Needed: Prize For Best Use Of Prizes To Spur Innovation

from the everybody-wins dept

Using prizes to spur innovation continues to gain in popularity. Two new contests, one to promote fuel efficiency and another to develop a new lunar lander, are in the works from the X-Prize Foundation, which previously had sponsored a contest for private space travel. The model is intriguing because it promotes competition, while spreading the R&D costs among several different organizations, each with a lot at stake. However, the use of prizes is not without its detractors. Some point out that there’s already a prize called profit for people who develop technology. That’s sometimes true, but there’s often a disconnect between the ability to innovate and the ability to execute and turn a profit; perhaps if these inventors can be rewarded with monetary prizes, there will be no need for the patent-and-sue strategy. A deeper problem may be the fact that technology often develops in completely unexpected ways, creating its own demand. Economists know this as Say’s Law. The most impressive innovations probably won’t come from the heads of contest organizers, but from researchers pursuing their own interests. Still, as long as there’s going to be research driven by the public interest (sponsored by governments and other non-profit interests), having researchers compete is a promising model.

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Comments on “Needed: Prize For Best Use Of Prizes To Spur Innovation”

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Adam Brown (user link) says:

Overlooking one other thing

I think that a lot of what makes these competitions work is that there is a winner. Competitive behavior drives man to create many things and taste of victory is just as important as the financial reward. These competitions also have the benefit of great public relations. Sure, a company could come up with something amazing on their own but if they do it for a competition and win they get lots of extra press for it.

dorpus says:

Should winners be killed?

Will the internet spawn innovative serial killers who target very specific kinds of people? I imagine bird watchers would be easy to off in the woods, kite flyers could

be decapitated with kite lines, scrabble players could be asphyxiated with scrabble pieces, bridge players could be lying dead in the cardinal directions, stamp collectors could have their faces glued on to albums, fishermen could be gutted, paintballers could be shot with real guns, yachters could have their skin flapping in the wind, chess players could be blown up with time-bomb chess clocks, Techdirt readers… er, we won’t go there. ;P

Joe (user link) says:

Re: Paying for Prizes


We’re in agreement that the government funds all kinds of wasteful projects (some are research, some are just pure pork). But as long as the government is going to be involved in directing research at all (the wisdom of which can be debated), it seems like a good thing that it’s moving more towards the prize model, as opposed to the grants model.

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