How Prizes Drive Innovation
From ancient Olympic races to today’s Air Force Prize, prestigious competitions have the power to spur human effort and catapult accomplishment beyond the realm of the ordinary.
Modern humans are wired for competition. We’re fascinated by American Idol, the Nobel Peace Prize, and top 10 lists. We live in a world that celebrates winners. But such competitions drive more than music charts and humanitarian causes, there’s a long tradition of prize-generated innovation.
Innovation prizes flourished in the 1700’s with competitions created for measuring longitude at sea, the development of artificial alkali, and innovations in food preservation to help feed Napoleon’s army. In more recent times, prizes have resulted in the development of commercial space flight technology, autonomous robotic cars, and mobile money services.
Today, there are a number of high-profile prizes offered for technological innovations. But why do prizes work? And how do they attract teams that appear to have a slim likelihood of success?
Opening the field
Prizes open up the field of innovation to anyone willing to put in the effort. Hiring a single innovator to tackle such thorny issues would favor conventional expertise over risk-taking and experimentation. Often, breakthroughs come from those who are able to think outside of convention and find new ways to approach the problem. Open competitions attract a broader range of potential solutions and approaches without exposing the organizer to risk. This structure means that the best practices will rise to the surface.
Clear criteria for success
It’s difficult to gun for an innovation without having a clear picture of what you’re shooting for. Prizes have explicit criteria for what constitutes a win. Because the goal is extremely clear, researchers and engineers are able to focus their energies into aspects of the project that will make the biggest difference to their success and impact on the world.
The psychology of competition
Prizes are positive, aspirational, and inspirational. They tap into the human desire to make something great and to push farther than the opposition. Because innovation prizes are often ongoing for years, the involved teams build up a community around the technology. They talk and hint and compare. Knowing that one group or individual has been able to push a capability proves to the others that it can be done, implicitly daring them to take it even further.
Prizes brought us the first non-stop flight from New York to Paris and the first private manned spacecraft. With commercial industries practically lining up to invest in competition-created innovation, there’s no telling what remarkable developments competitions will bring us next.
Got you hooked? Here’s more:
The Power of The Prize
Fast Company asks should prizes be used for everything?
Why Napoleon Offered A Prize For Inventing Canned Food
Planet Money on four eye-catching historical prizes
Patents Vs. Prizes (PDF)
An economics study of the incentives of basic research