Week 1 HW: Principles and Practices

title: “HTGAA Week 1 Homework: Governance Strategy for Mycelium Fabric Project” date: 2024-02-11 draft: false

1. Project Description

Research Focus
Investigating the patina mechanism of mycelium derived from Rhizopus strains extracted from Nuruk, a traditional Korean alcohol fermentation starter.

Purpose
This project aims to bridge traditional Korean fermentation knowledge with modern biomaterial innovation, creating sustainable fabric alternatives while preserving cultural heritage.

2. Governance and Policy Goals

Goal 1: Strengthening Cross-Industry Connections and Market Ecosystem Development

Sub-goal 1-1: Connecting Traditional Fermentation Industry with Advanced Biomaterial Industry

Currently, traditional Nuruk manufacturers have potential as strain suppliers but lack connections to the biomaterial industry. We need to establish technology transfer programs, education initiatives, and matching platforms so traditional fermentation workers can participate as strain suppliers or early-stage producers. This transforms traditional knowledge into economic value for modern industries.

Sub-goal 1-2: Strengthening Connections Between Mycelium Material Producers and Fashion Industry

Early-stage mycelium material producers (bio-startups, research labs) lack price competitiveness due to small-scale production. Fashion brands hesitate to adopt these materials due to unstable supply and insufficient quality verification. The government should act as an intermediary to ease cost burdens across production-distribution-consumption stages, providing business matching platforms and pilot adoption support. Like the early aviation industry’s patent pool, this collaborative structure enables industry-wide growth.

Goal 2: Ensuring Environmental Impact Transparency and Preventing Greenwashing

Sub-goal 2-1: Quantitative Measurement and Disclosure of Life Cycle Environmental Data

Currently, mycelium materials are marketed as eco-friendly without standardized systems to verify actual environmental impacts like strain cultivation energy, carbon emissions, water usage, and biodegradation rates. We need ISO 14025-based Environmental Product Declaration (EPD) certification to quantitatively measure and disclose environmental data across production-use-disposal stages, allowing consumers to verify actual environmental performance. Like the PLA bioplastic case where industrial composting requirements were revealed too late, comprehensive pre-verification systems are crucial.

Sub-goal 2-2: Monitoring Ecosystem Impact of Microbial Residue After Biodegradation

When mycelium fabric products are disposed of and enter soil or water systems, we must track and manage the strain’s impact on local microbial communities. Even though Rhizopus is common in nature, mass-produced specific strains released in concentration could disrupt local ecosystem balance. Like aquaculture discharge altering marine microbial communities, industrial-scale biomaterial disposal requires environmental monitoring. EPD certification processes should collect and disclose this data to ensure long-term environmental safety.

3. Governance Measures

A. Open Mycelium Material Research Consortium

Actors
Universities, corporations, non-profit organizations, government research institutions

Purpose
Since this is an emerging research field in South Korea, individual university or corporate labs might duplicate investments or lack networks and information. We need to build a mycelium network based on Korean traditional strains (not just Nuruk), establishing platforms for sharing basic research results and data.

Design
Universities (basic research) → Startups (application) → Korea Research Institute of Bioscience and Biotechnology (coordination) → Ministry of SMEs and Startups (funding)

Budget

• Government R&D budget (approximately 5 billion KRW over 3 years)
• Participating company membership fees

Implementation

• Biannual workshops
• GitHub-style freely accessible research data sharing platform
• Core strain-related patents jointly owned with license revenue distribution when used in industry

Assumptions

• Companies may avoid participation due to trade secret concerns
• Free-rider problems with latecomers
• Lack of consortium management experience
• Difficulty reaching consensus on profit distribution formulas

Failure/Success Scenarios

• Failure: Becomes formality, budget consumed without substantial cooperation
• Success (risk): Consortium becomes cartelized, excluding new entrants; specific companies seize control

B. Environmental Product Declaration (EPD) Certification System for Mycelium Materials

Actors
Ministry of Environment, Korea Environmental Industry & Technology Institute, manufacturing companies, certification agencies

Purpose
Currently in South Korea, mycelium materials are marketed as eco-friendly without standardized systems verifying actual life cycle (production-use-disposal) environmental impacts. Companies arbitrarily claim bio-based or biodegradable properties, causing consumer confusion and greenwashing concerns. We need to develop ISO 14025-based EPD certification specialized for mycelium materials, quantitatively evaluating carbon emissions, water usage, strain cultivation energy, biodegradation rates, and microbial residue upon disposal, then attaching labels to products.

