human capital issues (Korea Institute for Health and Social Affairs, 2017; 2022): the aging of program participants and the growing complexity of their physical and psychological vulnerabilities.
These diagnoses remain valid. But from the standpoint of someone trying to identify and develop Self-Support Enterprises, one more question needs asking: we have researched extensively why it is hard to create these enterprises, but have we built up an equally strong body of knowledge on how to actually make one emerge and grow despite those difficulties?
Reducing institutional barriers and actually building a business are not the same problem. Better institutions do not identify market opportunities on an enterprise’s behalf. More self-sufficiency funding does not automatically produce a good business model. Expanded direct contracting does not automatically produce capable managers. Identifying market opportunities, validating business models, spotting leaders in the field, securing initial customers, and running sales and operations all call for a different kind of expertise. Institutional approaches and entrepreneurial approaches are not substitutes for one another — institutions reduce risk and create opportunity, while business development is the process that turns that opportunity into products, customers, revenue, organizations, and jobs.
There are concrete institutional tasks that follow from this. Practical incentives for both centers and participants — budget allocation, evaluation indicators, compensation — should be designed around the transition and growth of Self-Support Enterprises. At the same time, there should be a re-entry safety net that lets participants return to a program group or try again after a failed venture, alongside measures that address the welfare trap directly. Reducing risk is not achieved by declaration; it becomes real only through mechanisms like these.
4. One Part of the Solution: Adding an Entrepreneurial Approach
The Ministry of Health and Welfare has already set out policy directions for Self-Support Enterprises, including expanding new business creation, developing profitable enterprises, and providing management and marketing expertise. The remaining question is how to translate those policy goals into enterprises that are actually born and grow in the field. This essay proposes four approaches.
4.1. A Self-Support Enterprise Is Both a Work Integration Social Enterprise and a Business Operating in the Market
One international concept closely related to Self-Support Enterprises is the Work Integration Social Enterprise (WISE). In Europe, organizations that realize the employment and social integration of people disadvantaged in the labor market — including persons with disabilities and the long-term unemployed — through business activity are treated as an important type of social enterprise. Self-Support Enterprises are not legally identical to European WISEs, but they are very similar in seeking to realize labor participation and self-sufficiency among vulnerable groups through business.
This distinction matters because a Self-Support Enterprise is, at once, an organization with a social welfare purpose and a business that has to sell products and services in the market. Emphasizing its social purpose does not erase its business nature, and emphasizing its business character does not mean abandoning its social purpose. A good Self-Support Enterprise has to do both well at the same time.
4.2. We Need to Ask Not Only What the Business Idea Is, But Who Will Lead It
In the field, business ideas are often chosen first and participants assigned to them afterward — a necessary approach in some cases. But building an enterprise calls for one more question: “Who will take responsibility for this business and lead it through to the end?”
Unexpected things happen constantly in the market. Customers leave. Costs rise. Employees resign. Competitors show up. Someone has to make decisions and take responsibility when they do, and there is no reason that person has to come only from among existing participants. Potential leaders among participants should be actively sought out, and where necessary, center staff, industry experts, and social-economy or business specialists could join the enterprise-formation process for a set period.
The programs run by the Korea Self-Sufficiency Training Institute — practical training for launching enterprises, program group management, competitiveness building — also need to evolve beyond individual capacity-building into project-based programs where real business candidates can validate and complete their models. Education alone, however, is not enough: potential leaders also need the chance to test what they have learned in the actual market, even on a small budget. Only when pilot business support runs alongside education can leaders emerge who have been tested in practice, not just in theory.
4.3. The Organizational Model Should Be Chosen to Fit the Business Model
The self-sufficiency field has traditionally placed great weight on community and democratic participation, and that spirit still matters. But a particular legal form should not become an end in itself. A cooperative is a business, and so is a corporation. The important question is not which form is more “social,” but which one best fits the business given its customer structure, capital needs, speed of decision-making, member participation, and how profits and responsibilities are shared.
In practice, there is a strong tendency to default to the cooperative form when designing a new enterprise, without fully weighing the alternatives — and there are understandable reasons for that. The one-person-one-vote principle was introduced to protect vulnerable members and prevent power from concentrating, and it fits naturally with the self-sufficiency movement’s core identity: participants as owners of their own business. But this structure comes with costs. In the early stages of a business, when rapid decisions and accountable management matter most, authority can end up dispersed and responsibility unclear, and cooperatives without an equity structure often have more limited ways of raising outside capital or loans.
A corporation, by contrast, concentrates management authority in one person or a small group, enabling faster decisions, and leaves the door open to equity investment — an advantage at certain stages of growth. But a corporation is no universal fix either: if ownership concentrates among a few shareholders, vulnerable participants’ voices can weaken, which cuts against the identity a Self-Support Enterprise is meant to protect.
Ultimately, no organizational form is inherently superior. The right one depends on how a given business raises capital, how fast it needs to decide, and how much member participation it requires. If meetings about organizational design have traditionally opened with “which form is more social,” that question needs to become “which form is right for this business” — and for centers and participants to answer it themselves, they need consulting and education that lets them weigh the real trade-offs. Otherwise, changing the question is just an empty slogan.
