Performance-Sharing System for Win-Win Growth...88% of Public Enterprises in Gyeonggi Province Adopt Performance-Sharing System

[Suwon Ilbo=Park No-hoon Reporter] 1) After agreeing to implement the 'performance-sharing system,' Gyeonggi Housing & Urban Development Corporation (commissioned public enterprise) and Legende Co., Ltd. (contracting enterprise) are jointly developing 'energy-efficient intelligent bollard lighting technology' through 2023. Once the lighting technology development is completed, Gyeonggi Housing & Urban Development Corporation plans to conduct priority purchasing or negotiated contracts for construction sites where it can directly place orders and make purchases.

2) Gyeonggi Pyeongtaek Port Authority (commissioned public enterprise) and ThyssenKrupp Elevator Korea Gyeongwon (contracting enterprise) signed a service contract in February of last year to reduce elevator malfunction rates and enable rapid response when malfunctions occur. Gyeonggi Pyeongtaek Port Authority plans to review last year's performance and provide performance rewards in the form of cash distribution.

The 'performance-sharing system,' which Gyeonggi Province is promoting for mutual growth among large and small-to-medium enterprises and public institutions, is bearing fruit.

Gyeonggi Province has completed the adoption of the 'performance-sharing system' in 31 out of 35 public enterprises in the province (88%), and plans to encourage the remaining 4 public enterprises to adopt the performance-sharing system this year.

Separately, in the private sector, 47 small and medium-sized enterprises that have adopted the 'performance-sharing system' have received benefits from Gyeonggi Province, including preferential funding support and bonus points for participation in provincial projects.

The performance-sharing system refers to a system in which large enterprises work together with partner companies to pursue process improvements and develop new technologies to reduce costs, and then share the benefits of the collaborative activities.

Its purpose is to provide fair compensation for the innovation efforts of small and medium-sized enterprises and to correct unfair profit-sharing practices such as excessive reductions in delivery unit prices.

The performance-sharing system is one of Governor Lee Jae-myung's campaign promises. Gyeonggi Province finalized the 'activation of performance-sharing system adoption' policy in December 2018 and began implementation.

Gyeonggi Province directly encourages the adoption of the performance-sharing system in 35 public enterprises of the province and municipal and county governments, and plans to provide 17 incentives in areas including business support, contracting, and taxation to private enterprises.

More than two years after the adoption of the performance-sharing system, 31 public institutions in Gyeonggi Province, including Gyeonggi Housing Corporation, Seongnam Urban Development Corporation, and Uiwang Urban Development Corporation, have completed adoption of the performance-sharing system.

This year, the province plans to support the adoption of the 'performance-sharing system' by the end of the year for the remaining 4 institutions—Hwaseong Urban Development Corporation, Hanam Urban Development Corporation, Anseong Facilities Management Corporation, and Yangpyeong Corporation—through institution visits, coaching, and encouragement.

In the private sector, 47 small and medium-sized enterprises have participated in the performance-sharing system over the past two years, receiving benefits including ▲selection for large and small-to-medium enterprise mutual growth R&D support projects ▲designation as a responsible enterprise in Gyeonggi Province ▲preferential support for small and medium-sized enterprise development funds ▲designation as a sincere taxpayer.

The province plans to actively promote the provision of incentive plans to expand private participation. All 17 incentives provided by Gyeonggi Province upon adoption of the performance-sharing system include ▲bonus points for designation as a promising small and medium-sized enterprise in Gyeonggi Province ▲preferential support for small and medium-sized enterprise development funds ▲bonus points for application for overseas marketing support projects.

Kim Ji-ye, Director of the Fair Trade Bureau at Gyeonggi Province, stated, "To ensure mutual prosperity and sustainable development between the public and private sectors, and between large enterprises and small and medium-sized enterprises, it is essential to establish relationships and systems for mutual growth," and added, "This year, we will do our utmost to establish the system and promote the performance-sharing system so that more enterprises can participate."