"The Power of One-Stop Support" Procurement Companies Achieve Record Export High

'Entry-Growth-Leap' Customized Procurement Policy
Last Year Export Performance of $1.63 Billion
30% Increase in 2 Years, Record High Ever

Last year, public procurement companies achieved a record export performance of $1.63 billion. It is analyzed that the one-stop support policy, from entering the public procurement market to expanding overseas, has proven effective in the field.

The Public Procurement Service (PPS) announced on the 22nd that it has achieved a series of results in the field by providing customized support for the ‘entry-growth-leap’ of procurement companies in the public procurement market over the past two years.

Im Gi-geun, Administrator of the Public Procurement Service (left), recently visited Human Heavy Industries, a small and medium-sized public shipbuilding company, to inspect the on-site implementation status of the "Public Ship Order System Improvement Plan." Photo by Public Procurement Service

◆ Startup companies also enter the public procurement market = In March, PPS introduced the ‘Public Procurement Guide’ system to provide information and consulting on market entry and system utilization for startup and venture companies. This is a device for novice companies willing to enter the public procurement market but hesitant due to lack of information.

The Public Procurement Guide was deployed at the headquarters and 11 local offices nationwide, supporting 425 consulting cases within two months of its introduction. As a result, eight companies that received consulting entered the Nara Market comprehensive shopping mall through multiple supplier contracts, visibly demonstrating the entry achievements of novice companies into the public procurement market.

Venture Nara is a dedicated mall established by PPS for youth, startup, and venture companies, helping these companies pioneer initial sales channels. Its main role is to lower the threshold of the public procurement market for companies with technological capabilities but lacking performance to participate in the procurement market.

The number of companies registered (cumulative) in Venture Nara increased by 47%, from 2,227 in 2021 to 3,282 as of last month. The supply performance of initial companies through Venture Nara also increased by about 14%, from 125.5 billion KRW in 2021 to 143.1 billion KRW last year.

◆ Innovative companies climbing the growth ladder = PPS established a growth ladder for innovative companies through the ‘Innovative Product Public Procurement’ project, where the government purchases private innovative products first. The number of innovative products discovered through this project increased by 96%, from 968 at the start of the project in 2021 to 1,893 as of last month. During the same period, the public procurement performance of innovative products also increased by 74%, from 467.8 billion KRW to 815.7 billion KRW.

Inter-ministerial collaboration to support the growth of innovative procurement companies has also been strengthened. In February, PPS cooperated with 25 related organizations, including the Ministry of Economy and Finance, the Ministry of Trade, Industry and Energy, and financial institutions, to prepare support measures that provide package support for private marketing, finance and investment, and professional manpower for innovative procurement companies. Through this, procurement companies received financial support such as preferential loan interest rates and guarantee fees, allowing them to focus their capabilities on technology development and market expansion.

In addition, PPS has devoted efforts to deregulating obstacles to the growth of procurement companies over the past two years. In line with the government’s national policy that ‘regulatory reform is growth,’ the ‘Procurement Field Regulatory Innovation Committee’ has been operating since June 2022, improving 179 out of 206 identified regulations (87%), which is a representative example.

◆ Supporting procurement companies’ overseas expansion = Helping procurement companies that have entered and grown in the domestic public procurement market leap into overseas markets is the final stage of procurement company support policies.

PPS has intensively supported overseas market development through export consultation meetings and direct support for overseas bidding for promising export procurement companies verified domestically. As a result, procurement companies’ export volume increased by 30%, from $1.25 billion in 2021 to $1.63 billion last year.

Building on this momentum, PPS introduced a voucher worth 1 billion KRW this year specialized for overseas procurement markets, allowing individual companies to receive customized consulting on necessary support items such as acquiring standards and certifications, delivery procedures, and procurement law consultations.

Currently, efforts are focused on strengthening the linkage between Official Development Assistance (ODA) projects and the overseas expansion of innovative procurement companies. Previously, PPS contributed to reconstruction and recovery in Ukraine by providing emergency relief products such as ‘mobile X-ray’ on a humanitarian basis, creating a synergy effect that expanded overseas opportunities for excellent products verified for performance and quality in Korea.

Lim Gi-geun, Administrator of PPS, said, “PPS will strive to be a ‘friend of small and venture companies’ who supports them closest in difficult times,” and added, “We will focus the agency’s capabilities on creating a dynamic procurement market so that public procurement can serve as a solid growth ladder for the procurement field and procurement companies.”