A New Ideas Machine

Let’s create a $1Bn global crowdfunded innovation prize.

Has our great ideas machine really broken down? Peter Thiel recently quipped that innovation is

“Somewhere between dire straits and dead…we wanted flying cars; instead, we got 140 characters.”

And, he has a point. We are still relying on the out-dated intellectual property system to fuel and reward the creation of new ideas and startups. The lure of the acquisition lottery is leading smart and talented entrepreneurs to invest their time in low impact problems; while, traditional venture capital funds are avoiding the outliers or ‘black swans’, which often lead to revolutionary ideas.

An alternative from the Public Sector…

David Cameron, announced a resurgence of the Longitudinal Prize—300 years after the Longitude Act was implemented in England to ignite the search for a simple way to calculate a ship’s position.

The British public voted to create a £10 million prize fund to help solve the problem of global antibiotic resistance. It is a fantastic and exciting initiative and regardless of the outcome it will no doubt succeed in sparking the public’s curiosity and inspiration in some of humanity’s greatest scientific challenges.

But we are still not thinking big enough…

It might be surprising to hear but £10M is not an awful lot of money when it comes to supporting Research and Development costs and the prize is still focused on British residents only. Whilst the Longitudinal Prize is a step in the right direction the problems facing humanity today need more.

There are of course other prizes out there that are sparking radical innovations. Peter Diamandis’ X-prize foundation has already experienced remarkable success in a wide range of fields and has several more in the pipeline. This is only the beginning. For as Steven Johnson eloquently argues in his recent book Future Perfect, the world needs an ‘X-prize for everything’.

Although innovation prizes have been around for centuries, they have never been used to their full potential.

When an innovation can be specified, prizes are vastly more efficient for incentivising, diffusing and promoting new ideas in comparison to the messy Western intellectual-property system. Put simply, patents grant ownership of an idea consequently restricting both the ideas’ diffusion rate and the ability for others to further innovate upon it. Prizes on the other hand let innovators profit handsomely from their ideas without owning them.

If you add up all of the worldwide philanthropic prizes the total is not much greater than $375 million. This sounds like a big number yet in a global economy typically measured in trillions of dollars, it is barely a drop in the ocean.

Let’s apply Larry Page’s moonshot thinking: imagine a pool 1000x bigger than the current philanthropic innovation prize total available. Here is one radical suggestion for what that might look like: