Issue Balancing domestic and overseas investment to prevent hollowing out of strategic industries

Summary

Korea needs a balanced domestic and overseas investment strategy to cope with the new US-led trade environment and competing strategic-sector industrial policies. The report warns that a concentration of investment in the United States under American trade and industrial pressure could weaken Korea's capacity to invest in domestic strategic industries and its competitiveness. It proposes sector-specific investment promotion that links a Mother Factory for each industry with domestic tools such as production tax incentives, infrastructure supply and strategic technology protection. A Mother Factory scheme for materials, parts and equipment would limit the ecosystem gap left as large buyer firms expand abroad. Investment incentives and capital reshoring would be redesigned, and a public and private overseas investment review council under the Prime Minister would give overseas investment strategic direction.