Seeker Blog

Don’t miss this essay by Tom Vander Ark of the X Prize Foundation. Excerpts:

Prize philanthropy is a powerful strategy for producing innovation and public benefit. Well constructed prizes break bottlenecks, change perceptions, and accelerate adoption of beneficial innovations.

There are three primary benefits of well constructed prizes and media savvy global competitions; they are a high leverage and efficient investment, a powerful innovation strategy, and an effective change strategy.

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When Are Prizes Useful?

Prizes are particularly effective when a market is stuck-blocked, inefficient, or underdeveloped. Mature and efficient capital markets produce and spread innovations. Where this is not occurring prizes can attract new money, minds, and methods to a seemingly intractable problem or an underappreciated opportunity.

Prizes are most useful when the path to solution path isn’t clear. When the solution path is relatively clear, direct research and development expenditure is warranted. When it’s not clear what technology will produce a desired capability, a prize creates incentive for a variety of approaches.

Prizes appear to be most effective when the timeframe to accomplish the goal is between three and eight years. If less, the goal is probably too easy and short of a radical breakthrough. If longer, it becomes difficult to mobilize and sustain awareness and resources.

While most prizes have historically focused on technology innovation, we believe that prizes can also be used to improve health, education, environmental outcomes where consumer behavior and public systems define results. This hypothesis is based on the awareness created by prizes, the emerging importance of social networking, the success of cause marketing, and the power of interest group lobbying-large groups of focused and energized people utilizing new technologies can make a big difference fast.

Prizes educate and excite the general public. In addition to producing breakthroughs and speaking adoption, prizes inspire student interest in science and engineering. Each prize provides educational outreach opportunities (e.g., student robotics competitions building lunar rovers). Prizes inspire and educate, they promote competition. Prize will prove to be fundamental to the innovation economy.

Well-designed prizes work.

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