A study on youth job creating model based on entrepreneurship

Abstract

While youth unemployment rate in Korea reached its all-time high in history, the birthrate of businesses, which is the main driving force of job creation, is at a standstill. The unemployment rate for the youth population aged 15?29 reached its highest in 2016 at 9.8%, an increase of 1.8 %p from 8.0 % in 2010 while the business startup rate fell from 15.3% in 2010 to 14.6% in 2015. On the contrary, social economic organizations that pursue citizen-led job creation and autonomous regional welfare, including social enterprises and cooperative associations, are rapidly growing these days. In particular, cooperative associations based on the basic act on cooperative association enacted in 2011 show remarkable growth. The number of cooperative associations reached 10,640 in just five years after the act took effect. This paper examines problems of the government’s youth entrepreneurship support aimed at job creation. As an improvement plan, this study investigates job creating model that is based on the revitalization of entrepreneurship by the Youth Cooperative Association (YCA) and examines relevant policy issues. For this goal, this paper examines why the government’s support to for-profit businesses at the time of their foundation does not lead to job creation. This study also examines the current situation of the government’s support project for non-profit business establishment. We propose the potential of the YCA as an alternative model for the existing non-profit corporation that is in charge of social welfare service. We also suggest plans for supporting YCA. In particular, we investigate the government’s growth plan for the YCA, establishment of financial infrastructure, and policy issues for entrepreneurship education.