Chey Tae-won calls for faster shift to 'new capitalism' that rewards social value creation

SK Group Chairman Chey Tae-won called Monday for an accelerated transition to a "new capitalism" that rewards social value creation beyond profit — one that, in his words, runs alongside democracy just as capitalism does today.

Chey made the remarks at the Ecosystem Leadership Exchange held in Seoul, where he described the Social Progress Credit initiative he has championed over the past decade as "a new method of reducing costs borne by the state and society."

The ELE, co-hosted by the Social Enterprise World Forum and Social Value Connect, is a new global leadership program the forum created to examine a country's social economy ecosystem firsthand and exchange experiences across nations. South Korea was selected as the host of the inaugural ELE.

"Relying solely on altruism cannot generate the scale needed to address expanding social problems," Chey said at the event. "A sophisticated performance-based incentive system that stimulates voluntary motivation is essential." He added that recent advances in AI technology can resolve the high transaction costs associated with precise value measurement.

Chey first proposed the Social Progress Credit concept at the World Economic Forum in Davos in 2013, arguing that measuring the outcomes of social problem-solving and providing commensurate rewards would draw more companies into addressing societal challenges. SK Group has since 2015 been running the SPC project, which quantifies the social outcomes generated by social enterprises in monetary terms and pays cash incentives proportional to those results.

A third report jointly published Thursday by the WEF's Schwab Foundation and Social Value Connect includes a foreword by Chey calling for change in the market economy.

"SK Group and Social Value Connect have demonstrated through experimentation that social value can be measured and linked to financial incentives," Chey wrote in the foreword. He went on to say that rules and mechanisms are needed to make social value work economically, and that "the system that determines economic value must itself change — to recognize, reward, and scale social value."

"Rather than reacting after market failures occur, we must change the rules of the market," Chey said, adding that he envisions a future in which social value becomes a foundation for growth rather than a peripheral element of the existing economic system.

The ELE runs through Thursday, covering topics that include social value reward systems, policy and legislation related to the social economy, private-sector participation and investment, and the building of national-level social economy ecosystems.