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APEC Project Database

Project Title

Empower SMEs through AI Adoption: Unlock Growth Potential with Innovative AI Applications

Project Year

2025

Project Number

SMEWG_102_2025A

Project Session

Session 1

Project Type

Standard

Project Status

Project in Implementation

Project No.

SMEWG_102_2025A

Project Title

*
Empower SMEs through AI Adoption: Unlock Growth Potential with Innovative AI Applications

Project Status

Project in Implementation

Fund Account

*
APEC Support Fund

Sub-fund

ASF: Digital Innovation

Project Year

2025

Project Session

*
Session 1

APEC Funding

78,062

Co-funding Amount

124,100

Total Project Value

202,162

Sponsoring Forum

*
Small and Medium Enterprises Working Group (SMEWG)

Topics

Micro, Small and Medium Enterprises; Digital Technology and Innovation

Committee

SOM Steering Committee on Economic and Technical Cooperation (SCE)

Other Fora Involved

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Chinese Taipei

Co-Sponsoring Economies

Australia; Brunei Darussalam; Canada; Chile; Indonesia; Japan; Korea; Malaysia; Peru; Philippines; Singapore; Thailand; Viet Nam

Expected Start Date

01/12/2025

Expected Completion Date

31/12/2026

Project Proponent Name 1

Isan Chung

Job Title 1

Section Chief

Organization 1

Small and Medium Enterprise and Startup Administration

Telephone 1

+886223662251

Email 1

Project Proponent Name 2

Lillian Chen

Job Title 2

Assistant Research Fellow

Organization 2

Taiwan Institute of Economic Research (TIER)

Telephone 2

+88622366 2235

Email 2

Declaration

Isan Chung

Project Summary

This initiative seeks to pave the way for SMEs to unlock their growth potential by comprehending innovative AI applications and expanding AI adoption. It will focus on enhancing SMEs' understanding of AI application scenarios and related capabilities, driving operational efficiency, and bolstering competitiveness across economies.

Aligned with the innovation and digitization priorities outlined in the APEC Putrajaya Vision 2040, the project also supports the APEC SMEWG Strategic Plan 2025-2028, which stresses the importance of expanding SMEs' digital transformation capabilities, including through emerging technologies like AI.

As for outputs, Chinese Taipei plans to host an event in Taipei no later than July 2026, and produce a report that includes pre-event research and case studies on SMEs' use of AI and capacity-building efforts by October 2026. The project implementation, including the event preparation, will engage experts from the public and private sectors in the APEC region.

Relevance

Region

In response to the global rise of AI applications, businesses are accelerating their adoption of AI technologies to enhance work efficiency, foster creative thinking, and strengthen digital competitiveness. According to McKinsey’s 2024 report, 72% of surveyed companies indicate they have adopted AI, and 65% regularly deploy generative AI in at least one business function. In the APEC region, MSMEs, which make up the majority of businesses, play a pivotal role in advancing global digitalization. APEC economies have been proactive in raising awareness among MSMEs about digital technologies and AI, while supporting their integration of innovative solutions to meet the rapidly evolving demands of the market.

However, according to IBM's report, 40% of enterprises are currently exploring or experimenting with AI but have not deployed their models. The lack of AI skills, expertise, or knowledge hinders enterprises from successfully adopting AI. Due to the varying economic and social landscapes across APEC economies, SMEs encounter knowledge and technical barriers when navigating AI application scenarios. This initiative seeks to address these challenges by sharing practical digital and AI solutions, and promoting best practices to deepen SMEs’ understanding of AI and enhance their ability to apply AI techniques accordingly. Moreover, the dissemination of these outcomes is intended to stimulate collaboration and innovation among APEC member economies, driving digital transformation and AI adoption throughout the region.


Eligibility and Fund Priorities

This initiative aligns with the eligibility and priority areas of the Digital Innovation Sub-Fund. Its primary goal is to promote the adoption of AI solutions among SMEs through practical implementation, helping them gain a deeper understanding of AI’s

proven and potential applications. This approach drives innovation and the adoptionof digital technologies and services, while enhancing the inclusiveness of the digital economy, thus meeting the criteria of the Digital Innovation Sub-Fund related to APEC economies’ capacity building, sustainable development, and inclusive growth.

