Choi Tae-won (최태원), chairman of SK Group, stressed that scaling up solutions to social problems requires a rewards system based on results. Choi delivered a speech on his social value journey and future vision at the first session of the "Ecosystem Leadership Exchange (ELE)" held in Seoul on Oct. 12. He also mentioned the importance of accurately measuring social value.

Choi said, "Traditional CSR was centered on budget spending and publicity, so systems to measure real social outcomes were relatively absent." He then introduced the process of building ecosystem support platforms such as Happy Dosirak, Happy Narae, a Social Enterprise MBA and the Social Value Institute. He also said high transaction costs for precise value measurement can be solved through recent advances in AI technology.

Choi said, "Relying only on altruism cannot secure the scale needed to solve expanding social problems," adding that "a sophisticated performance-based incentive system that stimulates voluntary motivation is essential." He also defined the Social Performance Incentive (SPC), which converts social enterprise performance into monetary value and rewards it in cash, as "a kind of new method that reduces costs for the state and society." Choi said a transition to a "New Capitalism" in which creating social value beyond profit seeking is rewarded should be brought forward, just as capitalism and democracy operate together.

Choi first proposed the SPC concept at the World Economic Forum (WEF) in Davos in 2013. SK has continued the SPC project since 2015, and at last year's WEF Schwab Foundation assembly it also presented a plan to trade measured social value in the market.

The same idea continued in the foreword to a third joint report released for the third time by the WEF Schwab Foundation and the Social Value Institute on Oct. 8, titled "The Impact Economy: Turning Disclosure into Demand." In the joint foreword, Choi Tae-won of SK said, "The system itself that determines economic value must change to recognize social value, reward it and scale it up," adding, "Rather than responding to market failure after the fact, we must change the rules of the market."

ELE is a global leadership program newly set up by the Social Enterprise World Forum (SEWF) to examine a country's social economy ecosystem on site and exchange experiences among countries. SEWF is an international platform launched in Scotland in the United Kingdom in 2008, and more than 1,000 people from 65 countries took part in last year's annual forum in Taipei. South Korea was selected as the host and learning site for the first ELE.

The Social Value Institute and SEWF are jointly holding the event for four days through Oct. 15. Nineteen organisations from 15 countries are taking part, including Scotland's business minister, a British policy expert on performance-based compensation, Singapore's Temasek Foundation, and nonprofit foundations from Australia, Canada and the United States.