Thursday, May 1, 2008

Contests as Sources of Technology Innovation: The X-Prize

I love contests. They serve as brilliant incentive for technology development. Quite often far more money is spent on the technology development, than the prize money that is won in the end.

This is probably most obvious from the X Prize Foundation, where Peter Diamandis decided to take the idea of technical innovation to a whole new level with his prize. His Ansari X-Prize for space travel pushed space technology so far that it suddenly seemed possible for anyone to buy a ticket to space. Example, Virgin Galactica.

Peter Diamandis talks about the origin of the X Prize Foundation.

Peter is pushing the envelope in other fields as well. His recently announced Progressive Automotive X-Prize will reward US$10 million to the first team that produces a car that meets EPA standards and can do about 100 miles per gallon. Of course there are more details than that and you can read about them here. But briefly in their own words:
The Progressive Automotive X PRIZE will place a major focus on affordability, safety, and the environment. It is about developing real, production-capable cars that consumers want to buy, not science projects or concept cars. This progress is needed because today’s oil consumption is unsustainable and because automotive emissions significantly contribute to global warming and climate change.

So you might be wondering why I'm going off on these X-Prizes. Well, I'm highlighting them for two reasons:

A. Efficient technology development is good for the world at large, because of their primary and secondary benefits. For one, it levels the playing field in terms of technology development, i.e. Bangladesh can produce an entry and earn the prize money just as well as the United States. Prizes level the playing field in that it mitigates the risk of investing in technology development...essentially you can possibly make the money back once you win the prize. Some people might argue that prizes give a fake sense of security, but in reality even teams that don't win the prize, spur secondary benefits such as entrepreneurial ventures based on the new technology, economic development, increased environmental quality because of increased efficiency and much more.

B. X-Prizes for poverty alleviation and other social problems. Diamandis is already talking about expanding X-Prizes into the social areas of water purification, poverty alleviation, etc. Imagine the possibilities of innovation and the lives that could be changed as a result.
It would also serve to attract and involve the minds of people who may not have otherwise been engaged. When I think about what could happen if the world would get together to think about social problems, I feel overwhelmed. On one hand the possibilities are extraordinary, on the other, its sad that it should take economic incentives like these to bring people to think about caring about their own fellow human beings.

I'd recommend watching other videos from the X-Prize here.

No comments: