![Han Sung-sook, minister of the Ministry of SMEs and Startups, is being named as one of three candidates for the next prime minister on Thursday, the day the June 3 local election results were finalized. Analysts say ministry programs that depend on local government cooperation have moved into a "positive influence" zone following the election results. [Ministry of SMEs and Startups]](https://wimg.heraldcorp.com/news/cms/2026/06/04/news-p.v1.20260604.7ac0286f7882496fa4631f35d503c405_P1.jpg)
June 3 vote reshapes regional leadership landscape
Local currency, smart factories, regional industry programs set to accelerate
Han Sung-sook as prime minister? Key agenda could shift to PM's office if realized
The June 3 local elections broadly reshuffled the balance of power among regional governments, prompting speculation that Ministry of SMEs and Startups programs with a local footprint could gain new momentum. The programs most likely to feel the effect include local currency schemes, smart factory support and region-specific industry development. All three require local governments to match funding, secure sites and provide administrative coordination, so analysts say they could move faster under incoming leadership.
With vote counting underway Thursday morning, Democratic Party of Korea candidates appeared certain to win or held clear leads in most metropolitan and provincial governor races, with the exception of Seoul, South Gyeongsang Province and Daegu. The outcome marks a sharp shift from the 2022 local elections, when the People Power Party swept 12 of 17 regional government seats. The change means more regions are now likely to align politically with the central government, potentially smoothing policy coordination.
Local currency is the first program analysts cite. It is one of the clearest expressions of the Lee Jae Myung administration's and the Democratic Party's regional economic identity. President Lee championed the concept as Seongnam mayor — paying youth dividends in local currency — and continued pushing for its expansion as Gyeonggi Province governor and in national politics. Officially called "local love gift certificates," the program is issued by municipal governments and redeemable at registered merchants within each jurisdiction. Local budget matching, issuance volume, discount rates, merchant registration and crackdowns on fraudulent circulation all hinge on local government administration.
The Ministry of Interior and Safety allocated 1.15 trillion won (about $759 million) this year to support local love gift certificate issuance — more than the 1 trillion won included in this year's supplementary budget. Even as the central government increases its contribution, the real impact residents feel depends on how much each local government adds from its own coffers, when it issues the certificates, and how tightly it links the program to commercial districts dense with small businesses.
Smart factory support is another Ministry of SMEs and Startups program likely to be shaped by the change in local leadership. The ministry has promoted smart factory adoption to help small and medium-sized manufacturers digitally transform and raise productivity. It recently launched a smart manufacturing workforce development program, selecting roughly 480 high-performing smart manufacturing companies and training more than 600 specialists. The broader trend is a shift from simple equipment subsidies toward workforce development, data utilization and AI integration on the factory floor.
Region-specific smart factories depend heavily on local government cooperation. The program pairs the ministry's smart factory construction support with local governments' region-specific industry development funding to address local economic challenges. In 2025, three provinces — North Gyeongsang, South Jeolla and North Jeolla — participated, with the ministry providing 2 billion won per region for a total of 6 billion won. Local governments matched that with 10.4 billion won in local funds, bringing total investment to 16.4 billion won.
Local government heads play a decisive role in how smart factory programs are executed. Decisions about which industries to designate as regional specialties, which companies in industrial complexes to prioritize, and how to coordinate technoparks, industrial complex authorities, chambers of commerce and regional universities all fall within the governor or mayor's authority. Even under the same national program, beneficiaries and outcomes can vary significantly depending on whether a region's industrial strategy centers on food processing, agri-biotech, machinery, shipbuilding components or semiconductor materials and parts.
"Legend 50+," a region-specific industry development program, also falls within the orbit of the shifting local power landscape. Local governments nominate high-growth companies tied to their key industries, and the ministry provides coordinated support covering smart factory construction, exports, commercialization, workforce and consulting. In 2026, a total of 49.5 billion won will be channeled across five support categories to 1,840 companies nominated and selected from all 17 cities and provinces nationwide.
A potential wildcard is the possibility that Minister Han Sung-sook could be appointed the next prime minister. Han, a first-generation IT specialist and former chief executive of Naver, has made small business recovery and the digital and AI transformation of small and medium-sized enterprises her central priorities since taking office. If the prime minister speculation materializes, the digital transformation and smart manufacturing initiatives she has driven from the ministry could move to the prime minister's office, where she would oversee and coordinate them at a higher level. A ministry official said, however, that the prime minister speculation surrounding Han was "something we have absolutely no knowledge of."
hong@heraldcorp.com
