The Ministry of SMEs and Startups (MSS, Minister Han Seongsook) announced on Wednesday, July 30, that it will begin accepting applications from metropolitan local governments (excluding Seoul) to participate in the ‘2025 Region-Led AI Transformation’ project, aimed at accelerating AI adoption among regional SMEs with low AI utilization.

Planned as a new initiative under the second supplementary budget for 2025, the project has a budget of KRW 35 billion and will support various AI utilization and dissemination programs designed by metropolitan local governments to reflect the characteristics of their regional industries.

Five metropolitan local governments will be selected, each receiving an average of KRW 7 billion (up to 60% of the total project cost). The selected governments must match at least 40% of the total project cost, including contributions from participating SMEs. To encourage competitiveness and maximize project outcomes, MSS also plans to implement differentiated funding based on evaluation results.

AI is emerging as a key driver of business competitiveness. However, according to a 2024 survey by the Korea Chamber of Commerce and Industry and the Korea Institute for Industrial Economics and Trade, the AI utilization rate among SMEs stands at 28.7%, significantly lower than the 48.8% recorded by large enterprises. The gap is even wider regionally, with non-capital area businesses reporting a utilization rate of just 17.9%, compared to 40.4% for businesses in the capital region.

This project aims to enhance the competitiveness of SMEs and reduce regional AI disparities by accelerating the adoption and dissemination of AI among regional SMEs with low utilization rates.

Metropolitan local governments wishing to participate in the project may apply with a variety of programs freely designed to reflect the characteristics of their regional industries. These may include the development and distribution of AI solutions, establishment of AI testbeds and cloud-based AI environments, and enhancement of AI utilization capabilities for employees of local businesses.

For details such as the project proposal and application guidelines, interested parties should contact the dedicated task force for SME AI Utilization and Dissemination at the Korea SMEs and Startups Agency (KOSME), the implementing agency, at 055-751-9646 or 9647. Applications must be submitted by August 29 in accordance with the announcement.

Through document review and in-person evaluations, MSS will assess implementation capacity, expertise, feasibility, and the ability to secure its own funds. In October, five local governments will be finally selected.

Minister Han Seongsook stated, “I hope that the rapid adoption and dissemination of AI among regional SMEs will lead to a swift improvement in their productivity and competitiveness. MSS will continue to make ongoing efforts to strengthen AI capabilities for SMEs moving forward.”