In 2026, Korea’s startup policy enters a defining phase. The government isn’t simply funding innovation—it’s restructuring how growth capital, technology, and human capability interact. Through a KRW 11.5 trillion national fund, the Korea SMEs and Startups Agency (KOSME) is turning policy finance into ecosystem infrastructure, shaping a future where Korean startups compete not on subsidies, but on scalable intelligence and global readiness.
KOSME Confirms ₩11.5 Trillion Fund to Accelerate AI, Exports, and SME Growth
The Korea SMEs and Startups Agency (KOSME) has finalized a KRW 11.5129 trillion (≈ USD 8.9 billion) budget for 2026 under its Startup and Promotion Fund, reaffirming its commitment to supporting productivity innovation, export advancement, and next-generation technology growth among Korean small and venture businesses.
The figure marks a slight 0.4% decrease from 2025, but KOSME emphasized a shift in focus from volume to structural transformation—turning policy finance into an integrated growth infrastructure that links capital, technology, and talent for sustainable global competitiveness.
Three Strategic Pillars: Productive Finance, Global Expansion, and AI Transformation
The fund will operate through three strategic pillars designed to align national financial instruments with Korea’s long-term startup policy:
- Productive Policy Finance – Focusing on direct corporate growth through targeted loans and investment-linked financing.
- Global Export Acceleration – Elevating export voucher programs and building specialized logistics infrastructure for SMEs.
- Future Growth Foundations – Expanding regional innovation, AI transformation, and human-capital development.
KOSME will allocate KRW 4.4313 trillion in policy finance, including KRW 4.0643 trillion in direct loans and KRW 367 billion in interest subsidies. The agency will prioritize sectors that generate high economic ripple effects such as manufacturing digitalization, facility investment, overseas expansion, and innovation-driven growth.
New Financing Models and the Launch of the “AX Sprint Track”
KOSME is introducing hybrid financial instruments that combine loans with investment elements to stimulate private capital inflow. These include investment-linked loans, growth-sharing loans, and scale-up financing, designed to ease private sector participation while reducing SME risk exposure.
A key addition this year is the KRW 140 billion “AX Sprint Preferential Track”, dedicated to companies pursuing AI adoption and AI Transformation (AX). Selected firms—including those under AI commercialization support programs—will receive interest rate reductions (–0.1%), expanded loan limits KRW 6B → KRW 10B), and fast-track approval to accelerate time-to-market for AI and automation technologies.
KOSME will also maintain the P-CBO (Primary Collateralized Bond Obligation) mechanism to support liquidity for promising medium-sized companies that face limitations in corporate bond issuance.
Expanding Export Support: From Vouchers to Logistics Infrastructure
To fortify SME export resilience amid global uncertainty, KOSME is increasing the Export Voucher Program budget to KRW 1.502 trillion, up KRW 226 billion from last year. The program enables SMEs to access critical export services—customs handling, marketing, and certification—through a voucher-based system available year-round.
Eligible companies may receive an additional KRW 50 million support ceiling, while those utilizing international shipping services will access up to KRW 15 million in added support.
KOSME will further expand online export logistics through KRW 17.3 billion in dedicated funding and establish new SME-exclusive logistics centers in partnership with Incheon International Airport, forming a “Smart Trade Hub” that integrates transport, customs, and distribution in a one-stop structure.
Regional and AI Talent Development: Building Korea’s Future Growth Infrastructure
KOSME will increase the Regional AI Transformation Project budget to KRW 49 billion, up from KRW 35 billion, accelerating the integration of AI solutions within local industries.
To strengthen the bridge between startups and workforce readiness, KOSME will expand its AI-specialized training ecosystem, introducing:
- Ten AI-focused university partnership departments under its contract-based programs;
- AI-specialized training centers across KOSME regional campuses (Ansan, Cheonan, Gyeongsan, Jinhae, Gwangju, Jeonju);
- e-O Dream School for AI-skilled startup workforce development;
- and the Global DeepTech Startup Academy targeting young entrepreneurs in robotics, AI, and automation.
The Jump-Up Program, which supports promising mid-sized regional firms to scale into mid-tier enterprises, will nearly double its funding to KRW 59.5 billion.
From Capital Supply to Integrated Ecosystem Support
KOSME Chairman Kang Seok-jin stated that the agency’s 2026 direction transcends traditional financing:
“This year, our focus goes beyond capital provision. We aim to comprehensively support every stage of SME and venture growth. Through integrated policy, financial, and field-based support, we will strengthen competitiveness across the ecosystem.”
Policy Finance as Korea’s Global Startup Engine
Korea’s 2026 policy finance framework signals a strategic evolution in how state-backed capital functions within the innovation economy. The fund’s design emphasizes ecosystem continuity—connecting financial support, talent development, and AI-driven transformation to global market readiness.
The Korean startup landscape is undergoing a structural shift—policy funds are evolving from temporary financial aids into long-term growth infrastructure. KOSME’s initiatives parallel strategies seen in advanced ecosystems such as Japan and Singapore, where blended finance and AI-driven public programs are used to cultivate innovation at scale.
This policy transition signals Korea’s broader ambition to move beyond its manufacturing legacy and emerge as an innovation-centered economy. Through synchronized regulatory, financial, and talent frameworks, the country is constructing a financing environment where startups can scale intelligently and compete globally.
Korea’s Policy Finance Transformation
Korea’s KRW 11.5 trillion Startup and Promotion Fund represents beyond budgetary allocation, reflecting a deliberate transformation of policy finance into an integrated growth system designed to support startups across capital, capability, and connectivity.
By embedding AI, regional innovation, and export frameworks into national financing, KOSME is effectively recoding the DNA of Korea’s startup economy, shaping it for a decade defined by intelligent industries and cross-border collaboration.
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