[Public Voices]For AI Policies for SMEs to Succeed

Private Sector Leadership, Inter-Ministerial Collaboration, and Government Restraint Are Key

Recently, a National Growth Fund worth 150 trillion won was established. The core focus of this fund is undoubtedly artificial intelligence (AI) technology and industry. While public attention is drawn to the strategies of major players like Nvidia and OpenAI, there is a crucial policy direction that must not be overlooked for the future of the Korean economy. That is, supporting small and medium-sized enterprises (SMEs) to become key players in the AI industry, and enhancing productivity and international competitiveness through AI-driven digital transformation.

The recent AI support policy announced by the Ministry of SMEs and Startups can be summarized in three main directions. First, the expansion of 'manufacturing and industrial AI transformation (AX)' through inter-ministerial collaboration. The Ministry of SMEs and Startups has signed a memorandum of understanding (MOU) with the Ministry of Science and ICT and the Ministry of Trade, Industry and Energy to jointly promote the development of AI ventures and startups, technology commercialization for small business owners, and on-site customized AX technology. Given that past inter-ministerial cooperation often ended with rhetoric and little result, it is highly encouraging that the emphasis in policy-making has shifted to practical 'joint implementation.'

Second, the expansion of private sector-led research and development (R&D) budgets for SMEs and startups. In particular, it is noteworthy that the government has decided to increase R&D budgets using the TIPS model, where the government provides support when the private sector chooses to invest. TIPS is a representative success story that maximized policy effectiveness by leveraging the private sector's selection capabilities. When public organizations with weak incentives for success directly engage in businesses outside their core functions, they are likely to fail in the face of fierce market competition, regardless of their capabilities. This highlights the importance of motivation and demonstrates a willingness to boldly delegate roles to the private sector.

Third, the bold adoption of AI and digital technologies to improve productivity. The 'Improvement Plan for AI-based SME Support Systems' announced in November presents a blueprint for rational technology utilization and work efficiency. Notably, the plan emphasizes applying digital innovation first to internal government processes. The government aims to reduce required documents by more than 50% to streamline administrative procedures, alleviate the burden of document preparation through generative AI, and use AI models to evaluate investee companies and detect poor business plans from brokers. The government is also providing AI tools for companies' self-assessment, actively supporting productivity innovation.

The current direction and achievements are desirable. However, what matters most is what happens next. As global AI support trends are likely to focus on large and mid-sized companies, the Ministry of SMEs and Startups must clearly represent the voice of SMEs even while collaborating with the Ministry of Science and ICT and the Ministry of Trade, Industry and Energy. This will be a task that only the Ministry of SMEs and Startups can undertake to protect the rights of SMEs and secure necessary support, but it is also a very challenging one.

Expanding private sector delegation and driving productivity innovation within organizations and SMEs through AI are the right solutions to break the cycle of failed innovation. However, it is somewhat concerning that terms such as 'customized platform' and 'inter-ministerial collaboration,' which have been associated with past policy failures, are reappearing.

For policies to take root successfully, the strong leadership of the President and ministers must go beyond words and be followed by continuous and meticulous execution. Above all, after delegating authority to the private sector, it is essential to embrace the role of a 'small government' by exercising patience and refraining from interference, and to practice genuine collaboration by boldly entrusting responsibilities to other ministries without departmental self-interest. This should be kept in mind to ensure the success of future AI-based digital innovation.