According to the Ministry of Health and Welfare's 2024 Survey on the State of Social Service Supply, adoption of AI, robotics and other digital technologies among social welfare service providers was limited to between 3.4 percent and 20.7 percent, depending on the area of work. Yet 40 to 60.8 percent of respondents said they intended to use digital technology in the future — a stark gap between the will to transform and the infrastructure to support it. Among the barriers cited, 46.9 percent of responding organizations pointed to a lack of budget. For all the talk of digital innovation and AI transformation, the frontline organizations that fill the gaps in welfare coverage remain stranded in a technology desert.
Digital transformation budgets pursued by the Ministry of Science and ICT and the Ministry of SMEs and Startups have largely focused on boosting productivity among for-profit small and medium-sized enterprises. Small nonprofits, cooperatives and other public-interest actors — the long-tail players working at the grassroots level of local government — have been structurally excluded from that support framework. If government and local subsidies are to achieve lasting sustainability, the time has come for a wholesale shift away from simple cash transfers and toward an "AX voucher governance model" grounded in public-interest technology.
The fundamental mistake public administration has made is its failure to transplant policy architectures proven in the for-profit sector into the public-interest sphere. The supply-demand matching structure demonstrated by the Ministry of SMEs and Startups' "non-face-to-face service voucher" project — and its successor, the "SME innovation voucher" project — must be extended boldly to the nonprofit and social sector. The core problem is that a procurement model already familiar to for-profit startups has never been properly applied to public-interest organizations. The answer lies in building a public procurement platform that consolidates the fragmented, single-year project budget line items that local governments have been distributing piecemeal to community groups into a unified "public-interest AX voucher." Just as small business owners open independent online stores through smart commerce platforms, small organizations would subscribe to government-voucher-funded administrative automation solutions and donation-management tools.
This platform-centered subscription model becomes a powerful quantitative tool for defending public finances. By eliminating duplicated investment in system development and maintenance budgets across individual organizations, it can deliver immediate budget savings at the local government level. When donor management and donation-receipt processing are automated through cloud-based systems, the administrative hours that staff once spent on manual paperwork drop noticeably — and those hours flow directly into caring for marginalized communities and improving public-interest services. This is not merely a matter of convenience; it is a question of organizational capacity, expanding the scope of work a single staff member can realistically handle.
The results of adoption must be demonstrated through quantifiable metrics, not vague assertions of necessity. An evaluation framework that aggregates saved administrative costs, the time value of staff and the resulting expansion of social impact — and presents the findings as a Social Return on Investment (SROI) research note — must accompany the rollout. There will, of course, be legitimate security concerns about migrating sensitive donor information and accounting data to external cloud systems. Restricting the eligible pool to solutions that have passed Public Procurement Service vetting and obtained national security certification such as CSAP, and adopting a designated voucher payment method, can simultaneously prevent budget misuse and ensure data security.
The social impact we should pursue is not a monopolistic ecosystem dominated by large NGOs. It is an intelligent governance structure in which the countless small organizations in every corner of the country — long excluded from digital transformation for lack of budget — can each stand on their own. Ending the era of fragmented procurement and routine subsidy accounting, and pioneering a technology-driven public-interest ecosystem: putting the key of public-interest technology — the "AX voucher" — into the hands of these organizations is the most cost-effective path toward an intelligently administered state. Before expanding the total budget, we must first change how the money already committed is actually used on the ground.
Kim Byung-jin is secretary-general of the Global Youth Entrepreneurship Foundation and holds a doctorate in business administration.
pooh@heraldcorp.com
