United Nations Public Service Awards Case Studies

Young people had great difficulties finding jobs in the global economic crisis
In 2008, the unemployment rate of Korea stood at 3.2%; 7.0% for youth in their 20s to 30s, which is the lowest among all generations except teenagers. Since 2009 when a global economic crisis hit the world and the unemployment rate began to rise sharply, youth unemployment issues became further aggravated, with their unemployment rate stands at 7.9%.
Youth unemployment becoming permanent and weakening labor morale
In particular, the highly-educated background has structurally increased idle manpower, and enterprises increasingly prefer temporary positions to permanent positions and choose to hire people with experience via occasional recruitment.
These changes in the job market posed a risk of youth unemployment becoming permanent, which discouraged young people from seeking jobs and being willing to participate in productive activities. The non-economically active population of youth is also ever growing, which includes those who given up job hunting.
The youth unemployment issue can undermine the nation’s growth potential beyond the individual level, sparking different kinds of social insecurities. It’s emerging as one of Korea’s most serious problems.
Programs to support youth in founding businesses as part of the solution to their unemployment are required
As part of its effort to overcome this insecure social atmosphere, Seoul City launched the “Youth’s Business 1000” project in 2009 to provide new channels for young Koreans to find jobs. In this program, the city selected 1,000 young people with brilliant ideas for new business opportunities and provided them with funds and spaces for founding a business, as well as a other support, including training, consulting and marketing services, under the flag of creating a groundbreaking number of quality jobs for youth.

What is the initiative about? (the solution)
Create 1,406 companies led by youth and expand jobs for young people including 11,221 positions The ‘Youth’s Business 1000,’ which has selected 1,000 young people among want-to-be business founders with brilliant ideas and passion for new business opportunities and supported them to grow into young CEOs, has paved the way for young people who wish to launch a new business but could not afford to. The selected youth can use offices and the equipment in the Business Incubator Center free of charge and receive a range of support, including business funds, training, and consultation. Driven by these full-fledged government supports, the program has obtained remarkable achievements in creating jobs for youth for the last 3 years since it’s launch. As of October, 2011, the program had developed and trained a total of 2,651 young business professionals and introduced 1,406 new youth enterprises, which have recorded overall sales of ₩147.9 billion. In particular, it is definitely noteworthy that the youth enterprises introduced by the ‘Youth Business 1000’ program have employed 11,221 people during the last 3-year period. Promote the reliability of administrative tasks via thorough post-measures including PR and marketing support In July 2011, Seoul City introduced a temporary office space for students who completed business courses provided in the program, and named it the ‘Youth’s Business Plus Center.’ The space was designed to provide an office environment for future youth business professionals who lack sufficient funds after graduating from the Business Incubator Center. The space also serves as a bridge for cooperation and development of sales routes between graduates who are already running businesses. On top of this, Seoul City introduced an off-line store connected to its on-line shopping mall called, ‘Dreaming Youth Shop,’ to offer products from the youth enterprises. However these only have marginal sales due to poor awareness of their brands, despite their creativity. Seoul City has also been helping youth enterprises to participate in on and offshore exhibitions, as well as making PR materials. As a result of Seoul City’s continuous three-year support for founding businesses and preparing reliable foundations, the ‘Youth’s Business 1000’ program has earned the trust of citizens as a gateway for the youth to start a business; currently there is an excess of applicants. A social environment to ensure self-realization for the youth One of the most significant effects of the ‘Youth’s Business 1000’ program is a social atmosphere that respects and supports the ideas of young people. The program has highly appreciated the youth’s ingenious ideas and helped the young people commercialize their ideas, which has helped them relieve their senses of helplessness and encouraged the growth of courage and self-confidence, and thus this program has aided not only to decrease youth unemployment, but empower these individuals as well.

