- Elgar original reference
Edited by Rolf Wüstenhagen and Robert Wuebker
Chapter 18: Incentive Prizes to Stimulate Energy Innovation and Entrepreneurship
Neil Peretz and Zoltan Acs 1 RESURGENT INTEREST IN PRIZES: THE X PRIZE AND THE NEW PHILANTHROPISTS There is a ‘renaissance of prize giving in our own era’ (Scotchmer, 2004). Much of this stems from the publicity surrounding the success of the $10 million first X Prize. Aerospace designer Burt Rutan and billionaire Paul Allen won the prize for building and launching a spacecraft capable of carrying three people to an altitude of 100 kilometers twice within two weeks (X Prize Foundation, n.d.). From the perspective of the organizers, the X Prize focused on goals that were simultaneously ‘audacious and achievable’, with a time horizon limited to three to five years in order to hold the attention of sponsors (Powers, 2008). The X Prize was a ‘highly leveraged’ contest (ibid.), featuring 26 teams from around the world, who collectively spent more than $100 million (X Prize Foundation, n.d.). In the process, tremendous publicity was achieved, yielding over 5 billion media impressions (Schroeder, 2004 at 3; Powers, 2008). The X Prize’s ‘leverage’ stems from the contestants’ aggregate expenditures exceeding the prize purse, and the contingency condition that requires the prize donor to only pay if someone achieves the prize goals (Kalil, 2006). Dr Peter Diamandis, co-founder of the X Prize, describes the prize as ‘an exothermic economic reaction – something that gave off more than it consumed’ (Hoffman, 2007). Inspiration for the X Prize traces back to the Orteig Prize, which was won by Charles Lindbergh for completing the first non-stop flight...
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