Design
Ministry of Environment (certification standard setting and system operation) → Korea Environmental Industry & Technology Institute (EPD issuance and verification) → Manufacturing companies (self-data collection and certification application) → Third-party certification agencies (on-site inspection and verification)

Budget

• Government initial certification system construction (approximately 1 billion KRW, year 1)
• Company certification application costs (5-10 million KRW per case)

Implementation

• EPD certification application before product launch (optional, initial 3 years)
• Certified products receive bonus points in public procurement
• Online platform allows consumers to compare environmental data by product

Assumptions

• Difficulty applying single evaluation criteria due to mycelium material diversity (construction materials, packaging, fashion materials)
• SMEs/startups lack data collection capacity (e.g., LCA expert hiring costs)
• Scientific methodologies for quantifying environmental impact of strain residue after biodegradation not yet established
• Uncertainty about international standard compatibility (possible double certification burden for exports)

Failure/Success Scenarios

• Failure: High certification costs mean only large corporations participate, startups disadvantaged with non-certified products; becomes formalistic paperwork with no real environmental improvement (like energy efficiency rating inflation)
• Success (risk): Certification misunderstood as absolute eco-friendliness, justifying consumption promotion (may actually just be “less bad”); existing plastic/textile industries lobby to weaken standards, reducing effectiveness

C. Regulatory Sandbox and Fast-track Approval for Mycelium Material Startups

Actors
Ministry of SMEs and Startups, Ministry of Food and Drug Safety, Ministry of Environment, startups, university research labs

Purpose
Currently in South Korea, products using mycelium materials (e.g., food contact packaging, cosmetic containers) don’t clearly fit existing regulatory categories, making approval procedures unclear. Startups struggle with confusion over whether they fall under food container regulations or chemical substance regulations, delaying market entry. For safety-verified traditional fermentation-derived strains (e.g., Nuruk Rhizopus), we should allow proof-of-concept testing through regulatory sandboxes, permit small-scale market launches for a set period (e.g., 2 years), then collect real-use data to streamline formal approval procedures.

Design
Ministry of SMEs and Startups (sandbox operation oversight) → Related regulatory agencies (Ministry of Food and Drug Safety, Ministry of Environment, etc. - field-specific review) → Startups (application and data submission) → Universities/research institutions (safety verification consultation)

Budget

• Government sandbox operation and monitoring costs (500 million KRW annually)
• Startup proof-of-concept costs (50% government R&D matching fund support)

Implementation

• Biannual sandbox recruitment (10 selected companies)
• Approved companies receive temporary sales permits, must submit sales volume, consumer feedback, environmental monitoring data
• After 2 years, formal approval review period shortened 50% (typically 6 months → 3 months)

Assumptions

• Ambiguous scope of safety-verified strains (Nuruk Rhizopus OK, but what about makgeolli yeast? Doenjang mold?)
• Unclear liability if unexpected allergic reactions occur during sandbox period
• Unknown whether startups can actually generate revenue through sandbox (consumer acceptance)
• Concerns that large corporations might use startup sandbox data to later dominate market

Failure/Success Scenarios

• Failure: Opaque sandbox selection process favors specific company/university networks; temporary permits leading to formal approval failures cause startup bankruptcies and consumer trust collapse
• Success (risk): Fast-track abuse creates precedent of inadequate safety verification (other biomaterials demanding quick approval claiming traditional origins); early-entry companies become vested interests, lobbying for stricter sandbox qualification requirements for later entrants

