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Prizes Making Comeback to Spur Innovation

March 05, 2007

A gala held last weekend at Google headquarters in California officially kicked off a $50 million fundraising campaign for the X Prize Foundation, which provides funds for the development of new prizes. The prizes are designed to support breakthroughs for specific challenges in medicine, energy production and consumption, education, and transportation.

Big-money, high-profile awards have been used to encourage innovation for centuries, but a new array of these prizes is rapidly advancing entrepreneurship opportunities and philanthropic causes.

Some of the awards announced in the past six months include:

  • $25 million, sponsored by the Virgin Group’s Richard Branson, to remove one billion tons of carbon dioxide from the atmosphere every year for a decade;
  • $10 million, from the X Prize Foundation, to create technology that can map 100 human genomes in 10 days; and,
  • $1 million, from the movie rental company Netflix, to produce an algorithm that can predict customer preferences 10 percent better than current methods.

Some contend this recent spurt in awards is the result of the successful Anasari X Prize, which awarded $10 million in 2004 to the team that could build a vehicle and fly it to space twice in a two-week period. The winning entry cost aircraftmaker Burt Rutan $26 million to design and build. Rutan has since formed a firm named the Spaceship Company to manufacture additional vehicles. The 26 teams that entered the original competition are estimated to have spent a combined $100 million on R&D to win the $10 million prize.

The recent spate of announcements indicates that high-profile prizes through open competition may become a more common vehicle for advancing scientific progress. The website for the X Prize Foundation is www.xprize.org.