CIAO DATE: 12/03

National Woes? Print Mail Dangle Prizes, Solutions Will Follow

Newt Gingrich

On The Issues

February 2002

American Enterprise Institute for Public Policy Research

The U.S. government should offer cash prizes to innovators who find solutions to specific scientific questions of national interest.

Many Americans know that Charles A. Lindbergh was the first aviator to fly the Atlantic alone. But how many know that his 1927 flight was prompted by a $25,000 prize offered by a wealthy New York hotelier as a way to advance aviation?

For much of this country's history, prizes motivated sharp minds to innovate quickly while avoiding the dual demons of massive paperwork and entangling bureaucracies. Today, when the country needs breakthrough solutions in a wide range of pressing issues—among them, health care, the environment, security, and space—prizes could serve the U.S. government well.

If President Bush were to offer prizes for important contributions to the public good, the first beneficiaries would be the successful innovators. But we all would be the bigger ultimate winners, as history shows.

 

Past Breakthroughs

In the early eighteenth century, for instance, a navigational error caused the British navy to lose four warships and 2,000 sailors. In response, the British parliament offered 20,000 pounds (more than a million U.S. dollars today) to anyone who invented a way to determine longitude at sea with accuracy. The answer didn't come from scientific or academic elites, but from a determined working-class joiner with little formal education, John Harrison, who invented the chronometer.

In another instance, utility companies in 1992 formed the Super Efficient Refrigerator Program, which offered $30 million in prize money for the manufacture and successful marketing of a high-efficiency refrigerator. Whirlpool won the contest, but in the long run, consumers won, too.

The federal government should embrace the idea of prizes for technological and scientific advances that help it achieve its policy goals because:

• It often lacks innovative solutions to problems to meet its needs that have no natural market in the private sector. This has always been true, for instance, in meeting our defense objectives; there is no private-sector need for combat aircraft or heavy weapons. Even more urgently needed today are technologies to frustrate the efforts of terrorists and to avoid the devastating results of biological, chemical, or nuclear attack.
• Offering prizes expands the number of minds that will be working on a specific problem at the same time, thereby likely shortening the time before breakthroughs occur.
• Prizes reward those who give up their own time and resources to meet the challenge of a national scientific or technological need. That should be a point of pride for all Americans, who could stop cheering for television contestants and start rooting for amateur and professional scientists and researchers as they race toward a cure for AIDS or Alzheimer's disease or profitable space travel.

 

Where to Start?

Nanotechnology—which deals with atom-sized materials and components—is a good candidate for such a contest because it will change virtually everything. Nanotechnology will change manufacturing by creating lighter and stronger materials, supercomputing by using quantum behaviors, and health care with methods that can detect a single cancerous cell.

There are plenty of other contest options. We're probably going to spend $25 billion—perhaps even more—to try to develop the space station in the usual bureaucratic way. Why not offer a prize of $1 billion to the innovator of a working system that would get people and equipment into orbit for 10 percent of the current cost? That could dramatically lower the cost of all future space flight.

I am not suggesting that we slow the momentum of any current scientific activities. I am suggesting that relatively modest amounts set aside for prizes might lead to dramatic breakthroughs made by a wide range of inventors and developers, many of whom would never make it through the current red-tape-ridden system.

Surely it is worth at least trying this bold approach. After all, if no one produces the breakthrough, no one gets the money.

 

Newt Gingrich is a senior fellow at AEI.