D. Cross-Industry Linkage and Market Entry Support Policy for Mycelium Materials

Actors
Ministry of Trade, Industry and Energy, Ministry of SMEs and Startups, Ministry of Agriculture, Food and Rural Affairs, Fashion Industry Association, textile distribution companies

Purpose
Currently in South Korea, connections between mycelium material producers (bio-startups, research labs) and end users (fashion brands, textile companies) are severed. Producers lack price competitiveness due to small-scale production; fashion companies hesitate to adopt due to unstable supply and insufficient quality verification. Distribution channels are also inadequate, making market entry difficult for both sides. Government should build cross-industry linkage platforms and provide support policies to ease cost burdens across initial production-distribution-consumption stages, creating a mycelium fabric industry ecosystem.

Design
Ministry of Trade, Industry and Energy (cross-industry matching platform operation and policy oversight) → Ministry of SMEs and Startups (production company facility and scale-up support) → Ministry of Agriculture, Food and Rural Affairs (connecting traditional fermentation industry with biomaterial industry) → Fashion Industry Association (demand company discovery and testbed operation) → Textile distribution companies (distribution network construction and logistics support)

Budget

• Government cross-industry linkage support budget (3 billion KRW annually)
• Production facility subsidies (max 500 million KRW per company, 10 companies annually)
• Fashion brand pilot adoption support (max 100 million KRW per brand, 20 brands annually)
• Distribution infrastructure construction costs (2 billion KRW over 3 years)

Implementation

• Mycelium material producer-fashion brand matching platform operation (quarterly business matching days)
• 50% subsidy for facility investment to convert small-scale to mass production
• 30% support for raw material purchase costs when fashion brands introduce mycelium materials in pilot collections
• Collaborate with textile distribution companies to build mycelium material-dedicated distribution channels and support logistics costs
• Operate technology transfer and education programs enabling traditional Nuruk manufacturers to participate as strain suppliers

Assumptions

• Matching platform may not lead to actual transactions (mismatched needs)
• Companies may return to conventional materials after subsidy support ends
• Major fashion brands may only take subsidies without actual commercialization
• Distribution channels built but inventory accumulates without final consumer demand
• Traditional fermentation industry workers lack capacity to enter biomaterial industry

Failure/Success Scenarios

• Failure: Only government budget invested with formal-level industry linkage; subsidy-dependent companies emerge with no self-sustaining structure; matching platform becomes performance-oriented exhibition with no actual business deals
• Success: Mycelium materials stably established in fashion industry, forming self-sustaining market without government support; traditional fermentation industry secures new revenue sources, simultaneously preserving cultural heritage and achieving economic benefits
• Success (risk): Companies become overly dependent on government support, causing industry-wide contraction when subsidies end; specific large distribution networks monopolize market, weakening small producer bargaining power

5. Priority Governance Strategy and Rationale

Priority Selection: Combination A + D

Rationale for Selection

1. Scoring Logic
Options A and D scored 1 point in “Does not hinder research” and “Encourages constructive use” - the most critical indicators for an emerging industry.

2. Goal Alignment
Directly achieves Goal 1 (strengthening cross-industry connections). Consortium forms ecosystem; industry linkage promotes actual transactions.

3. Structural Limitations of Korean Bureaucracy
Different ministries handle fermentation industry (Ministry of Agriculture), biotech (Ministry of Science), and fashion (Ministry of Trade) separately. Options A and D allow government to provide budgets while field stakeholders lead operations.

Trade-offs of This Choice

1. Risk of Deprioritizing B
Lack of early greenwashing verification. Unfounded eco-friendly marketing possible. Industry-wide trust loss if problems occur.

2. Problems with Excluding C
Startup regulatory ambiguity persists. Consortium self-guidelines of uncertain effectiveness.