Who proposed the solution, who implemented it and who were the stakeholders?
The ‘Youth’s Business 1000’ program finds its origin in the business curator program, ‘Youth’s Business Campaign SOUL (Smart Opportunity for Underemployed Labor)’ which was proposed early in 2009 by Kim Taegi, a professor in the Economics Department at Dankook University. Arguing that Korean society should pay attention to business founding activities as a breakthrough in the economic recession and unemployment crisis, Mr. Kim emphasized the importance of supporting the youth who are competent, but do not have opportunities to exert their abilities, and enable them to become leaders of Korean industries and economy. The campaign focused on creating jobs for the youth by bolstering their potential, ingenuity and fighting spirit and spreading these mandates among the citizens, eventually helping revitalize the economy of Seoul. Professor Kim has also proposed a specific method of running the campaign; invited the citizens to a business planning contest, selected a certain number of winners, and provided them with funds for preparing a business, as well as the necessary facilities. Seoul City immediately accepted his proposals and started to support business starting space and capital, by planning the ‘Youth’s Business 1000’ project where 1,000 teams of young business founders were selected, in June 2009. With a strong will, Seoul City reshuffled the structure of the Business Incubator Center to pave the way for a youth business supporting system.

Describe how and when the initiative was implemented by answering these questions
a. What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The ‘Youth’s Business 1000’ program started in June 2009, under the flag of providing full-fledged support to young future business founders, so that they could display their potential and become leaders in the Korean economy through continuous R&D activities. The first strategy of the program is to provide all types of supports for the young business professionals to build an independent foundation for business. Seoul City has provided ‘Youth Business Curator Centers,’ areas both north and south of the Han River, consisting of several 10㎡ size offices and equipment for each young future CEO for one year. The city also provided business launching funds of ₩700,000 – ₩1,000,000 depending on the rating of each business plan as well as low-interest loans for business founders with insufficient collateral, to help them get started. The second strategy focuses on minimizing the risk of failure through business training and consulting services. The Youth Business Incubator Center made use of external specialists in each business type and mandatory basic training courses on starting a business, while also providing specific consulting services dealing with each business matter via professional consultants in legal, accounting, tax, and other service areas. The last strategy is about expanding the infrastructure for business founding by connecting the support of government agencies with relevant communities in the private sector. This year is it’s the program’s 3rd anniversary, and there is a movement in the ‘Youth’s Business 1000’ program to establish cooperative networks between the program graduate enterprises. Korea Co-work Association, established in 2010, has been planning joint projects and has provided business start-up networking opportunities between the Youth Business Incubator Center graduate companies. Dream Biz Forum, despite being a private community, has continuously contributed to the spread of business founding spirit as part of their efforts to support junior business founders. For example they held a session on investment attraction. These youth business groups are voluntarily organizing associations to participate in research activities on co-survival and to return their gains to society, which is creating a mood for expanding the bases for business founded by the youth.

b. What were the key development and implementation steps and the chronology? No more than 500 words
The majority of the previous business incubating policies of Seoul City focused on older generations, while related programs for young people, if any, were temporary and only focused on university students. Introduction and operation of Youth Business Incubator Center (in 2009) For the first time within local governments, Seoul City provided a groundbreaking plan which covers the entire set of procedures for founding a business for young people in their 20s and 30s, and invested a huge budget over ₩19 billion, each year in related programs. The city has introduced ‘Youth Business Curator Centers,’ for areas both north and south of the Han River, which can accommodate up to 1,000 people each, as well as a task force responsible for supporting start-up companies in the Seoul Business Agency (SBA), in specific management and system operating tasks. Introduction and operation of off-line Dreaming Youth Shop (in April, 2011) After two years of operation, the city found that most Youth Business Incubator Center graduates manage to establish their own businesses after completing the one-year customized program, but later on, begin showing a sluggish pace in growing their businesses for a couple of reasons including difficulties opening up markets. To assist with this issue, Seoul City opened ‘Dreaming Youth Shop’ in downtown Seoul, a store for displaying and selling the products of the Center graduate enterprises to help the start-ups find reliable sales routes. With the trustful brand, “Seoul,” products that couldn’t attract the attention of consumers before, are now being displayed in the ‘Dreaming Youth Shop” and have reincarnated themselves as bestsellers, as many of these start-ups have enjoyed a large increase in sales. As of October 2011, the shop registered sales of ₩2,360 million for 200 items from 64 different companies. Youth’s Business Plus Center (in July 2011) In July 2011, the city opened the ‘Youth’s Business Plus Center’ to commemorate the graduates of the Youth Business Incubator Center. This center provides a drastically larger space and various utilities for 200 start-up businesses selected among graduates for their higher growth potential. As a result, as of October 2011, the center recorded sales of ₩2.8 billion within three months after it’s opening, as well as the employment of 89 people. Opening of on-line Dreaming Youth Shop (in October 2011) Driven by the success of off-line ‘Dreaming Youth Shop,’ Seoul City introduced the shop’s on-line version to allow the customers to conveniently buy the products of the youth business groups, without visiting the off-line store. With this on-line store, the city could also offer young enterprises’ products that couldn’t make their way to the off-line shop, providing a reliable sales channel for young CEOs who were suffering sales difficulties of their products due to poor marketing.

