"Strengthening Innovation Procurement R&D Functions to Drive SME Technological Innovation"

[Asia Economy Reporter Donghyun Choi] An analysis has emerged suggesting that the innovation procurement research and development (R&D) function should be strengthened to incentivize technological innovation among small and medium-sized enterprises (SMEs).

On the 15th, the Innobiz Policy Research Institute published 'Innobiz Policy Brief 2022-10,' presenting the 'Current Status and Improvement Tasks of Domestic and International Innovation Procurement Policy Expansion.' It stated that although the performance of innovation procurement has continued to increase since 2020, a year marked by difficulties due to COVID-19, some limitations remain that require supplementation.

Innovation procurement began when the Public Procurement Service established the 'Innovation-Oriented Public Procurement Plan' in July 2019, in response to the limitations of public procurement, which had focused on verified products and mature technologies, and the emerging need for innovation led by the public sector. In March 2020, the 'Act on Procurement Business' was also amended.

The Public Procurement Service annually provides opportunities for product testing through public institutions via the pilot purchase project for innovative products, supporting public service improvement and market development for innovative products. The scale of the pilot purchase project for innovative products increased from 28.3 billion KRW in 2020 to 44.5 billion KRW in 2021, and 46.5 billion KRW this year.

Through this policy brief, the institute also presented the difficulties faced by demand companies related to current innovation procurement policies and directions for development. Demand companies complained that the entry process is difficult due to numerous laws, regulations, and bidding qualification requirements applied to innovation procurement. Difficulties were also noted when there are no laws or regulations for new products or when related product names are not defined.

To address these difficulties, the institute suggested ▲ regulatory relaxation and expanded education on innovation procurement policies to help innovative companies such as Innobiz-certified firms enter the market ▲ measures to respond to insufficient laws and regulations ▲ various routes to discover promising companies and recruitment of competent experts ▲ strengthening the innovation procurement R&D function to incentivize technological innovation among SMEs.

Kim Se-jong, President of the Innobiz Policy Research Institute, said, “Innovation procurement policy will lead the innovative growth of Innobiz companies, which are leading manufacturing innovation, and serve as a strong support.” He added, “It is necessary to strengthen the R&D function for discovering excellent products and technologies centered on innovation procurement.”

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