Insights

Following Lee Jae-myung's election victory on June 3, 2025, with political and economic uncertainty resolved, the new administration's economic and industrial policy direction has emerged as a major variable for corporate strategy.

Samjong KPMG Economic Research Institute's report condenses the new administration's governing philosophy into eight keywords — “J.M.N.O.M.I.C.S” (Jobs, Market, New-Tech, Outlay, Mutual, Investment, Climate, Supply Chain) — and interprets five national goals, 123 policy tasks, and 564 execution tasks across major industries.

Government-led growth and expansive fiscal policy are the core stance. Unlike the prior two administrations, the 21st Lee Jae-myung government foregrounds “government-led growth” and “aggressive fiscal policy.” Alongside expanded fiscal spending for livelihood stability, national-level investment and nurturing policies for the ABCDE value chains of advanced industries (AI, semiconductors, batteries, biotech) are the core. K-Culture has KRW 300 trillion in market size as an explicit policy target, and defense is being elevated as a national-flagship industry with the goal of joining the top four global defense powers.

Capital-market sophistication and corporate-governance reform: institutionalizing Value-Up. The new administration is pursuing corporate-governance reform and Value-Up policies to address the Korea Discount. Key agenda items include strengthening board independence and diversity, upgrading audit committee functions, and reorganizing defense mechanisms with treasury-share retirement in mind. The institutional integration of digital assets is also being pursued, laying the legal foundation for related industry ecosystems.

Industry impact: dual sides of opportunity and risk. AI and semiconductors will see a favorable environment from next-generation R&D support. Shipbuilding faces the dual challenge of competitive deterioration and the green transition, while energy is expected to see faster investment cycles as renewable transition accelerates. Foodservice will face inevitable changes in revenue structure if delivery-app regulation is introduced, and construction urgently needs recovery and stabilization. Finance must balance the tension between stricter household-debt management and stimulating stock-market vitality.

What this means for M&A. The five business response directions implied by “Lee Jae-myung-nomics” connect directly to M&A opportunities. First, the public infrastructure and advanced-industry projects spawned by expansive fiscal policy will lift related companies' valuations and increase their attractiveness to strategic investors. Second, with reinforced corporate-governance reform and Value-Up policies pressuring shareholder-centric decision-making structures, more companies are likely to consider control restructuring, splits, or mergers. Third, supply-chain internalization policies (Materials/Parts/Equipment 3.0, reshoring) will stimulate demand for bolt-on acquisitions to domesticate critical items — particularly highlighting materials and component firms within the ABCDE value chains.

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