Want results? Offer a prize

MP Pierre Poilievre on cash awards and innovation

by Pierre Poilievre

It is easy to turn public money into research. But the question should be, “How do we turn research into results?” Who better to ask than Facebook founder, Mark Zuckerberg, and Google co-founder, Sergey Brin? They invented and popularized technologies that serve billions of people and have created mind-boggling wealth.

Last month, Zuckerberg and Brin inaugurated the “Breakthrough Prize in Life Sciences” with the purpose of recognizing “excellence in research aimed at curing intractable diseases and extending human life.” Rather than simply pumping all the money into research institutions, Zuckerberg and Brin are paying for results.

History proves they are onto something.

Napoleon Bonaparte offered a cash prize for new ways of preserving food, knowing that his “army marched on its stomach”. So Nicolas Francois Appert invented canned foods, and used the reward of 12,000 francs to open a commercial cannery, which operated for over a century.

Between 1839 and 1939, the Royal Agricultural Society of England offered cash prizes at annual competitions. A Harvard Business School and Norwegian School of Economics joint study showed “large effects of the prizes on competitive entry” and “an impact of the prizes on the quality of contemporaneous patents”. The contests led to new milking machines, cream separators, cultivators, light portable motors and more than 15,000 other innovations that made food more plentiful and farming less burdensome.

In 1874, the Scientific American even said that the Royal Agricultural Society prizes catalyzed a “most extraordinary improvement in the engines, as regards economy and workmanship, and there is little doubt that the effect of these tests has been most beneficial to the users of steam power.” That is important because, as the report notes, steam power likely did more to boost output than any other invention of the latter part of the 19th century.

Almost a fifth of the inventions that competed became patented. Even the losing contestants won. Hundreds of them patented their inventions to profit from them.

From the soil to the sky: the “Lone Eagle”, Charles Lindbergh, won the $25,000 Orteig prize to become the first man to pilot a non-stop flight from New York to Paris, and the first to cross the Atlantic solo. According to the X Prize Foundation, “a quarter of all Americans personally saw Lindbergh and [his plane] Spirit of St. Louis within a year of his flight – and the world changed with their excitement”. The Foundation notes that in the year of his legendary flight, the number of licensed aircraft jumped 400 per cent and applications for pilot licenses rose 300 per cent. From 1926 to 1929, the number of airline passengers went from 5,782 to 173,405 – a 30-fold hike in just three years.

Based on this success, the Foundation is leading a revival of prize money for innovation. First, they offered $10 million for launching a private-sector aircraft carrying three people to outer space twice in two weeks. Twenty-six teams from a half-dozen countries competed and invested a total of $100 million on development. There was an astounding $10 in R&D chasing each dollar in prize money—talk about leverage.

The contest not only led to the invention of a new aircraft, but a new industry — private sector space travel. Virgin Galactic has purchased technology from the winning team for that very purpose.

The Foundation then offered a contest for fuel-efficient vehicles. A Swiss company won $2.5 million with a vehicle that could go zero-to-60 miles per hour in 6.6 seconds, while running on an amazing 200 miles-per-gallon equivalent. In other words, it accelerates almost as fast as a 2010 BMW 328i, with seven times the fuel efficiency of a 2010 Honda Civic.

The X Prizes have since expanded to robotic moon landings, genomics, environmental cleanup, education and global development.

The private sector is sponsoring prizes for more than philanthropy. A few years back, Netflix crowdsourced its R&D with a $1 million prize for a new system of algorithms to recommend films. According to The Economist, 55,000 people competed and the winning team was a group of seven who had worked together via the internet and met in person for the first time when they retrieved their prize.

Governments are catching on to the power of prizes. Under the America Competes Act, 45 U.S. government agencies have offered over 200 prizes to incentivize problem solving. The President’s Office of Science and Technology Policy says prizes are now a “standard tool in every Federal agency’s toolbox”. And this January, the New York City Schools Chancellor announced a $104,000 prize for the best app, video game or other technology to help teenagers conquer math.

Here in Canada, the House of Commons Transport Committee unanimously made the cost-neutral recommendation for government to “redirect a portion of its existing research and innovation budget away from institutions and towards substantial prize money for innovations which meet well-defined public goals.”

With private sector promotional sponsors picking up the tab, governments could hold massive science fairs to unveil the winners. The prestige and publicity would create further incentive to compete and win. As the Lindbergh flight and the Royal Agricultural Society prizes prove, the prestige and publicity of competitions can motivate the innovators of today and inspire those of tomorrow.

Let’s keep our eyes on that prize and make Canada an innovation nation.


Want results? Offer a prize

  1. Mr. Pollievre doesn’t realize that this model only works when two important factors come into play – when the cost of research itself is not generally a barrier to entry, and when the reward of the invention itself would not reap such a benefit that the prize is relevant. The type of project this kind of thing would work for is narrow indeed – stuff that takes little investment to get involved in and doesn’t yield immiedately valuable results.

  2. Prizes are already being outdone by best-selling books claiming all sorts of nonsense. Much more money that way.

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