Delivery apps and POS terminals are as far as it goes for 83% of small business owners

Eight in 10 small business owners use digital or AI technology, but most have not moved beyond basic tools such as online food delivery apps, POS terminals and kiosks, a new survey shows. Participation in government support programs was limited to 3.2%, raising concerns that digital transformation policies are failing to reach the ground level.

The Korea Federation of Small and Medium-sized Enterprises released the results Tuesday of a survey on digital transformation and AI adoption among 500 small businesses. Respondents included 200 food service operators, 150 retailers, 50 accommodation businesses, 50 personal service providers and 50 education and leisure businesses.

The survey found that 80.0% of small business owners were using digital or AI technology, while 19.6% were not and 0.4% had stopped after trying it. However, the figures include everyday digital tools such as word processing software, kiosks and online food delivery apps.

The more telling finding was the depth of adoption. When asked about their level of digital technology use, 30.5% described themselves as being at a basic stage and 52.8% at an introductory stage — a combined 83.3%. Most small businesses are using some form of digital technology, but few have advanced to the point where it meaningfully improves store operations or drives sales growth.

Still, many owners reported tangible benefits. Among those who had adopted digital technology, 69.8% said they experienced time savings and greater efficiency. Some 25.5% reported higher sales through improved promotion, 11.0% saw cost reductions and 8.5% noted improved customer satisfaction.

The survey also exposed a wide gap between government support programs and the businesses they are meant to reach. Only 3.2% of respondents said they had participated in a government digital technology or AI support program in the past three years. Among those who had, AI education programs were the most common at 50.0%, followed by smart store technology distribution at 31.3%, online sales channel support at 12.5% and AI voucher support at 6.3%.

Satisfaction among participants was high, with 87.5% saying the programs were helpful — 43.8% said "very helpful" and another 43.8% said "somewhat helpful." Among those who had not participated, however, 76.2% said the main reason was simply that they did not know such programs existed.

The support policy small business owners said they needed most was help with operating costs, cited by 59.0% of respondents. Initial cost support followed at 35.8%, customized education at 16.6% and consulting support at 14.0%. Among this year's digital support programs, AI education and support for developing AI-based products and services topped the list of most anticipated initiatives at 46.4%.

Kim Hee-joong, head of the economic policy division at the Korea Federation of Small and Medium-sized Enterprises, said that while small business owners are using digital tools at a high rate, most remain at a basic level. "It is urgent to strengthen digital capabilities so that they can provide real, practical help in running a store," he said.