The government has decided to shift its support for small business owners from existing cash-based direct assistance to technology support centered on innovative technologies such as artificial intelligence (AI). The plan aims to focus on enhancing fundamental productivity and competitiveness through the integration of technology, as financial aid can be a short-term remedy.
According to a report from ChosunBiz on the 12th, the Ministry of Economy and Finance is in discussions with related departments to include this direction for supporting small business owners in the 'new government economic growth strategy' to be announced this month.
Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, noted in an internal meeting, "Continuing to provide only money is merely supporting survival," adding that "the support method must change to an innovative structure that helps small business owners build their own competitiveness." An official from the ministry said, "We plan to support in new ways by integrating AI technology."
The government provided large-scale cash assistance several times to compensate for the revenue loss of small business owners after the outbreak of COVID-19. An example is when the government disbursed 1.5 million won to each of the 940,000 people through the first emergency employment stabilization grant in the third supplementary budget at the beginning of 2020.
Since then, the government has continued to provide various forms of cash and loan support, including 'new hope funds,' 'support funds,' 'small business loss compensation funds,' 'quarantine support funds,' 'hope recovery funds,' and 'hope loans.'
Such direct support has been effective for short-term liquidity, but many have pointed out its limitations in strengthening the structural competitiveness of small business owners in the long term. Seok Byeong-hoon, a professor of economics at Ewha Womans University, stated, "Cash support can be like pouring water into a bottomless pit," and emphasized that, given the excessive proportion of small businesses in society, enhancing their competitiveness or restructuring the market is desirable.
The government plans to implement AI technology throughout the entire process of store operations to increase efficiency and create tailored technical support models by industry. For instance, AI-based ordering and payment systems, cooking automation equipment, menu development through data analysis, and serving robots are mentioned.
Including research and development (R&D) support, the government will help small businesses develop and improve their technologies independently. The detailed design and execution of this policy will be managed by the Ministry of Small and Medium Enterprises and Startups (SMEs). After the Ministry of Economy and Finance presents the direction at the announcement of this growth strategy, the SMEs ministry will specify the budget and project structure.
Some predict that this approach may not be effective. Woo Seok-jin, a professor of economics at Myongji University, remarked that "services relying on average algorithms, like menu development and commercial district analysis, struggle to create competitive differentiation," and suggested that applying AI in areas that directly aid management, such as rent reduction or tax and accounting automation, would be more effective.