Lee Jeong-dong, Blue House Special Advisor: "The State Must Guarantee New Attempts by Innovative Companies... Support with 150 Trillion Public Procurement"

InnoBiz Policy Research Institute Seminar on "Achievements and Challenges of Innovation Growth in Small and Medium Enterprises"

Lee Jeong-dong, Special Advisor to the President for Economic Science. Photo by Asia Economy DB

[Asia Economy Reporter Lee Junhyung] “The government must create an environment where innovative companies can try new things. A portion of the public procurement, expected to be worth 150 trillion won next year, should go to innovative companies.”

Lee Jeongdong, Special Advisor for Economic Science at the Blue House, stated this on the 6th at the ‘InnoBiz Innovation Joint Seminar’ held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul.

The advisor emphasized the importance of ‘innovative procurement,’ selected as one of the six major government innovation tasks. Innovative procurement is a project that supports technology innovation companies in securing market channels through public procurement. He said, “Innovative procurement is a concept that solves public problems through private innovation,” adding, “It has already established itself as a new framework for industrial policy in the U.S., China, Europe, and other regions.” He continued, “Out of the approximately 600 trillion won government budget next year, about 140 to 150 trillion won will be spent on public procurement,” and “A portion of this fund should become an opportunity for companies trying to test something new with innovative technology.”

The Innobiz Policy Research Institute, together with the Science and Technology Policy Institute and the Small and Medium Business Research Institute, held the "Innobiz Innovation Joint Seminar" on the 6th under the theme "Achievements and Challenges of Innovation Growth in Small and Medium Enterprises." In the front row, from the second person on the left: Moon Mi-ok, President of the Science and Technology Policy Institute; Lim Byung-hoon, President of the Innobiz Association; Lee Jung-dong, Special Economic and Science Advisor to the Blue House. In the back row, the first person on the left is Lee Dong-joo, Acting President of the Small and Medium Business Research Institute.
[Photo by Innobiz Association]

The seminar, held under the theme ‘Achievements and Challenges of SME Innovation Growth,’ was organized by the InnoBiz Policy Research Institute together with the Science and Technology Policy Institute and the Small and Medium Business Research Institute. Experts in science, technology, and corporate innovation analyzed the achievements of SME technological innovation and explored future policy tasks. The InnoBiz Policy Research Institute was an organization temporarily operated by the InnoBiz Association. As the importance of technological innovation grew, it was institutionalized last November to conduct policy development and research.

During the seminar, various opinions were raised to support the growth of technology innovation companies. Yoo Hyosang, a professor at Soongsil University Graduate School of Small and Medium Business, said, “Traditional companies generate profits through sales to create cash flow, but new types of companies do not,” adding, “Global unicorns are characterized by making aggressive investments that create a super-gap, even while operating at a loss and receiving investments exceeding their deficits.” According to Professor Yoo, Coupang recorded losses exceeding 4.67 trillion won but continued corporate activities with offsetting investments and succeeded in exit.

However, Professor Yoo emphasized, “There is a need to activate exits through mergers and acquisitions (M&A) rather than initial public offerings (IPO).” He stated, “Among U.S. startups that succeeded in exit, 97% recover investments through M&A,” and “Only 0.1% of companies that received initial investments in the U.S. proceed to listing.” This implies that to increase the likelihood of technology innovation companies receiving investments under favorable conditions, exits through M&A should be prioritized over IPOs.

Kim Sunwoo, Director of the Science and Technology Policy Institute, said, “The government should act not as a supporter but as a ‘value creator’ for corporate innovation.” Kim explained, “Research and development has become a natural activity, not an option for companies,” and “The government should set support for SME research and development as a public goal and actively foster innovative companies.”

He also noted the importance of recognizing that companies conduct research and development in various forms. Kim said, “Companies participate in R&D in multiple ways, such as collaborating with university research institutes without having their own internal R&D centers,” and “Some place ‘Innovation outposts’ externally to monitor innovation outside the company and invest in technology.”

A discussion was held moderated by Kim Gichan, a professor at Catholic University. Participants included Hong Unseon, Director of the Small and Medium Business Research Institute, Baek Kyungho, Director of the Korea Technology Finance Corporation, and Park Sangmoon, a professor at Kangwon National University.

Im Byunghoon, Chairman of the InnoBiz Association, said, “Technology innovation companies have shown good results despite adversities such as the 2019 Korea-Japan trade conflict,” and “I hope this seminar becomes a forum for discussions that draw the big picture for the next 20 years.”

This content was produced with the assistance of AI translation services.