Additionally, this project aligns with the objectives outlined in the APEC Internet and Digital Economy Roadmap, specifically in "encouraging and facilitating greater participation of businesses, especially SMEs, in global commerce," and "enhancing cooperation between the public and private sectors."


Capacity Building

Capacity-building goal: The primary objective of this initiative is to enhance SMEs’ understanding, techniques, and application of AI technologies within the APEC region, particularly in developing economies. It aims to stimulate discussions and the sharing of successful practices and policy instruments, and address AI disparities across APEC economies.

Capacity-building purpose: The focus of this initiative is to present essential AI use cases that can be integrated into SMEs' business operations, including those of women-led SMEs and startups, enabling their participation in the global value chain in a sustainable manner.

Capacity-building principles: The project adheres to the "Needs/opportunities driven" principle outlined in Appendix K of the Guidebook on APEC Projects (Edition 16). As highlighted in the SMEWG Strategic Plan 2025-2028, the objective under Priority Area 4 Digitalization—"Increase MSME capacity for digital transformation, including through new technologies such as AI"—provides guidance for specific digital tool applications.

Objectives

The objective of this initiative is to enhance SMEs' understanding and adoption of AI, enabling them to drive digital transformation, optimize operations, and strengthen competitiveness. This will be achieved through one event and a concise report that provide insights into AI applications, best practices, and capacity-building strategies. Additionally, the initiative aims to foster greater collaboration between the public and private sectors on AI policies and solutions, supporting SMEs in integrating AI into their product development and service delivery processes.

Alignment

APEC

This initiative is closely aligned with the "Putrajaya Vision 2040" and the key priorities highlighted in the 2024 APEC Leaders' Declaration and Joint Ministerial Statement, particularly under the area of "Empower." It also supports the 2025 APEC theme, "Innovate," by addressing its priority areas, such as " Broadening the horizon for the use of digital technology, including AI "


Forum

This initiative leverages a public-private partnership pattern to drive digital innovation and strengthen SMEs' capabilities in AI applications. The deliverables of the initiative align with the vision outlined in the APEC SMEWG Strategic Plan for 2025–2028, which prioritizes capacity building, development, and innovation for SMEs. In particular, it corresponds to the priority area of Digitalization—"Increase MSME capacity for digital transformation, including through new technologies such as AI." Moreover, the initiative supports the core objectives of the "2024 APEC SME Ministerial Meeting Pucallpa Statement," which underscores the need to accelerate SMEs’ digital transformation, particularly through programs that promote digital and entrepreneurial skills.

Beneficiaries and Outputs

Output


1) 1-Day Conference

The one-day conference in Taipei, being held no later than July 31 2026, aims to promote the policy measures and best practices on how to unleash SME growth potential through innovative AI applications. Chinese Taipei is committed to designing a content-rich agenda that also allows ample time for interaction and exchange, ensuring optimal outcomes through effective use of both APEC funding and self-funded resources. The draft agenda is aligned with the objectives of the project and the session is designed as follows, which may include: (1) Deepening SMEs' understanding of AI knowledge and its application scenarios; (2) Facilitating exchange of AI policies and solutions for SMEs; (3) Promoting AI adoption among SMEs; (4) Strengthening SMEs' practical capabilities in AI applications through applied learning.

Representatives from the public sector and stakeholders from the private sector, including multinational corporations, SMEs, and start-ups, will share their experiences in leveraging digital innovation and AI applications to drive development across the APEC region. Speakers and experts recommended by member economies will be invited to provide insights, demonstrate their practices, and share relevant experiences.

The selection criteria for speakers/experts may include: 1) Representatives from associations in developed and developing economies that actively promote SME development through AI adoption; 2) Representatives from pilot enterprises with practical experience in integrating AI into their products and services; 3) Representatives from academia with in-depth knowledge of digital technology trends, AI applications, and SME transformation; 4) Representatives from the public sector with substantial experience in collaborating with the private sector to empower SMEs in adopting digital technologies, including AI, to enhance business operations.

