Supporting the Local Economy: Overcoming the Crisis of Self-Employed and Small Business Owners
Current Status of Self-Employed Individuals and Small Businesses
The crisis faced by self-employed individuals and small business owners in South Korea is becoming increasingly evident. They have been a fundamental part of the local economy, playing a key role in creating jobs rather than merely being participants in the economy. However, they are currently threatened with survival due to economic recession, reduced consumer spending, and rapidly changing market structures. This issue cannot be confined to individual failures it is spreading into a crisis affecting the entire community and the nation as a whole.
Impact of Prolonged Economic Recession
One of the most serious issues is the prolonged economic recession. The slowdown in economic growth dampens consumer sentiment, which directly leads to a decline in sales for small business owners. Due to this persistent stagnation, the rate of small business closures is expected to rise sharply again after the second half of 2024. In particular, face-to-face industries such as restaurants and accommodation are suffering even greater damage due to a decline in tourists and shorter stay durations.
The growth of the online market and the difficulties of offline businesses
With the rapid growth of online markets, traditional offline businesses are facing dual challenges. Digital transformation is emerging as a survival strategy, yet many small business owners are struggling with technology adoption and marketing capabilities. While some have successfully leveraged online sales and social media marketing to find new opportunities, there remains a significant gap for this success to become a widespread alternative.
Suggestions for Boosting Consumption
In an environment where consumption is contracted, basic income and local currency incentive systems can serve as important solutions to promote consumption and circulate the economy. Basic income is provided unconditionally to each individual, offering a minimum level of consumer capacity even amidst economic instability. Particularly for low-income individuals, this basic income allows them to resume everyday spending, which becomes a significant force driving the local economy.
Effects of Local Currency Incentives
When a basic income and a local currency incentive system are combined, the effect of stimulating consumption is further enhanced. If a portion of the basic income is provided in local currency, that amount is naturally encouraged to be used only within the local commercial district. The structure that provides additional funds when reloading encourages citizen participation and increases consumption within the community.
Cyclical Structure of Consumption and Revenue Growth
When consumers spend more money at local shops, the sales of self-employed individuals and small businesses increase. As sales rise, employment stabilizes, and the vibrancy of the local economy grows. The increased revenue then leads to a virtuous cycle of local consumption or reinvestment. In this process, money circulates within the community, and the economy becomes revitalized.
The Need for Systematic Execution and Participatory Policies
For these policies to achieve tangible results, meticulous design and execution of administration are essential. From the design stage of the policy, it should be implemented as a participatory policy that reflects the opinions of small business owners, consumers, and local communities. Only through continuous feedback can improvements be made, allowing the system to operate successfully.
The Importance of Sustainable Voluntary Solidarity
The voluntary solidarity of cooperatives, social enterprises, and local merchants within the region is becoming an important movement to overcome the crisis. Various experiments are being conducted through joint purchasing, cooperative collaboration, and strengthening local brands, and new business models based on digital transformation are also showing results.
The necessity of government support and citizen participation.
Local governments are promoting both the recovery of commercial districts and community resilience through initiatives such as the 'Good Store' campaign, entrepreneurship support policies, and marketing of local specialties. The voluntary participation of citizens in local consumption, along with tailored support from the government and non-profit organizations, underpins this trend.
The Importance of an Integrated Approach for the Future
Ultimately, universal basic income and local currency incentives are key to restoring economic circulation through consumption, increasing the self-sufficiency of self-employed individuals and local economies, and creating a virtuous cycle of ongoing consumption. The direction that the government, local authorities, businesses, and citizens must collaborate toward has become clear.
It's time to start the change
Protecting local businesses is essentially protecting our future. Now is the time to start making changes and plant the seeds of hope. We should believe that these small actions will accumulate and the brighter tomorrow we envision will become a reality.
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