'Innovation Procurement' 3 Years... Cumulative Purchases 1.7 Trillion, SME Sales Up 40%

4th Meeting of the Procurement Policy Deliberation Committee
Deliberation and Resolution on Measures to Strengthen Innovative Procurement

[Asia Economy Reporter Song Seung-seop] The government's innovative procurement policy has achieved a cumulative purchase record of 1.7 trillion KRW. Sales and employment of related small and medium-sized enterprises (SMEs) have also increased. The government plans to actively promote a "substantial improvement plan" to enhance public service and secure global competitiveness in the future.

According to the Ministry of Economy and Finance, on the 26th, the Procurement Policy Deliberation Committee held its 4th meeting and reviewed and approved the substantial improvement plan for innovative procurement. The Procurement Policy Deliberation Committee is a public-private joint organization that establishes mid- to long-term policies and systems related to public procurement, and deliberates on improving public services, discovering public demand, and selecting purchase targets.

At the meeting, the progress of innovative procurement was also reviewed. Innovative procurement is a system in which the public sector first purchases and uses innovative products and technologies to meet innovative demand. The goal is to support technological growth and innovation growth and to improve the level of public services. It began to be actively promoted from 2020.

So far, a total of 1,574 innovative products have been designated under innovative procurement. The number has increased by more than 600 each year, from 345 at the beginning of implementation to 968 last year. Purchase performance increased from 471.6 billion KRW in 2020 to 647.3 billion KRW as of the 22nd of this year. The cumulative purchase performance over three years is 1.7412 trillion KRW. Innovative procurement SMEs saw their average sales and employment increase by 40.4% and 30.9%, respectively, compared to the previous year.

Based on three years of operational performance and evaluation, the government will improve the system. Regarding the designation system for innovative products, it was found that the system is complex and that products with low innovation and public value were designated, indicating a need for improvement. Therefore, the designation system will be simplified to be department-centered, with specialized departments taking responsibility for management. The quality of innovative products will be screened through a two-stage evaluation to exclude products with low public demand or simple functional improvements.

Additionally, to prevent cases focusing only on innovative product performance, the evaluation system will be reorganized. The uniformly set purchase target system will be reasonably adjusted considering the characteristics of each institution, and incentives will be given for exceeding targets. When conducting evaluations, institutions can choose between quantitative and qualitative methods.

To expand public procurement where there is no purchase performance, accessibility and purchasing convenience will be improved, and innovative procurement policies will be linked with major policies.

Meanwhile, integration of the "Electronic Procurement System" and the "Next-Generation Nara Marketplace System," which individual public institutions currently use independently, is being promoted. Among the 26 institutions using their own systems, three with legal grounds are targeted.

Choi Sang-dae, Vice Minister of the Ministry of Economy and Finance, who presided over the meeting, emphasized, "To achieve public innovation that the people can feel, all institutions should actively cooperate to ensure that the substantial improvement plan for innovative procurement approved at this meeting is implemented without delay."

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