3. Priority Compromise
Industry ecosystem (Goal 1) prioritized over environmental transparency (Goal 2). Choice between short-term rationality and long-term environmental risks.

Underlying Assumptions

1. Voluntary Participation Assumption
Researchers, companies, and traditional industries will join consortium and share data. However, trade secret concerns and free-rider problems exist.

2. Government Autonomy Guarantee Assumption
Government refrains from operational interference after budget input. However, performance demands and supervisory pressure may undermine principles.

3. Traditional Industry Entry Capacity Assumption
Nuruk manufacturers can adapt to biomaterial industry. Technology transfer provided but actual acquisition takes time.

Major Uncertainties

1. Consortium Formalization Risk
Only biannual workshops operated, budget consumed without substantial cooperation. Initial participants form cartels; large corporations seize control.

2. Industry Linkage Failure Possibility
Matching platform built but actual transactions don’t occur. Mismatched needs; return to conventional materials after subsidy ends.

3. Bureaucratic Inertia Persistence
Autonomy principles established but undermined at working level through report formats, KPI settings, and enhanced interim inspections.

Reflection: Ethical Issues Learned This Week

The Asilomar 50th anniversary conference’s conclusion that “Trust is the coin of the realm” emerged from five decades of debate over trust-building mechanisms. The original 1975 Asilomar conference centered on self-disclosure by the scientific community (transparency), institutionalized through the BSL grading system. However, the 2020s lab-origin controversy revealed that expert-only transparency failed to bridge the trust gap with the public. Subsequently, iGEM added third-party verifiability through standardized metrics (BioBricks), while Kevin Esvelt emphasized democratic participation by affected communities for ecological release technologies. The recent NSABB report (2025) recommends a hybrid model integrating all three elements—transparency, independent verification, and stakeholder participation. The mycelium patina project exhibits structural vulnerabilities across all three dimensions. Current eco-marketing claims “biodegradability” without quantitative data on strain-specific degradation rates, energy inputs, or carbon emissions, making consumer verification impossible (transparency deficit). Like PLA concealing industrial composting requirements (58°C, 6 months), some Rhizopus strains require over two years under natural conditions—a fact left unstated. While ISO 14025 EPD exists, Korea lacks biomaterial-specific certification, and the Korea Environmental Industry & Technology Institute possesses only plastic-centered expertise, unable to reflect microbial metabolic characteristics (verification deficit). Traditional nuruk manufacturers provide strains but are excluded from consortium decision-making, while consumers and ecologically-affected local residents have no participation pathways (democratic deliberation deficit). The structural causes of this triple failure are clear. Startups prioritize rapid marketing for initial investment, avoiding LCA costs (30 million won per assessment); the government defers regulation under bio-economy development rhetoric; consumers purchase based solely on “eco-friendly” labels amid information asymmetry. The mRNA vaccine case—where clinical data disclosure drove 20% vaccination rate increases—demonstrates transparency’s power, while Kevin Esvelt’s Gene Drive project achieving acceptance through Maasai prior consent processes proves participation’s importance. Therefore, governance solutions must adopt a hybrid structure. Develop mycelium-specific EPD measuring strain cultivation energy, carbon emissions, and degradation rates under natural/industrial conditions, mandating government-funded firms to upload data to public databases (transparency). Create a Swiss Cheese structure through Ministry of Environment institutional design, Korea Environmental Industry & Technology Institute certification issuance, and university laboratory on-site verification, with 50% R&D matching funds supporting SME costs (independent verification). Allocate 5 of 10 consortium board seats to traditional industry (2), consumer representatives (2), and environmental groups (1), requiring 2/3 approval for strain introduction and production expansion decisions (democratic participation). The key is a circular structure where EPD data undergoes independent agency verification, with results interpreted by the stakeholder committee. Transparency alone cannot bridge expert-public gaps, verification alone ignores context, and participation alone cannot handle technical complexity. This tripartite mutual reinforcement represents the trust-building conditions reached after Asilomar’s 50-year evolution.

H