On the 21st of this month, Kyemyung University’s Graduate School of Global Entrepreneurship announced a significant advancement in the realm of entrepreneurial support through the pioneering work of Jun-Yeol Kwon, head of The Company Cooperative Association. Kwon presented his master’s thesis entitled ‘An Initial Settlement Support Model for Startups: Focusing on the Business Employment Cooperative (CAE) Cases,’ shedding light on the urgent need for a shift in the current startup support paradigm.
In his thesis, Kwon critically examined the limitations of existing funding-centric startup support policies, which often fall short in fostering sustainable growth for new enterprises. He proposed the Business Employment Cooperative model as a viable alternative, drawing insights from the notable French CAE, Coopaname. Through a rigorous analysis, Kwon demonstrated the effectiveness of the CAE model and contrasted it with similar domestic initiatives, such as the F-Square Cooperative, previously known as the Daegu Cultural and Art Freelancers Cooperative.
Kwon emphasized the concerning statistics surrounding the survival rates of domestic startups, revealing that only 33.8% manage to thrive beyond five years, a figure that lags 11.6 percentage points behind the OECD average, placing Korea in a dismal 26th out of 28 OECD countries. Despite the government’s substantial investment of over 3.2 trillion won annually into 429 different startup support initiatives, he argued that the short-term and one-off nature of these policies fails to ensure lasting sustainability for new businesses.
The CAE model offers a dual legal status for both wage earners and entrepreneurs, providing comprehensive social insurance benefits and project linkage mechanisms to mitigate the risks of startup failure. Kwon articulated that this model transcends mere startup support by affording entrepreneurs a robust social safety net and a network foundation, thus fostering a sustainable ecosystem for business growth. He further advocated for the integration of legal frameworks, such as the Social Solidarity Economy Act, into the design of domestic systems to ensure the successful implementation of the CAE model.
He cited the remarkable achievement of Coopaname, where the three-year survival rate of startups reaches an impressive 80%, as a testament to the efficacy of the CAE model. Kwon asserted that this strategy could serve as a practical foundation for local entrepreneurs, freelancers, and those pursuing entrepreneurial ventures in Korea.
Professor Chang-Wan Kim, who supervised Kwon’s research at the Graduate School of Global Entrepreneurship, remarked on the significance of this study in presenting a cooperative-based system that can help early-stage entrepreneurs avoid isolation and grow steadily. He stressed the need for policymakers to consider such institutional alternatives in order to construct a more sustainable startup support framework.
Kwon’s thesis, crafted from his real-world experience in cooperative management, is expected to significantly influence the development of domestic startup policies and the establishment of social economy-based support models. This research not only reflects the necessity of adapting successful international practices to the local context but also highlights the vital role of cooperative structures in nurturing the next generation of entrepreneurs in Korea.
[관련기사] https://n.news.naver.com/mnews/article/088/0000967581?sid=102
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