Prizes are incentives that have long been used by public or private sponsors to elicit effort of individu als and organizations. For instance, in the 18th cen tury, prizes were used to encourage basic research by compensating research results with monetary rewards or medals. Prizes also helped in the initial development of the aviation industry in the early 20th century.

Why?  Because prizes are effective.  Under the right circumstances, they can be more effective than traditional investments in research and development. Lowery says: “After falling out of favor for decades, such high-publicity, fat-reward contest came into vogue again in the aughts in the wake of the 1996 Ansari X Prize for advances in commercial spaceflight” which Burt Rutan’s SpaceShipOne won in 2004.