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
Young generations’ groundless distrust of government agencies – Eliminate this through continuous and systematic supports and constant achievements The Korean government has made their own efforts to boost the employment of young people, including the 2008 extension of the temporary law, ‘Special Act on Promotion of Youth Employment,’ for defining a lower limit of the number of young people hired in public sector, but such an effort failed to relieve the problem, instead increasing distrust of government policies among the youth. As such, the Seoul citizens couldn’t help, but doubt whether the ‘Youth Business 1000’ project could run soundly as planned in the initial stages of the program. Despite the doubt, the program produced about 600 successful graduates annually, for the last 3 years, and helped create a plethora of new jobs, which has turned many people’s suspicions to confidence due to the project. In addition, the successful stories of these young enterprises are serving as good role models for future business founders. Possible moral laxity among the youth – Resolve this via thorough management and supervision To prevent the young business dreamers from becoming morally lax due to the full support given by the city, such as funds for starting a business, Seoul City evaluated the performance of these young enterprises with the help of external agencies. The city adjusted the rating of each start-up business based on the results of the evaluation, and sometimes decided not to provide the funds or gave an order of dismissal for those with poor ratings.

d. What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
Financial support – Secure independent budgets for youth business group Seoul City has secured funds for the ‘Youth’s Business 1000’ program by tying together the existing programs for youth employment, including business incubation support, job creation for vulnerable members of the society, etc. In addition, the city has utilized city-owned idle spaces as offices for the young entrepreneurs to start businesses. For example, the Gangbuk Youth Business Incubator Center has been prepared by remodeling the former Mapo-gu Office building, and the Gangnam Youth Business Incubator Center, by renting unsold stores in the logistics complex in the southeast of Songpa-gu which was built by SH Corporation, both of which minimize the cost of providing space for business start-ups. The city also enjoyed a secondary effect that revitalized the commercial zones around these centers; each accommodated 500 young business start-ups. Technological and human resources – Make use of the help of affiliated organizations with much know-how for supporting small and medium enterprises Seoul Business Agency has run business incubation and education programs for over 10 years. This policy made use of this know-how held by this affiliated organization, the city could develop youth business founding monitoring programs, effectively responding to diverse needs in each business type and the level of each young future CEO. Such monitoring programs are not temporary or fragmented, but phased education courses organically combining ‘business start-up mentoring’, ‘customized teaching’, ‘business start-up coaching’, and ‘business consulting’. In addition, the city introduced a Youth Business Incubation Support Team within the headquarters of the Seoul Business Agency to provide a more methodic environment for supporting young future CEOs.

