By Kichan Kim
Professor of Business Administration, The Catholic University of Korea Chair of the Board, International Council for Small Business Visiting Professor of Management, GW University
Run on the AI highway with Technological AI as the engine—and Human AI as the fuel.
Korea’s Top Ten Trends for SMEs in 2026 offers a forward-looking roadmap for Korean small and medium-sized enterprises navigating an era of profound economic, demographic, and technological transition. As concerns about “Peak Korea” intensify, this report argues that the path forward lies not in incremental change, but in a decisive pivot toward AI, powered equally by technological capability and human imagination.
Written by Dr. Ki-Chan Kim, Chair of the Board of the International Council for Small Business (ICSB), the report frames Technological AI as the engine of transformation and Human AI as its fuel, calling on Korean SMEs to accelerate boldly, rethink business models, and seize new growth opportunities at home and across global markets.
10
The next phase of globalization is not about factories—it is about brands, culture, and identity. Korean SMEs will succeed in ASEAN markets not by exporting production capacity, but by exporting K-culture–infused value propositions that resonate with young, digitally native consumers.
09
China reflects past competitive models visible in the rearview mirror. The road ahead points toward high-growth, youthful markets such as Indonesia, where population dynamics, resources, and digital adoption create new demand frontiers for Korean SMEs.
08
Bureaucracy suffocates initiative without confrontation. Excessive approvals, rigid reporting, and hierarchical decision-making clog the flow of entrepreneurial energy. Even as firms scale, maintaining a Day-1 mindset—fast decisions, empowered teams, and accountability—is essential to keep the engine responsive.
07
As first-generation founders approach succession, Korean SMEs face a decisive transition. Successful succession blends heritage and innovation—the founder’s values with the successor’s technological fluency—creating a second founding rather than a simple inheritance and extending organizational longevity.
06
Recent Nobel-level thinking reinforces a critical truth: technology does not determine outcomes—human imagination does. AI only becomes transformative when guided by creativity, inclusive institutions, and purposeful leadership.
05
Financial statements are no longer the sole performance dashboard. Customer trust, sentiment, and reputation become strategic assets. In an AI-driven economy, real-time reputation management increasingly shapes access to capital and long-term firm valuation.
04
AI enables SMEs to design thousands of personalized interactions for a single customer. Mass marketing gives way to B2Me, where hyper-personalization becomes the operating system of customer engagement and value creation.
03
Strategy competes on price and quality; culture competes for people. In 2026, Korean SMEs win not through optimization alone, but by cultivating people-centric entrepreneurial cultures that empower initiative, accountability, and learning, making culture the ultimate competitive advantage.
02
Fear corrodes transformation. When employees see AI as a threat, adoption fails. Human AI—rooted in appreciative inquiry, trust, and imagination—reframes AI as a colleague, not a job killer. Without people, even the strongest AI engine stalls.
01
AI is no longer a productivity add-on; it becomes the heart of the enterprise. Korean SMEs must make an unequivocal declaration: legacy analog systems and partial digital tools are no longer sufficient. AI represents a civilizational shift in how firms decide, compete, and grow—and leadership must act decisively and now.
Conclusion: Preparing for the Truth.
In 2026, as concerns about “Peak Korea” intensify, the future of Korea’s SMEs will be shaped by their ability to break free from bureaucratic inertia, embrace AI as a core operating system, expand confidently into global markets, and cultivate people-centered entrepreneurial cultures. The next era of growth will not be driven by policy or technology alone, but by deep collaboration between government, industry, and entrepreneurs committed to building resilient, innovative, and human-led enterprises.
Bureaucracy is the silent enemy of entrepreneurship. AI is no longer optional — it is the survival engine of Korean SMEs.
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