Korea Federation of SMEs, KOSME sign MOU to fast-track AI product commercialization

An 870 billion won ($56.4 million) program to accelerate AI adoption among small and medium-sized manufacturers is getting underway. The Korea Federation of SMEs and the Korea SMEs and Startups Agency have agreed to support the rollout of the initiative across foundational industries and cooperative-led projects to strengthen its real-world impact.

The two organizations signed an MOU Tuesday to jointly manage the "AI Applied Product Rapid Commercialization Support Project for the Manufacturing Sector," announcing they will launch operations this month.

The project is a Ministry of SMEs and Startups initiative designed to help small and medium-sized manufacturers transition to AI. Its core aim is to identify key challenges on the factory floor — including industrial safety, process innovation and management improvement — and support the commercialization of AI-based solutions. The total budget of 870 billion won will be invested over two years: 64.5 billion won this year and 22.5 billion won next year.

The program focuses on using AI technology to address recurring problems in small manufacturing operations, such as safety hazards, quality defects, production delays and labor shortages. The Ministry of SMEs and Startups and the Korea SMEs and Startups Agency's AI Innovation Promotion Division opened applications March 19 and recruited participating organizations for about a month. A total of 158 companies applied, resulting in a competition ratio of 4.4 to 1.

Selected projects are divided into short-term tasks, supported for up to one year, and medium-term tasks, supported for up to two years. Support categories consist of a private-demand track, which focuses on solving problems at individual manufacturing sites, and a regional development track. The regional track builds AI success models centered on anchor companies in a given region, then extends them to partner firms and businesses in the same industry.

The Korea Federation of SMEs will serve as a field management organization for foundational industries and related sectors. It will handle communication with participating organizations, identify on-site difficulties and monitor project progress to strengthen the program's practical effectiveness. The Korea SMEs and Startups Agency's AI Innovation Promotion Division will work alongside the federation across overall project operations and task management procedures.

Yang Chan-hoe, executive managing director of the Korea Federation of SMEs, said the federation, as the organization that best understands the unique characteristics of foundational industries and cooperatives, would closely manage the selected support projects to ensure they translate into genuine productivity gains by incorporating feedback from the field.