The Next X-Prize?

An open question -

Needless to say, the Ansari X-Prize was a success in achieving its goal of jumpstarting the private space tourism industry. It was a demonstration of power of private ingenuity and ambition. And it made Burt Rutan a household name.

Offering a monetary prize funded entirely by private donations to stimulate innovation seems like a good recipe to 'jumpstart' other industries. It is an example of private solution to the public goods problem of not being to capture much in the way of first mover benefits. The question is as follows -

What other endeavors could benefit from a privately funded Prize race?

I will give my own answer. It has long been my belief that there is no way that it should cost $5,000 a year to educate a student. Nor are giant buildings (schools) the size of factories necessary to provide education. Nor should long established knowledge like reading, writing, and arithmetic cost so much bound up in hardcover to be replaced every two years. And how much do you really need to memorize when the world is at your fingertips? Nor should students take such a passive role in their own educations. It is the factory model of one-size-fits-all education that contributes to a stifling learning environment, the erosion of the natural joy from education, and widespread economic ignorance.

Thus, the goal of my Prize would be to create an effective sub $500 per year educational environment. The participants would be encouraged to use internet technology to minimize costs, be innovative in designing the infrastructure, and allow the student an individualized, active education. Of course, the word "effective" needs to be defined. It's much easier to say that the spaceship has to climb to 100 km and return safely twice in two weeks than it is to agree on standards in education; hence the reason that standards should be determined by free choices. Perhaps the Prize funders could agree to a set of standards for students based on broadly defined goals that allowed an open-ended pursuit of educational goals rather than exact benchmarks.

So, to repeat - what other endeavors could benefit from a privately funded Prize race? Why? What specific objectives would have to be met to win the Prize?

If any bloggers choose to answer on their own blogs, I will link to them in a separate post later in the week. Please email me ( if you do.

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Send them to India! Most of

Send them to India! Most of the best private schools here charge less than $500 per year (approximately Rs. 24,000 at Rs. 48 to the $).

There is a similar prize in

There is a similar prize in the field of anti-aging research: The Methuselah Mouse Prize. It is given for breaking the record for lifespan of a standard mouse species. One interesting tweak is that the proportion of the prize pool which is given out depends on how much the previous record is broken by, so there is incentive to exceed the goal, not merely meet it.

I disagree. There are plenty

I disagree. There are plenty of private schools in this country, and they all have ample incentive to reduce costs as much as possible. Prizes like the X-Prize are better suited to projects that would result in important fundamental shifts in the state of technology, but that might not be immediately profitable for the innovator. My suggestion (which is admittedly not very creative) is to create a prize for putting a privately-developed vehicle into orbit. I've also heard about possible prizes for a space elevator or for intermediate steps (like a prize for the first person to develop carbon nanotubes of a particular length).

You mention that the value of a prize system is that it is a "private solution to the public goods problem of not being to capture much in the way of first mover benefits" but you don't really explain why the innovator in your school example would be unable to capture the first mover benefits.

FuturePundit has some nice

FuturePundit has some nice background on prizes:

The most interesting thing is that the X-Prize was underwritten by an insurance company. The backers actually only put up a million or two, and the insurance company basically bet against the prize being won anytime soon. Having been burned in this field, that is unlikely to work again for aerospace, but it might work for some other prize.

Question for claritiy's sake

Question for claritiy's sake - are you proposing this in an effort to draw the private sector into areas dominated by the government, or are you trying to drive technological innovation? If you are trying to draw the private sector in, I'd say a bounty should go to the first person who can devise a way to deliver mail better than the USPS. If you are trying to drive innovation, then the things you could place a prize on would be almost limitless, wouldn't it?

Xavier, You make an


You make an excellent point. Making a cheaper school doesn't really benefit from a prize structure like purely technological innovations.

However, I am under the impression that the lack of innovation in private schools is because they are not really "private", i.e., they have to meet many of the same govt standards as public schools. Thus, functionally they are basically like public schools - factory model, passive learning, costly textbooks, tests that don't measure anything of value, social structure enabling alpha males, peer pressure to 'keep it real' (stay stupid), etc. I would hope that the prize structure would create a truly radical change in the way education is provided and create a 'paradigm shift' in the minds of the public of how education should be approached.

Chris, I'm not sure what the


I'm not sure what the goal would be, or if there would be a single goal. While undoubtedly technological innovation was one goal of the X-Prize, other benefits were-

- raising public awareness that a whole space industry exists outside NASA, and that these guys do what they do well
- getting venture capitalists to take space entrepreneurs more seriously

I have little doubt that if the USPS was allowed to have competition, it would soon be out of business.


In response to Chris, two

In response to Chris, two points:

Driving technological innovation and replacing elements of the public sector with the private sector are essentially the same thing in many cases, especially with regards to "pure" research.

Second, as far as I know, the reason why UPS and FedEx don't deliver mail is that they are prohibited by law from doing so. They can only only deliver certain kinds of packages.

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