Do Prizes For Technology Development Really Spur Innovation?

It was announced on Wednesday that 11 scientists had received $3 million awards for their health research through the Breakthrough Prize. Funded by Silicon Valley darlings Mark Zuckerberg, Sergei Brin, and Yuri Milner, the Breakthrough Prize in Life Sciences was established to spur innovation in health and life sciences research.

There are a growing number of prizes for innovations in technology and science, funded by both government and philanthropic/private enterprises. Corporations are also funding internal prizes. All are designed to spur innovation and create the "next big thing" or great breakthrough that will change business, life, or both. Unlike the Nobel Prizes which are awarded for significant accomplishment in particular fields of study, inducement prize contests award cash prizes for the accomplishment of a particular, usually narrowly defined, feat.

Such prizes are not new. Charles Lindbergh flew the Atlantic solo in pursuit of the Orteig Prize. A similar prize in 1714 spurred the invention of a nautical clock that was both rugged and accurate enough to allow for precise measurement of longitude. This prize enabled seafarers to navigate with great accuracy well before the days of GPS.

While these prizes do spur a rash of innovation and technological risk taking, there are still questions about how the benefits of the competition spread and are further developed after the prize award. Is there continued development and research once the prize money is doled out to the winner?

These prizes inspire a host of competitors, many of whom have truly unique and viable ideas. But since there is usually only one winner, what happens to the rest of competitive field? How many of them remain funded and able to continue development on what may still be promising, though not competition-winning, technologies? In some cases, even the winners themselves fail to achieve breakout success beyond the competition.

A case in point is the Ansari X-Prize for Sub-Orbital Spaceflight. In 2004 Scaled Composites beat out several other teams to be the first to send a spaceship 62 miles up to the very edge of space, twice within a two day period. Though Scaled’s success was thrilling and garnered a tremendous amount of attention, out of a total of 26 teams who competed for the prize, only a handful are still developing spaceflight hardware. The X-Prize foundation has gone on to sponsor many more competitions, including contests to design a Star Trek-esque Tricorder, on oil spill cleanup contest, and vehicle fuel efficiency contests. Though prize money has been awarded in each of these contests, with the exception of the currently running Tricorder prize, the technologies that were developed have yet to benefit the broader population.

History shows that such prizes take time to bear fruit. Commercial aviation, which the Orteig Prize was intended to spur, required several more decades and many, many millions of dollars of investment before it became commonplace. Sub-orbital spaceflight is similarly taking much time and money to develop. The technologies developed in the X-Prize fuel efficiency challenge may make their way into mainstream automobiles one day, but it is doubtful that the competing teams, most of whom did not come from car manufacturers, will directly contribute to the mainstream future of fuel efficiency.

If anything, these prizes show that innovation and technological advancement do not happen in the spur of the moment. They are processes that require time, talent, resources, and stamina. While these prizes are exciting and produce great results, there should be some effort towards sustaining the development of both the winning technology and the losers' work so that the broad mass of humanity may benefit from the work of these breakthroughs.

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Nate Abrams

I'm a systems guy, which means that I look at almost everything in terms of interconnections, feedback loops, architecture and scale. In other words, I look for the big picture and the deeply buried reasons for why things are the way they are.

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