Public Procurement Service Strengthens 'New Growth' by Removing 'Innovation' from Moon Administration... Organizational Restructuring in Full Swing

The Public Procurement Service (PPS), a material management agency under the Ministry of Economy and Finance, is set to fully implement an organizational restructuring. In line with the Yoon Seok-yeol administration’s New Growth 4.0 strategy, the PPS plans to focus its capabilities on discovering and strengthening future industry sectors such as robotics, information technology (IT), and mobility within the public procurement market.

According to the PPS on the 16th, a new New Growth Procurement Planning Office will be established within the core Purchasing Business Bureau, while the existing Innovation Procurement Planning Office will be abolished. Through public purchasing power worth approximately 180 trillion won annually, the PPS aims to support government policy goals by shifting from the ‘innovation’ procurement emphasized by the previous administration to a stronger focus on future industry sectors aligned with the Yoon administration’s ‘new growth’ policy.

Until now, the PPS has promoted a key strategy of supporting companies’ initial market entry as the first buyer for innovative technologies and products aimed at solving public issues such as welfare and the environment. The number of innovative products designated by the PPS increased more than fourfold from 345 in 2020 to a total of 1,593 as of the first quarter of this year. This was intended to lower entry barriers so that any company with good ideas or products can challenge the public market. Correspondingly, public procurement spending increased by 152.9% from 185 billion won in 2020 to 468 billion won last year.

Commissioner Lee Jong-wook Holding a Meeting with the Engineering and Architectural Design Industry
(Seoul=Yonhap News) Commissioner Lee Jong-wook of the Public Procurement Service is holding a meeting with representatives from the engineering and architectural design industry at the Seoul Regional Public Procurement Service in Seocho-gu, Seoul, on the 25th. 2022.11.25 [Provided by the Public Procurement Service. Redistribution and DB reproduction prohibited]
Photo by Yonhap News
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The core of the PPS’s current organizational restructuring lies in maintaining the existing framework while expanding procurement projects into new growth sectors. Representative new growth sectors promoted by the government include future mobility, quantum science technology utilizing 20-qubit quantum computers, and smart grid projects for timely establishment of public energy storage systems (ESS). The development of specialized services utilizing large-scale artificial intelligence such as ChatGPT is also being pursued.

The PPS plans to expand the base of related industries by pilot purchasing new growth products designated by each ministry or by utilizing procurement (private contract) agency services. To this end, the name of the Innovation Procurement Operations Division, temporarily established within the Purchasing Business Bureau, will be changed to the New Growth Market Support Division. Departments responsible for defense procurement and others under the former Innovation Procurement Planning Office will be transferred to the Purchasing Business Bureau, and a new Advanced Convergence Product Purchasing Division will be established instead.

However, some critics argue that this organizational restructuring is an effort to erase the symbolism of the previous administration. In response, a PPS official emphasized, “This restructuring aims to strengthen the role of developing advanced convergence products that could not be included under innovation procurement until now and open market channels for them. It is not about erasing the innovation procurement strategy pursued by the previous government but about expanding and complementing it to include new growth projects.”

The PPS has announced a partial amendment to the enforcement regulations of its affiliated agency organization rules related to the restructuring and plans to complete the organizational overhaul as early as the end of this month.

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