South Korea Plans More Than 5 Trillion Won for AI and Robots in Smaller Factories

South Korea unveiled a plan on October 29, 2026, to direct more than 5 trillion won in national resources toward modernising small and medium-sized manufacturing businesses by 2030. The strategy combines industrial data, artificial intelligence and robotics, with the aim of extending automation capabilities beyond the country's largest manufacturers.

The Ministry of SMEs and Startups presented the programme at a national policy coordination meeting in Cheonan. Officials set a target of increasing the number of smaller manufacturers using AI from about 600 to 6,000 by 2030. They also want to support digital transformation at 30,000 firms and raise the proportion of smaller manufacturers adopting AI from roughly 1% to 10%.

The government calls the approach '3X', linking digital transformation, AI transformation and robot transformation. The distinction is practical: factories may first need reliable production data and upgraded equipment before AI software or robots can be used effectively in everyday operations.

The ministry plans to expand demonstrations of industrial robots on factory floors, including systems for handling materials and supporting production processes. It also aims to cultivate 500 specialist smart-manufacturing suppliers by 2030. Upgrades to the national manufacturing AI platform would support data collection, standardisation and model development, while officials intend to explore recognising company-generated manufacturing data as an in-kind contribution to certain support programmes.

Implementation will depend on future budgets, cooperation among ministries, and whether smaller businesses have the staff and infrastructure needed to adopt the technology. A target for the number of firms using AI is not the same as evidence that productivity has already improved. The spending figure covers a multi-year policy ambition, not a single payment made on Thursday.

The programme reflects an effort to spread industrial technology more widely through the manufacturing sector, while leaving measurable outcomes to be assessed as companies take up the support.