Experiments produce many failures but also the odd revolution.
Often, a solution to a complex problem is achieved by experimenting, and testing out many different design variations.
In the 1920s, no one realized the military potential of fighter planes – even the British, who didn’t believe that bombers could be stopped by them.
A decade later, however, the British Air Ministry requested designs for a new fighter aircraft. At first, none of the companies competing for the contract impressed them. But one of the firms returned with a new aircraft: the Spitfire.
Despite many doubts, including those of Winston Churchill, the plane was eventually commissioned as an “interesting experiment.”
Ultimately, the Spitfire was an incredible success: it was capable of diving at nearly twice the speed of existing planes, and was agile enough to fight off the Luftwaffe, stopping the Nazi invasion.
So, how do we encourage more innovation like this? There are two effective ways to accomplish that goal.
The first is patenting. Patents stimulate innovation by giving inventors a monopoly on the use of their idea, so they have a chance to profit personally.
The second approach is even more effective: to award specific, goal-oriented prizes to researchers, which encourage the boffins to compete with one another. These prizes are awarded to people or teams that accomplish a particular goal. Both the prize money and the competitors are often funded by philanthropists who want to expand their possibilities for profit in a new market.
In 2004, for example, the Ansari X Prize awarded $10 million to the first team to fly a private airplane into space. There were 12 competitors, one funded by a town’s coffee shop.
The winner was the “White Knight,” an airplane that was funded by Microsoft co-founder Paul Allen. Although it was a strange-looking contraption, it was able to reach the brink of space.
As this example suggests, important breakthroughs, such as private spaceflight, are likely to be accomplished in a much shorter time with research prizes than with patents.