[Public Voices]Productive Finance, a Priming Pump for SME AX Transformation

Dosung Kim, Dean of the Sogang University Business School

Finance is often compared to the "lifeblood" of the economy. Just as blood must circulate smoothly throughout the body for life to persist, capital must flow efficiently to small and medium-sized enterprises, the capillaries of our economy, in order for the energy of innovation to be generated. Especially in times when technological paradigms are rapidly changing, the flow of funds becomes a decisive factor that determines not only the fate of individual companies, but also the fundamental strength of the national economy.

This is why the role of "productive finance" is being newly highlighted across the Korean economy. As both domestic and global uncertainties have increased, there is a growing tendency for capital to concentrate in relatively safe assets. As a result, innovative companies expected to drive future growth are now facing an imbalance in capital supply and demand. At this point, finance needs to focus more on its "productive function," guiding capital to industries that create high added value, rather than merely performing the role of asset management.

Resolving Capital Imbalances for Innovative Companies Through "Productive Finance"

The management environment currently faced by our small and medium-sized enterprises stands at a true crossroads of "great transformation." Beyond digitalization, "AI Transformation (AX)" is reshaping the competitive landscape across all industries. The problem is that, despite this transformation being inevitable, private capital is hesitant to move due to investment risks and uncertainties. In such situations, policy finance must not simply serve as a supplement, but rather play a role in attracting private investment and sharing risks. Through initial capital investment, it should spark AX investment by small and medium-sized enterprises and act as an effective policy tool to drive innovation and growth throughout the market.

Financial policies for 2026 are making this direction even clearer. Moving beyond the traditional role of liquidity provision, policy capabilities are being concentrated on innovative growth and future cutting-edge technology fields, strengthening the role of finance as a "growth catalyst." This demonstrates a strong policy will to support not only the short-term survival of small and medium-sized enterprises in a rapidly changing business environment, but also to actively help them secure solid mid- to long-term competitiveness.

Of particular note is the Ministry of SMEs and Startups’ focus on fostering the "ABCDEF" industries: AI (Artificial Intelligence), Bio, Cultural Contents, Defense & Aerospace, Energy, and Factory Innovation (Manufacturing Innovation). These sectors represent strategic industries that will determine Korea’s future national competitiveness. Allocating policy funds to these sectors as a priority provides not just simple support, but also lays the minimum foundation for small and medium-sized enterprises to compete confidently in the global market.

Paving the Way for AX Transformation Through Priority Fund Allocation

Among the changes being felt in the field, the most notable is the accelerated support system for AI Transformation (AX). For small and medium-sized enterprises that have hesitated to transition due to lack of funds and commercialization capacity, programs such as "AX-Sprint 300" are providing much-needed, practical breakthroughs. These initiatives, which support the rapid launch of promising AI application products into the market, can be seen as real-time responses that aim not to miss the "golden time" that the field needs.

Ultimately, what matters is not the total amount of capital, but how the "pathways" for capital flow are designed. If the government's clear policy direction aligns closely with the innovation drive in the field, the era-defining challenge of AI Transformation could become a new growth opportunity for Korean small and medium-sized enterprises. I hope that productive finance will become a "policy priming pump" that proactively leads private investment, driving the AX transformation of small and medium-sized enterprises and powering the transformation of our economy.

Doseong Kim, Dean of the School of Business at Sogang University

This content was produced with the assistance of AI translation services.