AI tops interest rates, tariffs as biggest business variable for SME chiefs: survey

Survey of 144 mid-sized and small company CEOs

Six in 10 cite AI as top management variable

More than half already pursuing AI transformation

A production floor at a small and medium-sized enterprise equipped with a smart factory system. The image is unrelated to the article. [The Herald]

"The market is changing so fast that we can't afford to miss new opportunities — but we can't chase every trend blindly either. Ultimately, we have to find what we do best."

The head of a mid-sized company, speaking recently, was reflecting on how AI is reshaping the business landscape. As AI spreads at an accelerating pace, how quickly a company spots and responds to new opportunities is becoming a measure not only of its competitiveness but of its CEO's management ability.

AI is emerging as the defining variable in corporate strategy for next year. Six in 10 CEOs at mid-sized and small companies ranked advances in AI technology — and the resulting shifts in industry and business models — as the single biggest factor affecting their operations, placing it above global economic conditions, interest rates, and trade and tariff policies.

According to a "2027 Business Plan" survey of 144 member-company CEOs conducted by Hunet, a corporate education firm, 61.1 percent of respondents named "advances in AI technology and changes in industry and business structure" as the variable that will have the greatest impact on corporate management in 2027, the highest share among all options.

Global economic conditions and interest rates came second at 36.1 percent, followed by changes in the domestic political and regulatory environment at 33.3 percent, shifts in consumer trends and the domestic market at 27.8 percent, and trade and tariff policies of major economies such as the United States and China at 22.2 percent. The share choosing AI was 25.0 percentage points higher than the second-place response.

AI eclipses rates, regulation as core of business planning

CEOs' attention to AI extended well beyond forecasting the business environment. When asked what they would prioritize most in drawing up next year's business plans, "AI and technological change" again topped the list at 47.2 percent.

The domestic economic and policy environment came second at 44.4 percent, while the global economic and industry outlook and CEO-level management strategy each drew 38.9 percent. Talent acquisition and organizational management stood at 30.6 percent, and industry, market and consumer trends at 27.8 percent.

AI is also set to feature prominently in companies' actual business plans for next year. Asked how much AI would be reflected in their 2027 business plans, 41.7 percent said they would incorporate it into "major business and management strategies," while 22.2 percent said it would serve as a "core strategy" — together accounting for 63.9 percent. Another 19.4 percent said AI would be reflected in major operations, and 13.9 percent said it would be applied in a limited way to some tasks. Only 2.8 percent said AI would not be reflected in their business plans at all.

AI adoption on the ground is also accelerating. A recent report by the Korea Research Institute for Vocational Education and Training, based on an analysis of about 110,000 corporate observations, found that the AI utilization rate among domestic companies of a certain size rose from 1.4 percent in 2017 to 9.2 percent in 2024 — roughly a 6.5-fold increase. The pace has steepened in recent years, climbing from 4.3 percent in 2022 to 6.1 percent in 2023 and 9.2 percent in 2024.

Among companies already using AI, product and service development was by far the most common application, cited by 59.3 percent of AI-adopting firms as their primary use. Organizational management accounted for 11.6 percent, production processes for 10.5 percent, marketing strategy for 10.1 percent, and sales for 8.5 percent.

More than half of CEOs already pursuing AI transformation

More than half of the companies surveyed are already pursuing AI transformation, or AX. Some 38.9 percent of respondents said their companies are pursuing AX in some business units or divisions, while 19.4 percent said they are doing so company-wide — together reaching 58.3 percent.

Another 22.2 percent said they are still considering it, while 16.7 percent said they have no plans yet and 2.8 percent said they do not see the need.

Meanwhile, CEOs were relatively optimistic about next year's economic outlook. When asked about South Korea's growth prospects for 2027, 47.2 percent said the economy would grow and 27.8 percent said it would hold steady — meaning 75 percent expect growth or stability. Some 22.2 percent predicted a contraction, while 2.8 percent said the outlook was too difficult to predict.

"This survey confirmed that AI has grown increasingly important, cementing its place not just as a technology trend but as a core variable shaping business plans and management strategy," a Hunet official said. "For 2027 business planning, companies will need to go beyond simply adopting AI and think deeply about how AI will transform their businesses and business models."

boo@heraldcorp.com