None of this puts cooperation and entrepreneurship at odds. Good cooperation is not collective decision-making without accountability — it is making decisions together while keeping everyone’s responsibility and authority clearly defined.
4.4. Regional Self-Sufficiency Centers Should Not Be Expected to Build Enterprises Alone
This is the most important point in this essay.
An accelerator, generally speaking, is an organization that selects early-stage startup teams and gives them intensive support over a set period — business model validation, funding connections, mentoring, help attracting follow-on investment, and access to sales channels. Private-sector accelerators are the familiar model; in the social economy, startup support programs run by the Korea Social Enterprise Promotion Agency and by startup centers under the Ministry of SMEs and Startups perform a similar role. What these organizations have in common is that they don’t just hand over a business idea and walk away — they have a dedicated function for validating both the people and the business model together, and carrying that validation into the next stage.
The self-sufficiency field does not yet have a clearly established version of that function. If we say an entrepreneurial approach is needed and then expect social workers at Regional Self-Sufficiency Centers to master market research, product development, sales, accounting, branding, and law all at once, that is not a realistic answer. What is needed is not more individual effort, but a redesigned support system — and it’s worth acknowledging plainly that the current workforce and budgets of Regional Self-Sufficiency Centers are not enough, on their own, to carry out that redesign. A clear division of roles is the way forward.
Regional Self-Sufficiency Centers are closest to local demand and to participants’ potential, and they are well placed to test businesses directly in the field — so they can focus on identifying people and opportunities and running initial experiments. Metropolitan Self-Sufficiency Centers can supply what individual regional centers struggle to secure alone: industry expertise, market research, joint branding, metropolitan-level sales channels, and specialized consulting. At the national level, the Korea Development Institute for Self-Sufficiency and Welfare can take on higher-order functions — researching industry-specific business models, building expert pools, training entrepreneurs and managers, forming strategic partnerships with private companies, developing validation tools, and spreading successful models. Its role is especially critical precisely because these are things individual regional or metropolitan centers cannot handle alone.
The structure is clear: when a regional center identifies potential, a metropolitan center and the Korea Development Institute for Self-Sufficiency and Welfare combine their expertise to help grow it into an enterprise. For this to be more than a declaration, though, a concrete collaboration process needs to be designed among the three levels — spelling out who takes over what, and when.
The work-integration enterprise accelerator this essay describes does not mean turning every Regional Self-Sufficiency Center into a specialized startup incubator. It means connecting the existing self-sufficiency support system’s functions — identifying, validating, and growing enterprises — in a more professional and systematic way.
5. Conclusion
Over the past twenty years, the self-sufficiency field has built a great deal: participant management systems, advanced case management, and countless program groups and local jobs.
Let us return to the question this essay opened with. We have developed highly sophisticated methods for operating the Self-Sufficiency Support Program over the past twenty years. Have we developed equally sophisticated methods for enabling Self-Support Enterprises to emerge and grow?
If we explain the stagnation of Self-Support Enterprises only through participants’ vulnerabilities or the limits of the institutional system, there isn’t much practitioners in the field can do differently. But facing this question head-on, rather than standing by as observers, can be the starting point for the next twenty years of self-sufficiency.
About the Author
Dr. Kim Seong-gi (Ph.D. in Social Welfare)
Director, The Care Biz Lab
Chairperson, SE Empower Social Cooperative
E-mail: skkwelfare@gmail.com
References
Noh Dae-myung et al. (2011). A Study on the Performance Evaluation and Institutional Improvement of the Self-Sufficiency Support Program. Ministry of Health and Welfare & Korea Institute for Health and Social Affairs.
Noh Dae-myung et al. (2016). Analysis of Self-Sufficiency Pathways and Measures to Improve Outcomes for Participants in the Self-Sufficiency Support Program. Korea Institute for Health and Social Affairs.
Eom Gi-uk et al. (2013). A Study on Improving the Evaluation System and Operational Efficiency of Regional Self-Sufficiency Centers. Research report commissioned by the Ministry of Health and Welfare.
Korea Institute for Health and Social Affairs (2017, 2022). Surveys and policy studies on participants in the Self-Sufficiency Work Program.
Korea Development Institute for Self-Sufficiency and Welfare (2021, 2023). Reports on the status of Self-Support Enterprises and related surveys.
Korea Development Institute for Self-Sufficiency and Welfare (2024). Korea Self-Sufficiency Training Institute education program guide.
Korea Development Institute for Self-Sufficiency and Welfare (2026). Status of Self-Support Enterprises by Service Type, as of December 31, 2025. Public Data Portal.
Ministry of Health and Welfare (2026). Self-Support Enterprise policy materials.
Korea Social Enterprise Promotion Agency. Materials on the status of social economy enterprises and support for startup and growth.
European Commission & B-WISE (2022). Materials related to Work Integration Social Enterprises (WISEs) in Europe.
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