The Korea Local Administration Review

Community enterprise projects were began in 2011 with the goal of creating stable jobs and revitalizing local communities, and there are 1,650 projects in operation. Studies on community enterprise, including case studies and development strategy, are conducted vigorously. However, considering the fact that over 300 community enterprise projects have been terminated, there is a lack of studies on community enterprise that show poor performance or experience financial difficulties.
Accordingly, this study examined the factors affecting the operation of community enterprise based on previous studies on community enterprise projects and conducted a case study to verify the effects of these factors on community. The results of this study are as follows. First, the capability of organizational members increases with the increasing competency of social entrepreneurs. Second, the community spirit among residents can be created by means of money or profits, but such community spirit can disappear in a moment once these means disappear. Third, there must be a long-term plan to utilize government grants. Lastly, even if a business model is developed to make profits using differentiated content, it is extremely difficult to maintain the model.
Ultimately, community enterprise cannot be operated by accounting for several factors. The success of community enterprise depends on how the representative and organizational members, with a community spirit, develop differentiated content for each community using government grants.