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Thursday, December 05, 2013

How To Choose Which Technology Prizes To Fund - Ask The Customers

        For an excessively long time I have been promoting X-Prizes as the most effective way of encouraging technological progress (by ensuring the rewards to innovation are likely to be closer to proportionally as good as from the other factors of production.

        At one stage, purely as a way of saving tax money, I suggested, as part of my 24 point programme for world class growth, that providing a greater tax allowance than normal charitable donations get could do that.

18 - Beyond an official technology prizes foundation (#12) mainly orientated on space technology, the government should give extensive tax relief for any privately funded technology prizes. Prizes mean that though government can choose to have winners, simply by putting up enough prizes, they don't have to try to pick the winners in advance as grant funding does. Private prizes have the additional benefit that people thinking outside the traditional government "box" can come up with ideas & promote them. This is less important for space development where the technological challenges are mainly engineering & the problems well understood. By comparison pure science prizes, like the M-Prize whose importance to aging research cannot easily be underestimated, has achieved repeated successes with funding which government would consider insufficient to carry as pocket change.

19 - Adopt as an aim that 2% of our GNP should be available for these private & public X-Prizes. Most of this could come from a reduction in grants, it would certainly lead to a far more than 2% increase in GNP (probably much more than a 2% increase in the annual rate of GNP growth) & would do far more for British status worldwide & long term security than the 3% of GNP spent on the military. The evidence is that prizes are 30-100 times as cost effective as the normal government grants & advance payments. If they don't produce results obviously no prize is awarded so that is infinitely more cost effective :-)

        At the time I saw this as a second best option because ordinary multi-millionaires, putting up prizes might insist on their prizes being for technological achievements different from the space ones I wished for (& expected government to obediently support).

       In this exchange on comments Mike Haseler's Scottish Sceptic site he made this point which has made me reverse my opinion. Getting the ideas for X-Prizes from one central source, even such wise ones as myself or the government, is not as good as drawing them from a widespread mass of potential customers as prizes funded by individuals would be.

     Scottish Sceptic says:    

I remember when I first entered industry. Timex in Dundee had this massive manufacturing plant, but they saw the real money went to the equipment designers. So when I started I was put into their answer: an R&D department which was created to “think up good ideas” for products.

At the time, being a wet behind the ears physics/electronics graduate that seemed a very sensible idea. But very soon I began to realise that all we were doing was “inventing” products which the nerdy people in R&D thought we wanted … or worse stereotypical ideas of what other people wanted.

I even introduced the revolutionary idea of … asking shop workers what they thought about our products designed for them … and the reply was not very complementary … but by then it was too late to change much.

From this experience I learnt that successful companies need real customers … they need demanding customers who are willing and able to communicate with the design staff – because only that way does the company produce goods which will sell.

What has happened in UK science, is that the necessary customer in industry has been eliminated, and now we have nerds in academia trying to second guess what commerce and industry would want if there was any to take up and use their research.

And instead, now the politicians have become the customer … and so research is more and more pushing political viewpoints and has less and less economic benefit.

neilfutureboy says:    

That post encourages my ever unflagging enthusiasm for X-Prizes. Specifically that prizes, if suggested by potential customers (which includes us all) would be not only a financial driver of innovation but would drive it in a useful direction.

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