Last month, the X-Prize Foundation announced the winners of the Wendy Schmidt Oil Cleanup Challenge. The challenge was created to spur the development of more effective oil spill cleanup methods. Specifically, the challenge offered $1.4 million in prizes for the development of removing oil from the ocean’s surface. The aim was to double the industry’s best oil recovery rate in controlled conditions. The winning team, Elastec/American Marine, demonstrated an oil recovery rate more than three times the industry’s previous best and was awarded the top prize of $1 million.
This is another example of how technology inducement prizes can spur the development of valuable technologies, and further evidence that such prizes are far more cost-effective than ex ante R&D grants or government investments in speculative ventures like Solyndra. The latter may be more politically popular, but prizes would be a better use of taxpayer dollars. As I’ve argued at length, if we’re serious about problems like global climate change, we should invest more in prizes and less in conventional approaches to government-sponsored R&D.
(Thanks to Roger Meiners for the pointer.)