The Impact of Innovation Voucher on Digital Transformation in SMEs: The Case of AI Voucher in Korea

As digital transformation reshapes the innovative landscape, many small and medium-sized enterprises (SMEs) seek to adopt new technologies to cope with the dynamic environment. To address everlasting issues of insufficient capital and knowledge of SMEs and promote their growth, innovation vouchers have been introduced as a policy intervention to fill this gap by facilitating collaboration and knowledge sharing. This study aims to examine the impact of innovation vouchers on the financial growth of SMEs, focusing on the Korean case of artificial intelligence (AI) innovation vouchers introduced in 2020 to accelerate digital transformation through AI technology adoption. For the analyses, financial statements and an AI innovation voucher applicant list werecollected from three databases. Using propensity score matching (PSM) to address selection bias, this study analyzes data from 663 AI voucher applicants to examine the effects of innovation voucher on SMEs’ financial growth in terms of the compound annual growth rate. The results showed that AI voucher beneficiaries experienced significantly higher growth in net profits compared to non-beneficiaries. Further analysis across different SME growth stages revealed that early-stage firms (1-3 years) saw improvements in net profits, mid-stage firms (4-5 years) showed growth in both net and operating profits, and late-stage firms (6-7 years) demonstrated increases in sales and operating profits. However, no significant differences were found for maturing stage firms (8+ years). These findings suggest that AI innovation vouchers contribute positively to SMEs’ financial growth, particularly in profitability metrics for younger firms. The vouchers appear to assist SMEs in implementing AI solutions into their business models, leading to improved profitability and sales growth. The study provides empirical evidence supporting the effectiveness of innovation voucher programs in stimulating SMEs’ innovation activities and financial growth. Policy implications highlight the importance of tailoring support to different SME growth stages, expanding the scope of innovation vouchers, creating more market-oriented programs, and encouraging broader participation from SMEs and relevant institutions to maximize the benefits of such initiatives in fostering digital transformation and sustainable growth among SMEs.