Technological Innovation and Prize Incentives

Technological Innovation and Prize Incentives

The Google Lunar X Prize and Other Aerospace Competitions

Luciano Kay

In this in-depth study, Luciano Kay focuses on three recent cases of prize competitions in the aerospace industry: the Google Lunar X Prize, the Ansari X Prize and the Northrop Grumman Lunar Lander Challenge. Using a combination of real-time and historical analysis based on personal interviews, workplace visits and questionnaire and document data analysis, the author examines the particular dynamics of the prize phenomenon and offers a comprehensive discussion of the potential of prizes to induce innovation. This fascinating volume also sets out a systematic method to studying prize incentives, offering a concrete innovation model and case study design approach that will prove highly useful to further research efforts in the field.

Chapter 7: Discussion

Luciano Kay

Subjects: innovation and technology, innovation policy, technology and ict, politics and public policy, public policy

Extract

To probe the ability of prizes to target and attract certain groups of interest by offering a particular set of incentives, this investigation put forward a hypothetical explanation of the decisions to participate in prizes based on distinct perceptions entrants have according to their experience with the prize technologies (H1). That is how, hypothetically, outsiders perceive opportunities to participate in projects they would not have access to and industry players come across a chance to exploit skills and technologies they are already familiar with. While there is no evidence to completely discard this explanation, the decisions to enter prize competitions and the ability of prizes to attract entrants are more complex phenomena. A key element in a stronger explanation of the incentive effect of prizes is their ability to capture the attention of a wide range of individuals and organizations with diverse goals and distinct perceptions regarding the opportunities offered by each competition. The most interesting of this is that those goals and perceptions are not necessarily associated in a direct manner with monetary values or the achievement of the prize challenge. The evidence that supports this explanation shows that, controlling for possible alternative strategies to achieve the prize challenge, there are entrants that make efforts that do not get them closer to the finish line or divert their attention from the prize ultimate goal. In the GLXP this can be observed for example in the indifference of some entrants concerning the strategies and advantage of other teams, projects that do not contemplate Moon landing or R & D activities to develop technologies with capabilities that exceed or do not exactly target the prize requirements. Furthermore, the entrants that fall into these exemplar situations can easily outnumber other entrants that are mainly guided by their desire to win the competition and therefore focus on the fastest possible achievement of the prize challenge.

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