Each session is expected to be delivered by different speakers. Chinese Taipei will integrate experts from various fields, utilizing both APEC funding and self-funded resources, to enrich participants’ understanding of diverse applied cases. Meanwhile, ample time will be reserved for Q&A and discussions in each session to foster interaction between speakers and participants, facilitate knowledge exchange, and support the dissemination of key insights.

The anticipated participants are expected to represent the following types of enterprises:

1) Enterprises in the manufacturing sector committed to improving efficiency, reducing costs, and strengthening operational resilience through digital and AI technologies; 2) Enterprises in the commercial services sector focused on enhancing customer experience, operational efficiency, and market competitiveness.

Participants may include employees, business owners, or managerial officials responsible for strategic planning and operations management. The APEC Non-Member Participation Guidelines will apply to this event. To ensure the quality and attendance rate of the event, regular consultations will be conducted with the Program Director (PD), and a General Information Circular will be disseminated to member economies to invite recommendations for potential speakers and participants. In addition, recognizing female entrepreneurs as a primary target audience for this event, the drafting of the agenda will appropriately incorporate gender perspectives.

A post-event survey will be conducted to collect participants’ feedback and assess the quality of the event. The survey will include, but not be limited to, questions addressing the three outcomes listed in Item 11 on Monitoring and Evaluation. Furthermore, the survey will ask participants to identify or write down best practices or recommendations related to the application of AI and digital innovation that they consider most relevant and applicable to their own economies.


2) Research Report

The report will be distributed as an APEC publication with a minimum of 20 pages excluding annexes. Its target audience will include startups and SMEs seeking practical insights into AI adoption, women entrepreneurs aiming to enhance their digital competitiveness, and public sector officials responsible for SME development and innovation policies. Additional target audiences will include corporations, industry associations, and employees receiving on-the-job training in related fields. It will highlight the value and strategic importance of AI applications across different business transformation processes. In addition, considering that many SMEs face the need to adopt AI technologies as part of their digital transformation, understanding how to select appropriate AI solutions and implement internal adoption processes has become a crucial capability for enhancing SME competitiveness.

The report will employ inductive analysis to collect three to five best practices of AI applications and extract essential factors in successful business models and policy instruments for promoting AI adoption among SMEs. Sources for these best practices may include research conducted by the project team, consultations with expert networks, empirical cases from member economies, and discussions from the event. SMEs are expected to benefit from the application of these best practices and adoption experiences.

The preliminary structure and chapters of the report are designed as follows: Chapter 1: Introduction; Chapter 2: Best Practices of AI Applications; Chapter 3: Analysis and Findings; Chapter 4: Conclusion and Recommendations.

The analysis will also draw on sources including, but not limited to, studies related to AI adoption strategies, SME digital transformation, and research by international organizations such as the United Nations (UN), International Monetary Fund (IMF), Asian Development Bank (ADB), Organisation for Economic Co-operation and Development (OECD), World Bank, and APEC member economies.

The report is expected to disseminate the collected best practices and knowledge from member economies, supporting SMEs in building long- term strategic capacity for AI adoption.


Outcome

1) Disseminated knowledge of AI adoption: The project will drive the widespread enhancement of understanding and application of AI technologies among SMEs in the APEC region. By providing guidance and best practices through an event and a report, the project will support SMEs in identifying feasible AI use cases and adoption strategies that match their operational needs. This will result in the dissemination of knowledge on how AI can optimize business operations, product development, and service delivery. It will also help SMEs differentiate their offerings and enhance market competitiveness. Overall, this outcome directly contributes to the project objective of promoting best practices and deepening SMEs' understanding of AI adoption.

2) Enhanced capacity of developing AI solutions and strategies: The project will strengthen the development of practical AI adoption strategies for SMEs across the APEC region. SMEs often encounter difficulties in selecting suitable AI solutions and managing internal implementation processes. Through applied learning activities, participants will gain insights from successful case studies and acquire the knowledge necessary to plan and implement AI solutions effectively. This outcome is expected to accelerate the adoption of AI technologies among SMEs.

3) Strengthened collaboration and networks: The project will foster collaboration and partnerships among SMEs, industry stakeholders, academia, and policymakers on AI-related issues. Through the project’s activities and outputs, SMEs will have opportunities to engage with stakeholders from industries, institutes, and government agencies, facilitating dialogue on AI policies, solutions, and best practices. Strengthened collaboration and expanded networks, including public-private partnerships, will enhance the inclusiveness and strategic relevance of the project, and support long-term efforts to promote AI adoption among SMEs.


Beneficiaries

Direct beneficiaries:

  1. Startups and SMEs: These enterprises will gain crucial knowledge of the latest AI technologies and industry best practices, enabling them to implement AI solutions effectively. This will enhance their operational efficiency, foster innovation, and increase their competitiveness and resilience in the digital economy.
  2. Female Entrepreneurs: Female entrepreneurs, who play a key role in driving AI applications and digital transformation, will benefit from this initiative by gaining access to up-to-date AI knowledge and practical tools. This will open new business opportunities for them, fostering a more inclusive business environment.
  3. Public Sector: Officials responsible for SMEs and economic affairs across various economies will receive valuable insights into AI policy development and implementation. This knowledge will support the creation of adaptive AI policies at the local level, aiding in the digital transformation and competitiveness enhancement of SMEs.


Secondary beneficiaries:

Corporations, industry associations, startups, SMEs, and on-the-job training employees in relevant fields will benefit from consulting the project’s APEC research report, even if not directly involved.

Dissemination

Research Report:

The report will collect three to five best practices of AI applications and, through inductive analysis, extract essential factors involved in successful business models and policy instruments that facilitate AI adoption among SMEs. The report will be a minimum of 20 pages excluding annexes, and will be published as an APEC Publication. The report will consist of four chapters: Introduction, Best Practices, Analysis and Findings, and Conclusion and Recommendations. In addition to being disseminated through the SMEWG contact list, the project team will also send the report to the aforementioned primary and secondary beneficiaries.

Gender

Please see Project Proposal in Supporting Documents folder.

Work Plan

Please see Project Proposal in Supporting Documents folder.

Risks

Please see Project Proposal in Supporting Documents folder.

Monitoring and Evaluation

Please see Project Proposal in Supporting Documents folder.

Linkages

This initiative aligns with the "APEC Cross-fora Cooperation Guidelines." As the project seeks funding from the Digital Innovation Sub-fund, DESG will serve as an appropriate forum for consultation, particularly for recommending speakers and experts.

Additionally, APEC AI Initiative drafting and its endorsement are on the priority list of the APEC workplan in 2025. This project’s implementation will have interoperability with the APEC AI Initiative in the coming year(s), which will enhance MSMEs’ digital capacity.

Sustainability

The research report will be disseminated through various platforms to maximize its accessibility and impact among both direct and indirect beneficiaries. They will be able to access the report and related resources as needed, not only to reflect on the insights and experiences gained from previous project activities, but also to inspire new initiatives in project development and policydesign.

Possible next steps may include 1) integrating key lessons and findings into the planning and implementation of future projects; 2) maintaining knowledge sharing through existing communication channels, such as projects delivered research report;

3) encouraging APEC economies to integrate what they have learned from this project into the formulation of strategies that promote AI adoption among SMEs, thereby aligning with the purpose of dissemination and promoting long-term sustainability. Also, based on the mailing list which will be conducted for delivering workshop materials, a collaborative communication channel can be formed to ensure the knowledge exchange and transfer can continue even after the project concludes.

Direct Labour

Please see Project Proposal in Supporting Documents folder.

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Project No.
Project Title
Project Status
Fund Account
Sub-fund
Project Year
Project Session
APEC Funding
Co-funding Amount
Total Project Value
Sponsoring Forum
Topics
Committee
Other Fora Involved
Other Non-APEC Stakeholders Involved
Proposing Economy(ies)
Co-Sponsoring Economies
Expected Start Date
Expected Completion Date
Project Proponent Name 1
Job Title 1
Organization 1
Telephone 1
Email 1
Project Proponent Name 2
Job Title 2
Organization 2
Telephone 2
Email 2
Declaration
Project Summary
Relevance
Objectives
Alignment
Beneficiaries and Outputs
Dissemination
Gender
Work Plan
Risks
Monitoring and Evaluation
Linkages
Sustainability
Direct Labour
Are there any supporting document attached?
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Secretariat Comments
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