I’ve got a story, headlined The Best Ideas Money Can Buy, in the summer issue of Conservation Magazine, an excellent little magazine published by the University of Washington. It’s about prizes, and they power to drive environmental innovation. As you’ve probably noticed, governments, nonprofits and companies have all experimented with the idea of using prizes to solve big and small environmental problems.
Kathryn Kohm, who edits the magazine, asked me to look into the effectiveness of crowd-sourcing sustainability solutions. I talked to Peter Diamandis of the X-Prize Foundation, Mark Vachon of GE, Beth Trask of the Environmental Defense Fund and others, including Karim Lakhani, a faculty member at Harvard Business School who studies open innovation.
Here’s how the story begins:
The ceremony had all the pomp of the Oscars, minus the gowns. Musical fanfares greeted each presenter. Politicians delivered windy speeches. A global audience watched live (and a prime-time special followed on The Discovery Channel) as the winners of the Progressive Automotive X Prize were announced on September 16, 2010, in Washington, D.C.
The $5 million grand prize went to a startup company called Edison2, whose founder, Oliver Kuttner, had assembled a team of professional motor-racing engineers to rethink the fundamentals of the automobile. Their winning entry, aptly named The Very Light Car, weighs just 830 pounds, travels 100.3 miles on a gallon of gas, and represents a radical departure from any other car on the road today. “That’s what this competition is all about: advancing the science behind automotive technology to create revolutionary change,” declared Glenn Renwick, chief executive of Progressive Insurance, which put up $10 million in total prize money. Peter Diamandis, founder and chief executive of the X Prize Foundation, was characteristically effusive. “We’re living in a day and time where literally anything is possible,” he declared, “where a man or woman who is passionate and driven can go out and build a spaceship or a 100-mile-per-gallon car. This is only the beginning.”
But the beginning of what? Don’t expect to see the Edison2 on the roads anytime soon, if ever; so far, no auto-maker has stepped forward to license the design. When it comes to prizes, though, we’re well past the beginning. Thanks in part to the influence of Diamandis and the X Prize, nonprofits, governments, and corporations are turning to prizes to spur innovation—particularly environmental innovation.
It’s not hard to see why. Unlike conventional research and development, prizes pay for performance, not just the effort. They call attention to important issues. And they open up problems to anyone with a good idea (or a bad one), getting beyond insiders or accredited professionals. “There are so many more ideas and possible solutions out there in the world than any given company or organization can tap into,” says Beth Trask, who oversees prizes for the nonprofit Environmental Defense Fund. Some people call this Joy’s Law—after Bill Joy, a founder of Sun Microsystems and a venture capitalist who once said: “No matter who you are, most of the smartest people work for someone else.”
Often, though, it takes insiders as well as outsiders to solve big problems, as Edison2’s travails suggest. Prizes can clearly drive technological innovation, but big environmental problems such as climate change and biodiversity loss are shaped by politics, economics, and culture as well as by science and engineering. And that raises a question: Once the buzz dies down, can prizes generate solutions that scale up to deliver lasting environmental change? Put another way, do they pay off for the world as well as for the winners?
You find the answers to those questions here.