Administrator Chung Yang-ho of the Public Procurement Service (PPS)

 Ex-Deputy Minister Chung Yang-ho of the Ministry of Trade, Industry and Energy (MOTIE) took office as the 33rd administrator of the Public Procurement Service (PPS) at the Daejeon Government Complex on Feb. 24. He became the first PPS administrator from MOTIE, a departure from the precedent of most of his predecessors from the Ministry of Strategy and Finance (MOST). In reality, Chung has climbed the ladder at MOTIE, having held such positions as the director general for industry technology policy; director general for climate change and energy resources development; and deputy minister of the Office of Energy and Resources at MOTIE.
While delivering his inauguration speech, new PPS Administrator Chung not only touched on unwavering values such as fair competition, quality and safety of procurement products, and procurement transparency, but he also stressed the creation of new values as the “spirit of the times,” communication and speed.
Chung may have the right stuff to serve as the PPS administrator as it comes to procurement designed to nurture new growth engine industries. “I have much involved in MOTIE positions related to SMEs, and I now have a lot of work here to help SMEs, venture companies and new industries grow up,” he said.
Administrator Chung stressed the need for aggressively creating jobs and revitalizing the national economy in the course of executing procurement projects worth 55 trillion won, which accounts for 15 percent of the nation’s total annual government budget, as well as strengthening its function of pump-priming the exploration of markets for new industry products that emerge as new growth engines.
The following are excerpts of an interview between NewsWorld and PPS Administrator Chung in which he spoke of PPS policies, including the Korea Public Procurement Expo 2016 (KOPPEX 2016). The interview took place one day before the opening of KOPPEX 2016, being held at KINTEX, north of Seoul, from March 30 to April 1. A total of 251 exhibitors installed 668 booths to display 722 products, and 114 foreign buyers from 27 countries have been invited.

Question: You are the first PPS administrator from the Ministry of Trade, Industry and Energy (MOTIE). Will you tell our readers about how you plan to manage PPS?

Answer: I feel more responsibility as the first PPS administrator from the MOTIE. Such conventional roles as national budget thrift and fiscal policy support are important, but it is now getting more significant for our Service to nurture SMEs and new industries through government procurement. I think it is essential for an ex-MOTIE official to serve as PPS administrator in order to ramp up PPS's function of industry policy support of demand aspects.
While delivering my inauguration speech, I stressed three points. First, I will carry out procurement jobs, reflecting the ‘spirit of the times’ in consideration of economic conditions. PPS strives to aggressively create jobs and revitalize the national economy in the course of executing procurement projects worth 55 trillion won and as well to strengthen its function of pump-priming for exploring markets for new industry products that emerge as new growth engines.
Second, we want to carry out procurement the way we can communicate (with stakeholders). We will look at how procurement can contribute to achieving state agendas and core reform tasks beyond in-house and inter-ministry barriers while lending an ear to voices of the procurement field and complaints of related companies and proactively addressing them.
Third, we seek to implement procurement in a swift fashion. It is important to remove stumbling blocks hindering corporate creativity in consideration of the current situation of the national economy, which is at a watersheds of a leap forward or stagnation. PPS will revamp systems and policies, which have turned out to be ineffective and inefficient while reviewing corporate demands in a swift manner and informing their outcomes.

Dignitaries, including Deputy Prime Minister-Minister of Strategy and Finance Yoo Il-ho and PPS Administrator Chung Yang-ho, look at the exhibits on display during the Korea Public Procurement Expo 2016.

Q: You’ve been stressing ways of supporting the development of new growth industries through procurement since taking office as PPS administrator. In this regard, will you elaborate on the New Technology Production Pavilion of KOPPEX 2016?

A: PPS has continued to overhaul regimes so that new growth engine products like technology convergence items can gain easier access to the procurement market. Such institutional reform has allowed new growth engine products, which do not conform to existing certification programs, to present their test reports to prove their quality without certification and new growth engine items, which cannot be categorized into a classification of general products, to apply for excellent procurement product candidates. Thanks to the institutional overhaul, the portion of new technology and industry products, like a trash compressor bin using photovoltaic power, on the list of excellent products surged from 15.3 percent in 2014 to 24.3 percent in 2015. The installation of the New Technology Production Pavilion is part of PPS’s efforts to back the development of the new growth engine industries. We plan to aggressively ramp up efforts to help such new products as technology convergence items gain ground in market exploration, thus creating momentum for the creative economy by designating state-backed R&D items as “excellent” government procurement products.

Q: KOPPEX 2016 has become the first procurement exhibition to create a traditional Korean alcohol outlet. Will you tell us about how it supports traditional Korean alcohol companies?

A: Foreign alcoholic beverage imports are on the rise, but small traditional Korean alcoholic drink makers have a hard time in exploring markets. Traditional Korean liquor producers accounted for a meager 0.5 percent of Korea’s total liquor market, posting 48.6 billion won in sales as of 2013.
PPS plans to provide support to traditional Korean alcohol makers, which will be placed in the Online Shopping Mall within “Narajangteo” so that 40,000 public entities using the procurement system can buy it with ease. Public organizations purchasing traditional Korean alcoholic drinks there will have procurement fees exempted.

PPS Administrator Chung Yang-ho gives a speech during an opening ceremony of the Korea Public Procurement Expo 2016.

Q: Will you tell us about your blueprint for developing KOPPEX?

A: KOPPEX, marking the 17th rendition this year, has established itself as Korea’s largest G2B tradeshow. Some 2,200 exhibitors participated in the exhibition; 7,400 items were displayed; and the tradeshow attracted 470,000 spectators between 2000 and 2015. KOPPEX has evolved into Korea’s biggest G2B tradeshow, which helps SMEs and venture companies with technological prowess make the most of the domestic market as their test-bed for exploring overseas markets and grow into global players.
PPS aims to evolve KOPPEX into the likes of GSA Expo in the United States. We strive to expand the participants in the exhibition to buyers with purchasing power, ranking foreign officials and foreign ambassadors, so they can hook up with prominent Korean technology companies, facilitating many export deals. Prominent foreign companies will be attracted so Korean companies can gain more opportunities to benchmark global technology trends and the latest technologies.

Q: Will you explain how you support the exploration of overseas markets?

A: The domestic procurement market is in a state of saturation as competition is getting fiercer. Korean companies will have to turn to overseas procurement markets, whose opportunities are growing thanks to the signing of FTAs. The size of the overseas procurement market, deemed feasible for Korean companies, is estimated at roughly $6 trillion, emerging as opportunities for Korean companies. We at PPS have so far made strenuous efforts to help Korean SMEs with technology make inroads into foreign markets. PPS implements lots of support steps, such as the designation of companies with G-Pass (Government Performance ASSured) certificates, concentrating its support on selected ones such as dispatching them abroad as part of market exploration teams. These efforts have paid off: Korean excellent procurement suppliers chalked up $330 million in exports from the overseas procurement market in 2015. PPS plans to ramp up a variety of support steps, including one designed to share and utilize KOTRA’s overseas network, Hansang’s (businessmen of Korean descent) network and PPS’s cooperative network for international cooperation to produce synergetic effects with related organizations.

A view of PPS’s pavilion at KOPPEX 2016. (Photos:NewsWorld)