Beating the Global Odds: Successful Decision-making in a Confused and Troubled World

Offer a Prize

Speaking of laboratories of innovation, here is another old idea that is now coming back into fashion: the incentive prize. Long before the rise of the modern philanthropic grant-making foundation, whose form was established by the Rockefeller and Ford families in the early twentieth century, prizes were more common than grants as methods for trying to spur innovation and solve specific problems. Most famously, in 1714 the British Parliament dangled a big-ticket cash prize for anyone who could figure out a simple and practical way for ships to determine their exact longitude—an important issue for the world’s leading sea-power of the day. It took several decades, but the problem was solved, and the prize purse was dis­tributed. In a similar way, Napoleon Bonaparte, understanding that armies march on their stomachs, offered a cash prize to anyone who developed a reliable method for preserving food. In response, after several years of experimentation, a French cook and inventor discovered how to can food safely (and got the prize money). In the 1920s, New York hotelier Raymond Orteig offered a cash prize for the first person to fly nonstop from New York to Paris (or vice versa). Charles Lindbergh, in his now-famous plane The Spirit of St. Louis, won the Orteig Prize in 1927 for a more than 33-hour solo transatlantic flight. Lindbergh won a cash prize of $25,000 (the equivalent of some $350,000 in today’s money) and a lifetime of fame (and fame-related problems).

Today, ...