Is the initiative sustainable and transferable?
Financial aspect – Need to secure a reliable source of revenue To successfully lead a program for supporting the youth founding a business, the government must invest a significant budget amount in a continuous fashion. As such, they must approach the youth unemployment issue as a social problem. Specifically, the government needs a strategy to secure a reliable source of revenue, such as an active budget plan for creating jobs for the youth. Seoul City has successfully reduced the investment volume by aggressively making use of idle spaces around the city and expert pools at its affiliated organizations, and is planning to further curtail the budget by means of donations from retirees who wish to help talented people. Economic aspect – Boost the economy by creating more jobs The ‘Youth’s Business 1000’ project was designed to support founding a business. Additional fiscal payments will boost the local economy and increase the production and sales thanks to the establishment of new companies and growth of industries, and this will lead to more recruitment, which in turn, revs up the national economy. Social aspect – Attracting more attention as an alternative solution for youth unemployment The program requires a large volume of financial support, and consequently, brings together members of Korean society in recognizing the issue of youth unemployment. We should note that Seoul City was able to successfully promote the ‘Youth’s Business 1000’ program mainly because the central and local governments, NGOs, and citizens all were brought to a consensus that the youth unemployment issue was a critical social problem to be addressed. Benchmarking – Benchmarking and business founding activities boosted by the central and local governments In March 2010, the ‘Youth’s Business 1000’ program was selected as a ‘Good Local Government Policy Initiative’ for creating jobs at the National Employment Strategy Meeting held in Cheongwadae. As of now, the SMB Administration benchmarked the project to provide business start-up space, funds, education and coaching service for future CEOs under 39 years of age around the country. This is especially true for the Busan and Ulsan governments who are using the exact same models in almost all areas, with an exception in the volume of financial support. In March 2010, Yim Taehee, the then Minister of Employment and Labor (MEL), who had listened to difficulties suffered by young Koreans at the Youth Business Incubator Center, introduced an intern program where any young person who wish to start a business could apprentice under an experts in their specific business area. During the 6-month internship period, MEL launched a business start-up supporting program in April, with the Ministry paying part of the employment subsidies and internship wage to the educating enterprises. Furthermore, representatives of Tongkwan City in China visited the Youth Business Incubator Center in November 2010, to learn more about the program.

What are the impact of your initiative and the lessons learned?
Inspire labor morale in the young The ‘Youth’s Business 1000’ project has drastically changed Seoul City’s original approach to job creation policy. The original policy was focused on older generations and common business types predominantly including the service industry rather than technology or knowledge based businesses. The Business Incubator Center has done nothing, but provide business space for 100 young enterprises with a history of less than 2 years. The group of youth who were preparing to start a business were merely disregarded or could not get a loan due to their insufficient collateral. However, the Youth’s Business 1000’ project has provided young future CEOs with a more reliable environment for preparing for a business; even people with bad credit could make a comeback under the protection of related government policies. With the face of youth unemployment becoming permanent, the program served as a refreshing stimulant to return the will and courage to the youth, who had been losing even the desire to work, overwhelmed by a sense of defeat and despair. A boom in foundation of a business spread across Korean society The Youth’s Business 1000 Program has also contributed to raising a boom in the business foundation across Korean society. Not only have the SME Administration and many local governments benchmarked the program, but the ruling party’s Policy Committee and related ministries jointly named a new plan, ‘Korea, a Promising Nation: Solutions on promoting the youth’s business founding activities,’ in September 2011. The plan is about introducing political and environmental conditions favorable for building a business founding environment to boost business development activities among the youth.


Institution Name:		Business Incubation Division, Seoul Metropolitan Government
Institution Type:		Government Department
Contact Person:		DukYoung Jung
Title:		Deputy Director of Business Incubation Division
Telephone/ Fax:		82-2-3707-9316
Institution's / Project's Website:
E-mail:		iamjihye@seoul.go.kr
Address:		5th Fl. Press Center.25 Taepyeong 1-ga, Jung-gu, Seoul, Korea
Postal Code:		100-750
City:		Seoul
State/Province:
Country:

The Problem

Solution and Key Benefits

Actors and Stakeholders

(a) Strategies

(b) Implementation

(c) Overcoming Obstacles

(d) Use of Resources

Sustainability and Transferability

Lessons Learned

Contact Information